What does it take to be a trader?

This is the first step you take when starting to look intoThe eureka moment causes a new connection to be
trading. you know thatits a good way of makingmade in your brain. You suddenlyrealise that neither
money because you've heard so many things about ityou, nor anyone else can accurately predict what the
andheard of so many millionaires. Unfortunately, just likemarketwill do in the next ten seconds, never mind the
when you first desire todrive a car you think it will benext 20 mins.
easy - after all, how hard can it be? Price eithermovesBecause of this revelation you stop taking any notice
up or down - what's the big secret to that then - letsof what anyone thinks - whatthis news item will do,
get cracking!and what that event will do to the markets. You
Unfortunately, just as when you first take your place inbecome anindividual with your own method of trading
front of a steering wheelyou find very quickly that youYou start to work just one system that you mould to
haven't got the first clue about what you're tryingto do.your own way of trading, you'restarting to get happy
You take lots of trades and lots of risks. When youand you define your risk threshold.
enter a trade it turnsagainst you so you reverse and itYou start to take every trade that your 'edge' shows
turns again .. and again, and again.has a good probability ofwinning with. When the trade
You may have initial success, and thats even worse -turns bad you don't get angry or even because you
cos it tells your brain thatthis really is simple and youknowin your head that as you couldn't possibly predict
start to risk more money.it it isn't your fault - as soonas you realise that the
You try to turn around your losses by doubling uptrade is bad you close it . The next trade or the one
every time you trade. Sometimesyou'll get away with itafterit or the one after that will have higher odds of
but more often than not you will come away scathedsuccess because you know yoursystem works.
andbruised You are totally oblivious to yourYou stop looking at trading results from a
incompetence at trading.trade-to-trade perspective and start tolook at weekly
This step can last for a week or two of trading butfigures knowing that one bad trade does not a poor
the market is usually swift andyou move onth the nextsystem make.
stage.You have realised in an instant that the trading game is
Step Two - Conscious Incompetenceabout one thing -consistency of your 'edge' and your
Step two is where you realise that there is more workdiscipline to take all the trades no matter whatas you
involved in trading and thatyou might actually have toknow the probabilities stack in your favour.
work a few things out. You consciously realise thatYou learn about proper money management and
youare an incompetent trader - you don't have theleverage - risk of account etc etc - andthis time it
skills or the insight to turn aregular profit.actually soaks in and you think back to those who
You now set about buying systems and e-booksadvised the samething a year ago with a smile. You
galore, read websites based everywherefrom USA toweren't ready then, but you are now. The
the Ukraine. and begin your search for the holy grail.eurekamoment came the moment that you truly
During this timeyou will be a system nomad - you willaccepted that you cannot predict the market.
flick from method to method day by day andweek byStep 4 - Conscious Competence
week never sticking with one long enough to actuallyYou are making trades whenever your system tells
see if it does work.you to. You take losses just aseasily as you take wins
Every time you come upon a new indicator you'll beYou now let your winners run to their conclusion
ecstatic that this is the onethat will make all thefullyaccepting the risk and knowing that your system
difference.makes more money than it looses andwhen you're on
You will test out automated systems on Metatrader,a loser you close it swiftly with little pain to your
you'll play with moving averages,account
Fibonacci lines, support & resistance, Pivots, Fractals,You are now at a point where you break even most
Divergence, DMI, ADX, and ahundred other things all inof the time - day in day out, youwill have weeks
the vein hope that your 'magic system' starts today.where you make 100 pips and weeks where you lose
You'll be a top and bottom picker, trying to find the100 pips -generally you are breaking even and not
exact point of reversal withyour indicators and you'lllosing money. You are now conscious of thefact that
find yourself chasing losing trades and even addingyou are making calls that are generally good and you
tothem because you are so sure you are right.are getting respectfrom other traders as you chat the
You'll go into the live chat room and see other tradersday away. You still have to work at it and thinkabout
making pips and you want toknow why it's not you -your trades but as this continues you begin to make
you'll ask a million questions, some of which are somore money than you loseconsistently.
dumbthat looking back you feel a bit silly. You'll thenYou'll start the day on a 20 pip win, take a 35 pip loss
reach the point where you thinkall the ones who areand have no feelings thatyou've given those pips back
calling pips after pips are liars - they cant be makingbecause you know that it will come back again. You
thatamount because you've studied and you don'twillnow begin to make consistent pips week in and
make that, you know as much as they doand theyweek out 25 pips one week, 50 the nextand so on.
