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
The following 84 users say Thank You to shodson for this post:
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.
The following 3 users say Thank You to Barrosco for this post:
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.
The following 3 users say Thank You to solom113 for this post:
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.
The following 3 users say Thank You to gabga100 for this post:
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.
The following 6 users say Thank You to Fat Tails for this post:
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.
The following 3 users say Thank You to gabga100 for this post:
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
The following 3 users say Thank You to Scalpingtrader for this 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.
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
The following 6 users say Thank You to deaddog for this post:
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.
The following user says Thank You to teamtc247 for this post:
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.
The following user says Thank You to ZarethKnyght for this post:
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.
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.
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
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
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
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.
The following 6 users say Thank You to Crude Man for this post:
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.
The following 6 users say Thank You to Crude Man for this post:
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
The following user says Thank You to AlexSobol for this post:
