| This is the first step you take when
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| | moment.
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| starting to look into trading. you know
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| | The eureka moment causes a new connection
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| thatits a good way of making money
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| | to be made in your brain. You
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| because you've heard so many things about
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| | suddenlyrealise that neither you, nor
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| it andheard of so many millionaires.
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| | anyone else can accurately predict what
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| Unfortunately, just like when you first
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| | the marketwill do in the next ten
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| desire todrive a car you think it will be
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| | seconds, never mind the next 20 mins.
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| easy - after all, how hard can it be?
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| | Because of this revelation you stop
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| Price eithermoves up or down - what's the
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| | taking any notice of what anyone thinks -
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| big secret to that then - lets get
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| | whatthis news item will do, and what that
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| cracking!
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| | event will do to the markets. You become
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| Unfortunately, just as when you first
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| | anindividual with your own method of
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| take your place in front of a steering
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| | trading
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| wheelyou find very quickly that you
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| | You start to work just one system that
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| haven't got the first clue about what
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| | you mould to your own way of trading,
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| you're tryingto do. You take lots of
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| | you'restarting to get happy and you
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| trades and lots of risks. When you enter
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| | define your risk threshold.
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| a trade it turnsagainst you so you
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| | You start to take every trade that your
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| reverse and it turns again .. and again,
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| | 'edge' shows has a good probability
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| and again.
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| | ofwinning with. When the trade turns bad
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| You may have initial success, and thats
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| | you don't get angry or even because you
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| even worse - cos it tells your brain
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| | knowin your head that as you couldn't
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| thatthis really is simple and you start
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| | possibly predict it it isn't your fault -
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| to risk more money.
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| | as soonas you realise that the trade is
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| You try to turn around your losses by
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| | bad you close it . The next trade or the
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| doubling up every time you trade.
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| | one afterit or the one after that will
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| Sometimesyou'll get away with it but more
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| | have higher odds of success because you
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| often than not you will come away scathed
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| | know yoursystem works.
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| andbruised You are totally oblivious to
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| | You stop looking at trading results from
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| your incompetence at trading.
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| | a trade-to-trade perspective and start
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| This step can last for a week or two of
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| | tolook at weekly figures knowing that one
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| trading but the market is usually swift
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| | bad trade does not a poor system make.
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| andyou move onth the next stage.
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| | You have realised in an instant that the
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| Step Two - Conscious Incompetence
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| | trading game is about one thing
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| Step two is where you realise that there
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| | -consistency of your 'edge' and your
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| is more work involved in trading and
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| | discipline to take all the trades no
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| thatyou might actually have to work a few
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| | matter whatas you know the probabilities
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| things out. You consciously realise that
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| | stack in your favour.
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| youare an incompetent trader - you don't
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| | You learn about proper money management
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| have the skills or the insight to turn
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| | and leverage - risk of account etc etc -
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| aregular profit.
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| | andthis time it actually soaks in and you
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| You now set about buying systems and
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| | think back to those who advised the
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| e-books galore, read websites based
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| | samething a year ago with a smile. You
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| everywherefrom USA to the Ukraine. and
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| | weren't ready then, but you are now. The
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| begin your search for the holy grail.
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| | eurekamoment came the moment that you
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| During this timeyou will be a system
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| | truly accepted that you cannot predict
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| nomad - you will flick from method to
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| | the market.
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| method day by day andweek by week never
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| | Step 4 - Conscious Competence
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| sticking with one long enough to actually
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| | You are making trades whenever your
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| see if it does work.
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| | system tells you to. You take losses just
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| Every time you come upon a new indicator
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| | aseasily as you take wins You now let
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| you'll be ecstatic that this is the
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| | your winners run to their conclusion
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| onethat will make all the difference.
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| | fullyaccepting the risk and knowing that
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| You will test out automated systems on
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| | your system makes more money than it
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| Metatrader, you'll play with moving
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| | looses andwhen you're on a loser you
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| averages,
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| | close it swiftly with little pain to your
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| Fibonacci lines, support & resistance,
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| | account
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| Pivots, Fractals, Divergence, DMI, ADX,
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| | You are now at a point where you break
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| and ahundred other things all in the vein
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| | even most of the time - day in day out,
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| hope that your 'magic system' starts
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| | youwill have weeks where you make 100
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| today.
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| | pips and weeks where you lose 100 pips
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| You'll be a top and bottom picker, trying
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| | -generally you are breaking even and not
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| to find the exact point of reversal
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| | losing money. You are now conscious of
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| withyour indicators and you'll find
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| | thefact that you are making calls that
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| yourself chasing losing trades and even
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| | are generally good and you are getting
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| adding tothem because you are so sure you
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| | respectfrom other traders as you chat the
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| are right.
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| | day away. You still have to work at it
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| You'll go into the live chat room and see
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| | and thinkabout your trades but as this
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| other traders making pips and you want
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| | continues you begin to make more money
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| toknow why it's not you - you'll ask a
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| | than you loseconsistently.
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| million questions, some of which are so
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| | You'll start the day on a 20 pip win,
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| dumbthat looking back you feel a bit
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| | take a 35 pip loss and have no feelings
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| silly. You'll then reach the point where
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| | thatyou've given those pips back because
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| you thinkall the ones who are calling
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| | you know that it will come back again.
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| pips after pips are liars - they cant be
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| | You willnow begin to make consistent pips
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| making thatamount because you've studied
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| | week in and week out 25 pips one week, 50
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| and you don't make that, you know as much
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| | the nextand so on.
