Jan 24 2011, 12:05 PM
QUOTE(bulkbiz @ Jan 22 2011, 06:09 PM)
Traders often pass through a series of 5 stages before becoming successful. In order, these are:
1. Unconscious Incompetence- Brand new traders enter at this stage, full of excitement and overconfidence that they will amass riches overnight. “How hard could it be? Price either goes up or down, right?” one may ask. The trader funds his account and starts quickly, taking lots of trades and unknowingly take on lots of risk. After a few initial successes, he is disappointed that price somehow turns on him every time he enters and he subsequently takes revenge by doubling up on new trades.
2. Conscious Competence- After realizing how out of touch with the reality and danger of the market he was, the trader progresses to the next stage and sets out to educate himself by buying loads of systems, ebooks, and courses, searching for the “holy grail.” The trader seeks advice and entry signals from other traders in forums who brag about their earnings and wonders why it’s not him.
3. The “Eureka” Moment- At this stage the trader finally realizes that it’s not necessarily the system that’s causing him to lose money, and that even a simple system that is based on how the market works and has a predictable edge can make money, so long as emotions are under control and the trader practices good money management. Once the trader realizes this, he/she can stop caring about what others are saying or trading and stick to one system. The trader executes trades with discipline every time an opportunity comes and doesn’t get disappointed by individual losses as it’s now a certainty that this type of trading will result in a profit over the long run. The light at the end of the tunnel is now visible.
4. Conscious Competence- At the fourth stage the trader now makes trades whenever the system instructs him to, and the trader is fully accepting the risk involved. The trader furthermore cuts losses short and gets out with discipline when things get hairy in the market. Although it’s not quite second nature yet, he knows what it takes to be profitable and now manages to break-even.
5. Unconscious Competence- Finally the trader has achieved victory! He has become so used to trading that it’s become natural. The trader is now able to pick really big trades and hold on to big winners with confidence. Furthermore, he has mastered his emotions and is now profitable.
Source from internet
newbie... im on between states 1 and 2... still hanging. quite hard to learn by myself.1. Unconscious Incompetence- Brand new traders enter at this stage, full of excitement and overconfidence that they will amass riches overnight. “How hard could it be? Price either goes up or down, right?” one may ask. The trader funds his account and starts quickly, taking lots of trades and unknowingly take on lots of risk. After a few initial successes, he is disappointed that price somehow turns on him every time he enters and he subsequently takes revenge by doubling up on new trades.
2. Conscious Competence- After realizing how out of touch with the reality and danger of the market he was, the trader progresses to the next stage and sets out to educate himself by buying loads of systems, ebooks, and courses, searching for the “holy grail.” The trader seeks advice and entry signals from other traders in forums who brag about their earnings and wonders why it’s not him.
3. The “Eureka” Moment- At this stage the trader finally realizes that it’s not necessarily the system that’s causing him to lose money, and that even a simple system that is based on how the market works and has a predictable edge can make money, so long as emotions are under control and the trader practices good money management. Once the trader realizes this, he/she can stop caring about what others are saying or trading and stick to one system. The trader executes trades with discipline every time an opportunity comes and doesn’t get disappointed by individual losses as it’s now a certainty that this type of trading will result in a profit over the long run. The light at the end of the tunnel is now visible.
4. Conscious Competence- At the fourth stage the trader now makes trades whenever the system instructs him to, and the trader is fully accepting the risk involved. The trader furthermore cuts losses short and gets out with discipline when things get hairy in the market. Although it’s not quite second nature yet, he knows what it takes to be profitable and now manages to break-even.
5. Unconscious Competence- Finally the trader has achieved victory! He has become so used to trading that it’s become natural. The trader is now able to pick really big trades and hold on to big winners with confidence. Furthermore, he has mastered his emotions and is now profitable.
Source from internet
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