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The 38 Steps of Trading


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The 38 Steps of Trading

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  #1 (permalink)
OC, California, USA
 
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I think I'm on step 29..

1. We accumulate information--buying books, going to seminars and researching.
2. We begin to trade with our 'new' knowledge.
3. We consistently 'donate' and then realize we may need more knowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our 'updated' knowledge.
7. We get 'beat up' again and begin to lose some of our confidence. Fear starts setting in.
8. We start to listen to 'outside news' & other traders.
9. We go back into the market and continue to donate.
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and continue to donate.
13. We get 'overconfident' & market humbles us.
14. We start to understand that trading success fully is going to take more time and more knowledge then we anticipated.

Most People Will Give up at this Point as they Realize Work is Involved

15. We get serious and start concentrating on learning a 'real' methodology.
16. We trade our methodology with some success, but realize that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute.
20. We add, subtract and modify rules as we see a need to be more proficient with our rules.
21. We go back into the market and continue to donate.We go back into the market and continue to donate.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade we still have a tendency to violate our rips and our results are still erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don't follow them.
30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better.
31. We continue to trade and the market teaches us more and more about ourselves.
32. We master our methodology and trading rules.
33. We begin to consistently make money. We begin to consistently make money.
34. We get a little overconfident and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.
37. We are making more money then we ever dreamed to be possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of

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I think I'm around step #31 to 33

But it fluctuates a few steps forward, couple steps back

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  #3 (permalink)
New Orleans, La (Mardi Gras City)
 
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Who told you so much about me?

Do you know my wife?

JK... I'm at level 30 -31 wishing I was at 38-40... I'm sure it doesn't stop at 38

Thanks for the post

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  #4 (permalink)
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Very good post Shodson !!
So we all went through this right ?!

Makes me feel better about myself already !
Cheers

"Risk more than others think safe.
Dream more than others think practical.
Expect more than others think possible.
Care more than others think wise"
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shodson View Post
I think I'm on step 29..

1. We accumulate information--buying books, going to seminars and researching.
2. We begin to trade with our 'new' knowledge.
3. We consistently 'donate' and then realize we may need more knowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our 'updated' knowledge.
7. We get 'beat up' again and begin to lose some of our confidence. Fear starts setting in.
8. We start to listen to 'outside news' & other traders.
9. We go back into the market and continue to donate.
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and continue to donate.
13. We get 'overconfident' & market humbles us.
14. We start to understand that trading success fully is going to take more time and more knowledge then we anticipated.

Most People Will Give up at this Point as they Realize Work is Involved

15. We get serious and start concentrating on learning a 'real' methodology.
16. We trade our methodology with some success, but realize that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute.
20. We add, subtract and modify rules as we see a need to be more proficient with our rules.
21. We go back into the market and continue to donate.We go back into the market and continue to donate.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade we still have a tendency to violate our rips and our results are still erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don't follow them.
30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better.
31. We continue to trade and the market teaches us more and more about ourselves.
32. We master our methodology and trading rules.
33. We begin to consistently make money. We begin to consistently make money.
34. We get a little overconfident and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.
37. We are making more money then we ever dreamed to be possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of

Hi all,
I am sure that all of us can go easy until the number 35.
The difficult is the number 36. Stop to think and mentalise to follow your trade plan like a robot. If we pay a kid to do this, he (she) will do very good trades.

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  #6 (permalink)
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I had hoped I was further along, but I think I'm only at around 15 or 16. Don't want to give up.

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  #7 (permalink)
OC, California, USA
 
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David_R View Post
I had hoped I was further along, but I think I'm only at around 15 or 16. Don't want to give up.

Stay with it, just don't blow out your account in the process. If you are determined you can do it, just trade small or on SIM in the meanwhile.

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  #8 (permalink)
Florida
 
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Ouch, step 10 or so...got work to do!

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  #9 (permalink)
Cincinnati
 
 
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Hmm I don't know which number I am on. I think I have a disagreement with the one that says "it's not the methodology, it's within us". The thing with my history of trading, is that I really don't think I have discipline problems. I have always been solid as a rock with following trading rules, I just don't think I've found a methodology with a real edge yet... anyway my 2 cents.