must be lying. But they're in there day after day andThis lasts about 6 months
their account justgrows whilst yours falls.Step Five - Unconscious Competence
You will be like a teenager - the traders that makeNow we're cooking - just like driving a car, every day
money will freely give youadvice but you're stubbornyou get in your seat andtrade - you do everything
and think that you know best - you take no noticenow on an unconscious level. You are running on
andovertrade your account even though everyoneautopilot.
says you are mad to - but you knowbetter. You'llYou start to pick the really big trades and getting 200
consider following the calls that others make but evenpips in a day doesnt makeyou any more excited that
then it wontwork so you try paying for signals fromgetting 1 pips.
someone else - they don't work for youeither.You see the newbies in the forum shouting 'go dollar
You might even approach a 'guru' like Rob Booker orgo' as if they are urging on ahorse to win in the grand
someone on a chat board whopromises to make younational and you see yourself - but many years ago
into a trader(usually for a fee of course). Whether thenow.
guru isgood or not you wont win because there is noThis is trading utopia - you have mastered your
replacement for screen time and youstill think youemotions and you are now a traderwith a rapidly
know best.growing account.
This step can last ages and ages - in fact in realityYou're a star in the trading chat room and people listen
talking with other traders aswell as personalto what you say. Yourecognise yourself in their
experience confirms that it can easily last well over aquestions from about two years ago. You pass on
year andmore nearer 3 years. This is also the stepyouradvice but you know most of it is futile because
when you are most likely to give upthrough sheerthey're teenagers - some of themwill get to where
frustration.you are - some will do it fast and others will be slower
Around 60% of new traders die out in the first 3-literally dozens and dozens will never get past stage
months - they give up and this isgood - think about it -two, but a few will.
if trading was easy we would all be millionaires. anotherTrading is no longer exciting - in fact it's probably boring
20% keep going for a year and then in desperationyou to bits - likeeverything in life when you get good at
take risks guaranteed to blowtheir account which ofit or do it for your job - it gets boring -you're doing your
course it does.job and that's that.
What may suprise you is that of the remaining 20% allFinally you grow out of the chat rooms and find a few
of them will last around 3years - and they will thinkchoice people who you conversewith about the
they are safe in the water - but even at 3 years onlymarkets without being influenced at all.
afurther 5-10% will continue and go on to actuallyAll the time you are honing your methods to extract
make money consistently.the maximum profit from themarket without increasing
By the way - they are real figures, not just some iverisk. Your method of trading doesnt change - it just
picked out of my head - sowhen you get to 3 years ingetsbetter - you now have what women call 'intuition'
the game dont think its plain sailing from there.You can now say with your head held high "I'm a
Iv had many people argue with me about thesecurrency trader" but to be honestyou dont even
timescales - funny enough none of themhave beenbother telling anyone - it's a job like any other.
trading for more that 3 years - if you think you knowI hope youve enjoyed reading this journey into a
better then ask on aboard for someone who's beentraders mind and that hopefullyyouve identified with
trading 5 years and ask them how long it takessome points in here.
tobecome fully 100% proficient. Sure i guess there willRemember that only 5% will actually make it - but the
be exceptions to the rle - buti havent met any yet.reason for that isnt ability,its staying power and the
Eventually you do begin to come out of this phase.ability to change your perceptions and paradigms as
You've probably committed moretime and money thannewinformation comes available.
you ever thought you would, lost 2 or 3 loadedThe losers are those who wanted to 'get rich quick'
accounts and allbut given up maybe 3 or 4 times butbut approached the market andwithin 6 months put on
now its in your blooda pair of blinkers so they couldnt see the obvious - a
One day - im a split second moment you will enterkindof "this is the way i see it and thats that" scenario -
stage 3.refusing to assimilate newinformation that changes that
Step 3 - The Eureka Momentperception.
Towards the end of stage two you begin to realiseIm happy to tell you that the reason i started trading
that it's not the system that ismaking the difference.was because of the 'get richquick' mindset. Just that
You realise that its actually possible to make moneynow i see it as 'get rich slow'
with asimple moving average and nothing else IF youIf youre thinking about giving up i have one piece of
can get your head and money managementright Youadvice for you ....
start to read books on the psychology of trading andAsk yourself the question "how many years would
identify with thecharacters portrayed in those booksyou go to college if you knew for afact that there
and finally comes the eureka moment.was a million dollars a year job at the end of it?