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| as they doand they must be lying. But
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| | This lasts about 6 months
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| they're in there day after day and their
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| | Step Five - Unconscious Competence
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| account justgrows whilst yours falls.
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| | Now we're cooking - just like driving a
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| You will be like a teenager - the traders
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| | car, every day you get in your seat
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| that make money will freely give
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| | andtrade - you do everything now on an
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| youadvice but you're stubborn and think
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| | unconscious level. You are running on
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| that you know best - you take no notice
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| | autopilot.
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| andovertrade your account even though
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| | You start to pick the really big trades
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| everyone says you are mad to - but you
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| | and getting 200 pips in a day doesnt
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| knowbetter. You'll consider following the
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| | makeyou any more excited that getting 1
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| calls that others make but even then it
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| | pips.
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| wontwork so you try paying for signals
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| | You see the newbies in the forum shouting
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| from someone else - they don't work for
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| | 'go dollar go' as if they are urging on
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| youeither.
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| | ahorse to win in the grand national and
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| You might even approach a 'guru' like Rob
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| | you see yourself - but many years ago
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| Booker or someone on a chat board
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| | now.
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| whopromises to make you into a
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| | This is trading utopia - you have
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| trader(usually for a fee of course).
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| | mastered your emotions and you are now a
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| Whether the guru isgood or not you wont
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| | traderwith a rapidly growing account.
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| win because there is no replacement for
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| | You're a star in the trading chat room
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| screen time and youstill think you know
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| | and people listen to what you say.
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| best.
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| | Yourecognise yourself in their questions
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| This step can last ages and ages - in
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| | from about two years ago. You pass on
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| fact in reality talking with other
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| | youradvice but you know most of it is
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| traders aswell as personal experience
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| | futile because they're teenagers - some
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| confirms that it can easily last well
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| | of themwill get to where you are - some
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| over a year andmore nearer 3 years. This
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| | will do it fast and others will be slower
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| is also the step when you are most likely
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| | -literally dozens and dozens will never
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| to give upthrough sheer frustration.
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| | get past stage two, but a few will.
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| Around 60% of new traders die out in the
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| | Trading is no longer exciting - in fact
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| first 3 months - they give up and this
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| | it's probably boring you to bits -
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| isgood - think about it - if trading was
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| | likeeverything in life when you get good
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| easy we would all be millionaires.
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| | at it or do it for your job - it gets
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| another
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| | boring -you're doing your job and that's
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| 20% keep going for a year and then in
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| | that.
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| desperation take risks guaranteed to
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| | Finally you grow out of the chat rooms
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| blowtheir account which of course it
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| | and find a few choice people who you
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| does.
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| | conversewith about the markets without
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| What may suprise you is that of the
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| | being influenced at all.
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| remaining 20% all of them will last
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| | All the time you are honing your methods
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| around 3years - and they will think they
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| | to extract the maximum profit from
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| are safe in the water - but even at 3
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| | themarket without increasing risk. Your
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| years only afurther 5-10% will continue
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| | method of trading doesnt change - it just
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| and go on to actually make money
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| | getsbetter - you now have what women call
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| consistently.
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| | 'intuition'
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| By the way - they are real figures, not
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| | You can now say with your head held high
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| just some ive picked out of my head -
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| | "I'm a currency trader" but to be
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| sowhen you get to 3 years in the game
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| | honestyou dont even bother telling anyone
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| dont think its plain sailing from there.
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| | - it's a job like any other.
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| Iv had many people argue with me about
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| | I hope youve enjoyed reading this journey
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| these timescales - funny enough none of
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| | into a traders mind and that
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| themhave been trading for more that 3
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| | hopefullyyouve identified with some
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| years - if you think you know better then
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| | points in here.
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| ask on aboard for someone who's been
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| | Remember that only 5% will actually make
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| trading 5 years and ask them how long it
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| | it - but the reason for that isnt
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| takes tobecome fully 100% proficient.
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| | ability,its staying power and the ability
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| Sure i guess there will be exceptions to
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| | to change your perceptions and paradigms
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| the rle - buti havent met any yet.
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| | as newinformation comes available.
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| Eventually you do begin to come out of
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| | The losers are those who wanted to 'get
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| this phase. You've probably committed
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| | rich quick' but approached the market
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| moretime and money than you ever thought
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| | andwithin 6 months put on a pair of
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| you would, lost 2 or 3 loaded accounts
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| | blinkers so they couldnt see the obvious
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| and allbut given up maybe 3 or 4 times
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| | - a kindof "this is the way i see it and
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| but now its in your blood
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| | thats that" scenario - refusing to
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| One day - im a split second moment you
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| | assimilate newinformation that changes
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| will enter stage 3.
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| | that perception.
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| Step 3 - The Eureka Moment
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| | Im happy to tell you that the reason i
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| Towards the end of stage two you begin to
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| | started trading was because of the 'get
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| realise that it's not the system that
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| | richquick' mindset. Just that now i see
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| ismaking the difference. You realise that
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| | it as 'get rich slow'
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| its actually possible to make money with
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| | If youre thinking about giving up i have
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| asimple moving average and nothing else
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| | one piece of advice for you ....
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| IF you can get your head and money
| |
| | Ask yourself the question "how many years
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| managementright You start to read books
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| | would you go to college if you knew for
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| on the psychology of trading and identify
| |
| | afact that there was a million dollars a
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| with thecharacters portrayed in those
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| | year job at the end of it?
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| books and finally comes the eureka
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|