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  #10 (permalink)
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Loved this scale.... I am at 20 ..... done a lots of mistakes in my past ... being quite successful recently ...but my premise is that you never stop to learn ( and that is why it is fun)..

You know what you know but you do not know what you do not know.
You do not see things how they are, you see things how you are.
In life you do what you want but you do not want what you want.
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  #11 (permalink)
sydney, nsw, australia
 
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Fantastically accurate!

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  #12 (permalink)
Detroit, MI
 
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I am at #34, unfortunately (fortunately?)

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  #13 (permalink)
Chicago
 
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Step-5 newbie here. Looking up and forward from here!
Thanks to futures.io (formerly BMT) and everyone here for this excellent forum.

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Market Wizard
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Hi shodson,

if you are on step 29, how do you know about the steps that will follow? Maybe there are nine further steps to go, maybe there are thirty-seven. Step 29 suggests that you have nearly made it. Many of us think in a similar way, otherwise we would not continue. Self-delusion keeps us all alive.

Each of us has different habits and skills, so the number of steps can be few or many. If you have a mentor, who provides you with a framework and points to your weaknesses, the process might be accelerated. The real danger is the habit of running in circles. This would increase the number of steps to infinity.

shodson View Post
I think I'm on step 29..

1. We accumulate information--buying books, going to seminars and researching.
2. We begin to trade with our 'new' knowledge.
3. We consistently 'donate' and then realize we may need more knowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our 'updated' knowledge.
7. We get 'beat up' again and begin to lose some of our confidence. Fear starts setting in.
8. We start to listen to 'outside news' & other traders.
9. We go back into the market and continue to donate.
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and continue to donate.
13. We get 'overconfident' & market humbles us.
14. We start to understand that trading success fully is going to take more time and more knowledge then we anticipated.

Most People Will Give up at this Point as they Realize Work is Involved

15. We get serious and start concentrating on learning a 'real' methodology.
16. We trade our methodology with some success, but realize that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute.
20. We add, subtract and modify rules as we see a need to be more proficient with our rules.
21. We go back into the market and continue to donate.We go back into the market and continue to donate.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade we still have a tendency to violate our rips and our results are still erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don't follow them.
30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better.
31. We continue to trade and the market teaches us more and more about ourselves.
32. We master our methodology and trading rules.
33. We begin to consistently make money. We begin to consistently make money.
34. We get a little overconfident and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.
37. We are making more money then we ever dreamed to be possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of


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  #15 (permalink)
Chicago
 
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In fact we're always learning in life...so it is 'infinity' ;-)

Fat Tails View Post
Hi shodson,

if you are on step 29, how do you know about the steps that will follow? Maybe there are nine further steps to go, maybe there are thirty-seven. Step 29 suggests that you have nearly made it. Many of us think in a similar way, otherwise we would not continue. Self-delusion keeps us all alive.

Each of us has different habits and skills, so the number of steps can be few or many. If you have a mentor, who provides you with a framework and points to your weaknesses, the process might be accelerated. The real danger is the habit of running in circles. This would increase the number of steps to infinity.


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  #16 (permalink)
New York
 
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shodson View Post
I think I'm on step 29..

1. We accumulate information--buying books, going to seminars and researching.
2. We begin to trade with our 'new' knowledge.
3. We consistently 'donate' and then realize we may need more knowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our 'updated' knowledge.
7. We get 'beat up' again and begin to lose some of our confidence. Fear starts setting in.
8. We start to listen to 'outside news' & other traders.
9. We go back into the market and continue to donate.
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and continue to donate.
13. We get 'overconfident' & market humbles us.
14. We start to understand that trading success fully is going to take more time and more knowledge then we anticipated.

Most People Will Give up at this Point as they Realize Work is Involved

15. We get serious and start concentrating on learning a 'real' methodology.
16. We trade our methodology with some success, but realize that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute.
20. We add, subtract and modify rules as we see a need to be more proficient with our rules.
21. We go back into the market and continue to donate.We go back into the market and continue to donate.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade we still have a tendency to violate our rips and our results are still erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don't follow them.
30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better.
31. We continue to trade and the market teaches us more and more about ourselves.
32. We master our methodology and trading rules.
33. We begin to consistently make money. We begin to consistently make money.
34. We get a little overconfident and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.
37. We are making more money then we ever dreamed to be possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of


I believe that I am around 30 or 31 at this point in my trading.

