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