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Very interesting paper. It would also be interesting for new traders to have some idea of how long it would take to reach any of those five levels..... If you knew from the start it would take you years instead of months to reach levels 3-5 would you still consider trading?
I have been trading for 16 years now and it took me almost 5 years to reach level 5.
If you are profitable by doing this then you are a trader. Good for you to have such patience, I know I don't! That is one reason I don't discretionary trade but algorithm trade, because I'm too impatient. If I watch the screen I want to be part of the action. I also feel my hourly rate it going down!
I'll lump my thought's to everyones posts here....
I know people have put together different "tests" or "levels" to rate where you are as a trader. I think if you take other professions, and try to rate what levels people are at, I think it's not only incredibly complex, but in some ways incredibly simple.
What are the "levels" of an athlete...musician...actor....doctor??
While having all the training, skills, and knowledge provide the basis...it's ultimately the person him/herself to be the total deciding factor. We've all seen peak performers crash and burn, and we love a good celebrity trainwreck....not to say the person wasn't talented or at a high level (maybe they weren't even talented, but considered at a high-level)...It happens. Millionaire one day, pauper the next.
Does that mean the "you fill in the blank here" lost his skills, knowledge that got him to the top?
That's the hard part about trading, is that things can happen very fast to put you out of business. I'm sure some darn good traders got royally screwed on the flash crash....
I'm sure some very savvy investory got their rear handed to them over the last 4 years.
Overall, I'm not a fan of the "test". I find it misleading in what is truly important as a trader. Why focus on information that disctracts us from the market? In particular, I really detest the part about being a chat room/forum hero.....I think that's distracting for traders. Why would you care if you're an ace or not?
I'm always trying to simplify trading....maybe that's a good thread if someone wants to start it.
Going from one level to another in trading is a means to an end, because you are the level and you are always evolving.
Soooo.....I guess if a trader understands market dynamics, notices reliable market patterns, and can trade with low risk, while putting more money in the pocket every 6 months during the majority of the 6 month time frames, you're a top trader.....regardless of your personal issues. If you've mastered the majority of your issues and continue to try to improve yourself and make $$$....you're the man in my book.
I agree Kbit...price is KING! All we need to do as traders, is understand price movement (too bad it takes 50,000 hours)...haha
I agree with a certain trading mentor, that most traders spend too much time on stupid crap. WE wanna read all the forums, spend time studying this and that....blah blah blah....if we only focused on understanding where the orders are, we'd all be rich!
Another side note....I was reading a trading book, and the quite successful trader mentioned his training was pouring over tons of charts til he could look at any daily chart and tell you the instrument and year and what it did next....besides memorizing everything, he studied charts til he could tell what the market would most likely do the following day.
If you're humbled while reading the last paragraph like me, we got a ways to go if that's the benchmark...
and my last side note (I promise)....I think a trader is actually NOT profitable until he/she has actually made more money than losses....so yes, that blowout 5 years ago still counts....if you haven't made more money than you've lost, you're still an unprofitable trader.....
I've read this document several times over the last year or so. And here is my conclusion about it.
There is a level of unconscious competency that comes only with battle scars. Take me for instance. I spent 15+ years in the mortgage business. In the beginning, I fumbled, stuttered, made stupid mistakes that cost me and my clients money and and in general acted like a complete newbie.
After a year or so learning the basics and some of the nuances, I was pretty decent in terms of being able to do loans with some confidence. However, I still needed to look at the manuals on every loan and make sure I could do that loan.
14 years later and after working 12-14 hours a day for those 14 years, countless classes, seminars and coaching, I was a walking talking expert. I knew the guidelines and nuances of dozens of complicated loan programs. I could read complicated tax returns better than most underwriters. I knew the approximate values of every neighborhood in my city. You name it and I could tell you yes or no without looking. I knew what worked and what didn't.
This level of knowledge led to more and more confidence which led to more and more business. People trust people who know what they are doing. I was the number two lender in my community and would have been number one except the number one guy was willing to work longer hours than me. I consistently placed in the top 15 and a couple of times in the top 10 out of 2000 mortgage reps in my company. I had unconscious competence.
The end result? Every day I got of bed, I KNEW I would make "X" amount of dollars that day. Why did I know this? I had records to prove it.
The same is true of trading. Screen time equals confidence. But here is a catch, I think screen time with the same set up or similar set ups is the key. 10,000 hours of watching a 10 different methods is only 1000 hours each. And I am willing to bet very few of us give 1000 hours to a method before moving on.
So I believe in the premise. Just spend the time watching the right thing...or at least the same thing long enough to really internalize it.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
I agree, that is why I have stuck with the same thing. I realize it isn't for everyone, but the way I look at it is that when I do master my setup then I can start peeling layers off.
I have looked at and built hundreds of different systems though which I do think makes you a better trader as you learn why things work and don't work and the inner nuances of general trading.
I remember I went to a Real Estate Guru's seminar about 12 years ago. He said I have two kinds of success stories from my students:
1. Those that do exactly what I teach them. day in, day out, they do the same things repetatively, religiously and are of not the high enough IQ to figure other ways out on their own. They just follow the rule book and execute.
2. Those that are too smart for their own good. They dibble, dabble and play around for a few years, think that they can do it better right off the start, then they end up coming back to most of what I taught them and finally coming around to profitability.
I guess I put myself into the #2 category, whereas my wife (while not dumb by any means) can take directions and follow and execute. she is every bit as good as I am and she probably has half the time starting at charts but just as much using the same setup.
I too am a #2 but when the guy that got me into trading said essentially the same thing as your guru, I was to smart to believe him and do what your wife has done. Just execute. Crazy how things work out.
I read a book called "Rigged" about the NYMEX and turns out most of the good traders were from a blue collar background. Guys that knew how to throw a punch and drink hard at night. Street toughs as it were. Trading is a zero sum game and these guys understood that. Us so called intellectuals don't get that up front. In business we strive for a win win situation most of the time. That doesn't work in trading. In the end, its me taking your money or vice versa. Every winner has a loser...at least in theory anyway.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