Cheers
Ryan

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  #17 (permalink)
New York
 
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itrade2win View Post
I believe that I am around 30 or 31 at this point in my trading.

Cheers
Ryan



I am at 33... and I visited every state in my three years ( and probably 3000 hours) of hard work ......


Guys if you are not passionate about this , you will never make it .....

Passion is the only thing that will keep you alive when you will face the countless losses and the stinging feeling that all this time is wasted....

It is not about the money ..... it is about the game

You know what you know but you do not know what you do not know.
You do not see things how they are, you see things how you are.
In life you do what you want but you do not want what you want.
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  #18 (permalink)
Philly, Pa
 
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Where was the part about where you get married, and then get divorced, and you wife takes half your money?

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  #19 (permalink)
desert CA
 
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I'm rotating around 16-19. Once in a while I feel like 25, then realize most likely it's a momentary delusion.

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  #20 (permalink)
Norwich, UK
 
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tigertrader View Post
Where was the part about where you get married, and then get divorced, and you wife takes half your money?

I think that's step 13 - We get 'overconfident' & market humbles us

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  #21 (permalink)
Toronto
 
 
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Thanks for sharing.

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  #22 (permalink)
Marketing Specialist
Portland, Oregon
 
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tigertrader View Post
Where was the part about where you get married, and then get divorced, and you wife takes half your money?

Throw it into one of the steps where you get 'humbled'.

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  #23 (permalink)
Toronto, Canada
 
Experience: Beginner
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Broker: IB
Trading: Stocks
 
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Isn't it preferable to have a mentor who can help you in getting to where you want to go rather than trying to find the way/path at your own???

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  #24 (permalink)
Hanover, Germany
 
Experience: Beginner
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TorontoTrader View Post
Isn't it preferable to have a mentor who can help you in getting to where you want to go rather than trying to find the way/path at your own???


imo the answer is mostly a matter of

a) finding a mentor that
# knows how to guide people without forcing sth upon them
# is not a fraud

b) personal preference

I guess.

I personally never wanted/looked for a mentor, as I understood relatively early, that ultimately I have to find/develop/alter the system that really suits me on my own and moreover need to control myself psychologically, anyways.
But I have always been the type of person who prefered self-education.

For some it might be better to find a mentor, I guess.

ST

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  #25 (permalink)
Market Wizard
Prince George BC Canada
 
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Scalpingtrader View Post
I personally never wanted/looked for a mentor, as I understood relatively early, that ultimately I have to find/develop/alter the system that really suits me on my own and moreover need to control myself psychologically, anyways.
But I have always been the type of person who prefered self-education.

For some it might be better to find a mentor, I guess.

ST

I looked for a mentor when I first started. All I found were people wanting to sell me systems. I had one guy who was only going to charge me a daily rate. Set me up with software so he could direct me in real time how to trade ES. Day one we broke even and when I asked how much he made trading he said he didn’t trade. End of relationship.

You shouldn’t expect a mentor to show you a method. You should expect a mentor to guide you through the process of finding and developing a system that suites you. Too many people are looking to copy a method that may not be appropriate for them.

"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
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  #26 (permalink)
Fairburn, Georgia
 
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I'm for sure on step 19, but do fall in line with some of the higher steps. I haven't really paid that much tuition or donations. I'm done going in circles and realize I'm always going to be learning. I've been humbled and know I will be humbled some more down the road. Something so simplistic that I've twisted and made it more complicated than it needs to be.

Thanks for sharing your trading milestones.

Process oriented goals #1.
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  #27 (permalink)
Buffalo, NY
 
 
Posts: 64 since Jul 2014
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39. I get out of my harem just long enough to click the mouse and wash my Bugatti

Even the most consistent and profitable strategy is on the clock and has a finite life span, those upper levels are not real.

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  #28 (permalink)
LA, ca
 
Experience: Intermediate
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I think I'm at 25-29.

At least I don't have to worry about getting a divorce and a wife taking half of my money

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  #29 (permalink)
Toronto, Canada
 
Experience: Beginner
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Broker: Questrade
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I think I'm around 15-20 but not sure. I only know that I'm past step 14 and haven't quit. I've also realized that it's something that I want to keep doing.

