Stages |
Basics |
Clueless Trader |
Rookie Trader |
Developmental |
Determined |
Consistent Trader |
Fundamental |
Trading is a professional business, with no beginner’s league.
Money goes quick.
|
You heard that some traders make millions and you want to be one of them. |
You find hundreds of successful traders and books, sharing their knowledge at ease. |
You start to realize the immense learning curve and knowledge needed to trade.
|
You start to specialize, recognizing that nobody trades the entire market. |
You are in the market every day. You understand key price levels and trading times.
|
Technical |
You need to understand trade probabilities, reward/risk scenarios, to put the odds in your favor. |
Trading is like a high tech video game and you feel strong, you will master it quick. |
You endeavor every trading method and technical indicator you come across. |
You visualize various outcomes of a trade and you agree with yourself the resulting actions. |
A trading system is in place: Defined entries and exits. You estimate probabilities, reward/ risk. |
Your charts are telling you what to do. Relying on outside opinions is no more an option. |
Mental |
Define what to trade, when to trade and how to trade. Repeat it over and over and over, like a sports pro. |
Optimistic: You rely in one method and you apply it until it no more works. |
You are gaining trading experience by trial and error without building a trading plan. |
Ambiguity: Either you yourself or somebody close to you is asking if it would not be better to give up trading. |
You recognize what works in your favor and you apply it repeatedly. |
You are a conscious trader and you agreed with yourself to follow your system and your system only. |
Emotional |
You need to master the emotional game of fear and happiness (euphoria); else, you never trade what you see! |
Happiness and fear replace each other. Fear wins, because you mostly lose. |
Fear dominates: You have been hurt enough. You will only trade again, when you know that it works. |
Hunger and passion is needed to clear this stage. Most give up, assuming: Trading is not for you! |
You learn to wait until the markets provide you with the trade situation, you desire. |
You trade for a living by understanding your own psychological make-up: Risk tolerance, trading frequency. |
Trading |
Your trading methods are defined. You execute trades on agreed situations or signals. |
You place your trades random based on a wide variety of ideas and signals. |
You use new methods and add complicated trading strategies, you don’t fully understand. |
You apply trading strategies and setups, and define risk parameters for every trade. |
You cut losses and you scale out of winners (as silly as it sounds): You no more let the winners run, you harvest them. |
Taking trades comes naturally. You see key price levels, where prices will accumulate, reverse or breakout. |
Money |
Capital preservation is key. You apply money management at every trade. |
You lose money! Most people blow their account in this stage. |
Trades work and they don’t. Randomness dominates. Losses continue. |
You are placing small orders and you need to hold yourself back from paper trading only. |
You accept losses as part of the game and you are making first positive results. |
You are making constant income by applying money management. |
Investment |
It takes years to develop yourself into a successful trader. Buying a system that works (back test it) and coaching is the only shortcut. |
You get a trading account and software and you get into the game, unprepared, risking all your funds. |
You are either using standard indicators or you buy the first super indicators, classes on DVD, or fast moneymaking education packages. |
Realization: You need outside help to develop yourself into a trader. It gets obvious that many systems don’t work and are not available for $597. |
You learn, you train; you document like a sports pro. You are aware and you get ready for the pre-defined trade situation. |
You analyze, evaluate prepare, perfect. You know times of volatility and consolidation by price action, the economic calendar and time of the day. |
Cost |
Losses, Tuitions |
>$20,000 |
>$5,000 |
>$10,000 |
>$10,000 |
>$10,000 |
Time |
Expect 5 Years |
6 – 12 months |
6 months |
6 – 12 months |
6-12 months |
6 months, onwards |