Your Progress as a trader

One of the most difficult things for a trading beginner is to find out how far you are in trading. Many traders at this stage may feel that they are making significant progress, but the account may not show it yet.

But how do you know where you stand? Here are some observations of the levels that many beginners have to pass on their way to becoming successful traders.

1) The Clueless
The first group of people can be described as starting to trade before they have received any training. This market participants may have had some great successes, but they were quickly paid back. When they desperately tried to repeat these successes, they lost more and more money and quickly became frustrated. You suddenly think you can’t find the groove you once had. Then you try to increase the size of your shares or create the ‘Home Run’ at some point to balance your account again. One overlooks however that the first successful trades usually had nothing to do with ability to trade but only with luck – and suddenly the luck has left and it does not take long and the account is empty.

2) The Half-Knowers
The next stage could be where some of you are now. You’ve set up a trading room and maybe attended one or the other seminar. You’ve seen strategies and games and you’re excited because you see that it ‘works’ after all.

It’s not like reading a book about the past successes from a book writer, you see the strategies in front of you (mostly at the weekend) and think you’ve understood everything, but there are other problems now.

Maybe because of your past experiences, you just can’t pull the trigger on the trades and suffer from the PullTheTrigger syndrome.

You might even overcome this hurdle, but you wait for confirmation from the market every time you trade and are therefore always a little too late in the market and are at a disadvantage or you miss the signal completely and see the market running away.

Then comes the point where you get the feeling to always choose the loser trades. Once you have a trade in the profit, you get afraid the trade could run into the loss again and you exit the trades prematurely with small PullBacks, only after that only again the HomeRun and the big winning trade to look after.

This is a frequent phase in which many traders have been and a lot of them have finally given up. But you have to ask yourself how some of them got over it? Why or how did these traders get into the trading play after all?

3) The Semi-Pros
Next comes a group of traders who will certainly also include some of you.

You start to feel good. You come into the trades and start to hold some winners. You develop a real “sense of getting out of the losers” at the last minute.

You start building up your account. But just then you realize that the one or other error appears and the account is strongly reset again.

Then you tell yourself that you will never make this mistake again and you stick to it – you have already learned.  But another mistake comes along, and another one and you always make big trenches in your account. As long as you manage to free yourself from these mistakes and learn from them, you have the chance to advance to the next level and take the next step. But it will be a race with its frustration, its emotions and drawdowns – and finally what lasts longer:

The confidence to ‘make it’ or the ‘realization’ to have put all the effort into it for nothing and give up.

4) The Traders
Finally, there is the group that manages to get to work in the morning with a sense of calm. Now it starts to become more relaxing than nerve-wracking. You look back at all the rules you have learned and you see that the set of rules was already complete in the stages before. But you only had to learn to follow it consistently. You only had to really “understand” it the second time because you did it right………..

The experience has flowed in and it has developed a feeling for this “art” that one needs to act. Only from this point on can you let your ‘gut feeling’ flow into trading. Where all the technical analyses in the world might tell you at some point that, for example, an instrument is to held at a support level, you have the feeling or experience that this is not the case. So you are willing to get out of the trade quickly or not get in at all and it saves you from reduced profits or losses.

If a beginner thinks he has to rely on his gut feeling, he will soon be faced with an empty account. However, with a trader at the highest level, it is no longer gut feeling but 100 and 1000 times experience.

How long does it take to complete this process?  For many people this feeling of “rest” comes over them in about 2 – 3 years full time, for some even earlier.  But it is hard to say, because every person is different. So what do you do to get there?

Well, if you are here to read this, you are already through the first step to recognize and internalize these phases of a trader. Not getting any training or help will almost guarantee failure, or at least require a long learning period and will also mean a lot of burned capital.

… how to behave in the various phases in order to move on to the next phase, more about this next week.

 

Disclaimer:
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. Hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. All information on this website is for educational purposes only and is not intended to provide financial advice. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold this information harmless in any and all ways.

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