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  #30 (permalink)
Ekaterinburg Russia
 
Experience: Intermediate
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I am at level 19-21. Recently watching the video record of my trades I had the feeling that the success is in me, because nobody else can control the execution. But its not the belief yet, just a feeling.

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  #31 (permalink)
New Zealand
 
 
Posts: 92 since Jun 2013
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Is there a way to skip to #39?

I don't think it is as linear as this. Everyones path is different but nonetheless, an interesting rough step by step process is outlined here.

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  #32 (permalink)
Long Island, New York
 
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Thank you for this

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  #33 (permalink)
Victoria, Australia
 
Experience: Intermediate
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very good list - can recognise myself in there at various stages

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  #34 (permalink)
Bangkok
 
 
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shodson View Post
I think I'm on step 29..

1. We accumulate information--buying books, going to seminars and researching.
2. We begin to trade with our 'new' knowledge.
3. We consistently 'donate' and then realize we may need more knowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our 'updated' knowledge.
7. We get 'beat up' again and begin to lose some of our confidence. Fear starts setting in.
8. We start to listen to 'outside news' & other traders.
9. We go back into the market and continue to donate.
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and continue to donate.
13. We get 'overconfident' & market humbles us.
14. We start to understand that trading success fully is going to take more time and more knowledge then we anticipated.

Most People Will Give up at this Point as they Realize Work is Involved

15. We get serious and start concentrating on learning a 'real' methodology.
16. We trade our methodology with some success, but realize that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute.
20. We add, subtract and modify rules as we see a need to be more proficient with our rules.
21. We go back into the market and continue to donate.We go back into the market and continue to donate.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade we still have a tendency to violate our rips and our results are still erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don't follow them.
30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better.
31. We continue to trade and the market teaches us more and more about ourselves.
32. We master our methodology and trading rules.
33. We begin to consistently make money. We begin to consistently make money.
34. We get a little overconfident and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.
37. We are making more money then we ever dreamed to be possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of


@shodson

Thx for the well wishing listing for newbies.

But with only the 10 Commandments, people like us find it tough to remember them
and diligently follow. So very pitiful indeed, isn't it?

Is it possible to abbreviate it down to bite size for most of us, like....?

1. We accumulate information--buying books, going to seminars and researching.
8. We start but fail and start to listen to 'outside news' & other traders.
13. Now get 'overconfident' & market humbles us.
14. We start to understand that trading profitably is going to take more time and more knowledge then we anticipated.

Most People Will Give up at this Point as they Realize Work is Involved

15. We get serious and start concentrating on learning a 'real' holy grail.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
29. We now see the importance of following our rules as we see the results of our trades when we don't follow them.
30. We begin to see that our lack of success is within us
(a lack of discipline in following the rules because of some kind of fear) and
we begin to work on knowing ourselves better.
36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful)

NOW for better or for worse, there are now only 9 very general trading behaviors
for those wishing to be more consistently profitable to eschew.

More profitable trading experiences everyone. Thx Shodson.

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  #35 (permalink)
Western Slope+Colorado/USA
 
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deaddog View Post
I looked for a mentor when I first started. All I found were people wanting to sell me systems. I had one guy who was only going to charge me a daily rate. Set me up with software so he could direct me in real time how to trade ES. Day one we broke even and when I asked how much he made trading he said he didn’t trade. End of relationship.

You shouldn’t expect a mentor to show you a method. You should expect a mentor to guide you through the process of finding and developing a system that suites you. Too many people are looking to copy a method that may not be appropriate for them.

I love this!!! You would not believe how many "mentors" actually do not trade! They sell the fantasy of being able to successfully earn a living from the markets, but in actuality do not do it themselves!

...................your story sounds about like the road I went down

“Success is a journey, not a destination. The doing is often more important than the outcome.”
-Arthur Ashe
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  #36 (permalink)
Market Wizard
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DropD View Post

...................your story sounds about like the road I went down

Did you find a Mentor or did you finally figure it our for yourself?

"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
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  #37 (permalink)
Western Slope+Colorado/USA
 
Experience: Beginner
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deaddog View Post
Did you find a Mentor or did you finally figure it our for yourself?

I'm still on the journey.............I realized that a mentor really can't do much for me. I know I'll have to make it on my own. I am finding that Van Tharp's stuff is exceptional.

“Success is a journey, not a destination. The doing is often more important than the outcome.”
-Arthur Ashe
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  #38 (permalink)
Market Wizard
Prince George BC Canada
 
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DropD View Post
I'm still on the journey.............I realized that a mentor really can't do much for me. I know I'll have to make it on my own. I am finding that Van Tharp's stuff is exceptional.

Take a look at Mark Douglas Books.

"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
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  #39 (permalink)
Western Slope+Colorado/USA
 
Experience: Beginner
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deaddog View Post
Take a look at Mark Douglas Books.

I'll check him out, thanks! What I'm really working on right now is my overall business plan for trading and my objectives going forward. I know that a trading system is just a small piece to the puzzle and the bigger picture is where my focus should currently be.

“Success is a journey, not a destination. The doing is often more important than the outcome.”
-Arthur Ashe
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  #40 (permalink)
Brooklyn, NY
 
Experience: Advanced
Trading: CL, ES
 
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shodson View Post
I think I'm on step 29..

1. We accumulate information--buying books, going to seminars and researching.
2. We begin to trade with our 'new' knowledge.
3. We consistently 'donate' and then realize we may need more knowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our 'updated' knowledge.
7. We get 'beat up' again and begin to lose some of our confidence. Fear starts setting in.
8. We start to listen to 'outside news' & other traders.
9. We go back into the market and continue to donate.
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and continue to donate.
13. We get 'overconfident' & market humbles us.
14. We start to understand that trading success fully is going to take more time and more knowledge then we anticipated.

Most People Will Give up at this Point as they Realize Work is Involved

15. We get serious and start concentrating on learning a 'real' methodology.
16. We trade our methodology with some success, but realize that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute.
20. We add, subtract and modify rules as we see a need to be more proficient with our rules.
21. We go back into the market and continue to donate.We go back into the market and continue to donate.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade we still have a tendency to violate our rips and our results are still erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don't follow them.
30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better.
31. We continue to trade and the market teaches us more and more about ourselves.
32. We master our methodology and trading rules.
33. We begin to consistently make money.
34. We get a little overconfident and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.
37. We are making more money then we ever dreamed to be possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of


This BTW, is a list created at Commodities Corporation which produced:

Paul Tudor Jones, founder of Tudor Investment Corporation
Louis Bacon, founder of Moore Capital Management
Bruce Kovner, founder of Caxton Associates
Michael Marcus, a leading commodities and currency trader
Jack D. Schwager, an author on financial topics and hedge fund manager
Ed Seykota, a computer scientist, technical trader and pioneer in System Trading
Peter Brandt, commodity trader extraordinaire.

So you know, this was put together by some serious traders who knew what they were talking about.
I have moved up almost every step on this list in my 10 years of full time trading and glad to say I am at #35 touching #36 most days.

For anyone struggling out there: keep your trading simple, keep your losses small, don't get attached to your trading results, and this business takes time and patience. Give it 5 years at least if you are trading without a mentor to get your bearings right. Sorry, it is a tough business.

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  #41 (permalink)
Brooklyn, NY
 
Experience: Advanced
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Here is another list of a trader's journey until reaching consistency. Where are you on this list?

Stage One: The Clueless Trader

1) Heard of a day trader making millions, or buying options is safe and can make you rich quickly
2) Got lucky in an earlier stock investment.
3) After all, how hard can it be? The money sounds appealing and the freedom to be independent sounds attractive
4) Every trader is optimistic
5) You open a direct access brokerage account and the sound of Level II, ask/bid, and market makers make trading sound like hi-tech video game
6) You will buy just to see the market reverse and you will short just as the market starts to rally.
7) Most of your trades are done emotionally. You buy just because the markets feel strong without any logical reason
8) You have no clue how the mechanics and psychology of trading works. What's worse? You are not aware that you don't know
9) Most traders will blow their entire account at this stage.
10) Mostly you start your trading in a bull market
11) You will spend more time finding a broker charging least brokerage, how to save tax, and like companies paying dividend and issuing splits and bonuses and less time in learning what trading actually is.
12) A big majority of people will leave trading and blame the randomness of markets, or say markets are always manipulated
13) Generally you start with fundamental analysis and put money in "good" companies and don’t forget to watch CNBC
14) You don’t know what is short selling or have never tried it, no idea of stop loss as well
15) You are in the unconscious incompetence stage, in this stage your capital is at maximum risk


Stage Two: The Rookie Trader

1) In this stage you have lost enough money to realize what you are doing is completely wrong. In other words, you start to realize that you don't know.
2) You will then devour every trading book available.
3) Your search for magic indicator and the holy grail starts here
4) You will memorize every technical pattern known to man. You will read about the ADX, moving averages, Fibonacci lines, pivot points, MACD, Bollinger Bands, channels, etc
5) You will go through the "help" tab on your data vendor to read about every single technical indicator available
6) You will plot them on your charts and spend hours looking for an indicator that works
7) You will be extra confident now, thinking you have found the magical technical indicator
8) Yet, you still continue to lose money everyday. You realize that your indicators are lagging and that every other new trader is probably looking at the same thing.
9) You realize that you are the sucker
10) You are in the conscious incompetence stage


Stage Three: The Developing Trader

1) You start to realize the amount of work required and the immense learning curve that you must overcome to understand the markets, maximum pessimism is experienced here
2) At this point, traders may find it overwhelming and quit. Stronger minded traders will push their motivation harder to start their second spurt for knowledge
3) Hunger and passion is needed to clear this stage
4) You will ask a thousand questions and bug every professional trader you meet. You will read a thousand trading articles
5) You will start paper trading, develop strategies and setups, and define risk parameters for every trade
6) You will go on a hunt for self-understanding to master your psychological game
7) You will visualize every possibility on a trade before you take it.
8) This is the true learning phase. You are trying hard to develop your edge in trading.


Stage Four: The Determined Trader

1) This is the stage in which you learn to specialize in certain markets and trading methods
2) Without realizing it, you have finally found your style of trading after hours of hard work and research. You stick to your method and you improve it
3) You realize that you need an edge whether its tape reading, price action or being a Fibonacci expert. The important thing is you are slowly transforming yourself into a specialized trader
4) You test your methods and they seem to work. You gain tremendous market knowledge.
5) You reflect back on yourself and you can't help but laugh at your foolishness.
6) Although you have not made enough money to call yourself successful you are proud of your journey and accomplishments
7) You realize that the Holy Grail is not about technical indicators or price patterns
8) You calculate risk before profits and place strict money management on all your trades.
9) You cut losses short and learn to scale out on your winners.
10) You start accept losing as a natural part of the game
11) You take high probability trades that you have tested and feel confident about your setups because you understand that trading is a game of probabilities
12) Your psychological makeup has changed from an amateur mindset to a professional one.

Stage Five: The Consistent Trader

1) You rely on your trading method and start taking trades systematically. You try to aim for consistency and are meeting your daily goals often.
2) You are fully aware of your strengths and weaknesses as a trader.
3) At times you feel euphoric and at times you feel pain. But you are able to understand your own psychological makeup to control your emotional swings.
4) You are now able to trade for a living
5) You have reached the conscious competence stage

Stage Six: The Expert Trader

1) In this final stage, you completely understand the markets you are trading. Being involved in it everyday you are aware of every key price level
2) You understand market concept and are able to predict the direction of the markets a fairly good amount of time.
3) You pat yourself on your back and take profits as soon as you feel euphoric. You do this because you understand euphoria is the same as emotional trading.
4) You talk to other traders and realize the development stage they are in
5) People start asking you for trading advice, you publish a book, and you have a specific trading methodology that represents you!
6) Taking trades come naturally and you are able to get in and out at the precise price levels based on price action.
7) Instead of having the markets take your stop out, you exit when you know you are wrong.
8) You keep your head high but remain humble on the inside. You have now officially graduated the school of the hard knocks
9) You have reached the unconscious competence stage. You are a successful professional trader now.

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  #42 (permalink)
Sumy, Ukraine
 
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One of the best post on this site. I think about it from time to time. I'm on 30. We begin to see that our lack of success is within us
I got a good method with pretty good live results but I straggle with execution. An anxiety my oldest enemy. It's like a fear of public speaking in school you know.
I still have a lot work to do

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