When you take the first steps onto the trading ladder you could be forgiven for believing it’s a very straight forward process; open an account>trade>make money>learn>make a few mistakes>trade>make money>learn>make a few mistakes…one thing most traders can agree on is that trading is not what we expected it would be at the outset of our journey.
Unfortunately for the vast majority learning how to become proficient and profitable is not a straightforward journey. The blind alleys, the crossroads, the forks in the road, the red lights, the roadworks, the speed traps..there are many appropriate metaphors and analogies we can use to describe the events on the roadmap of self discovery, events we have to re-navigate in certain instances.
This list describing our shared journey and experience is a recently re-discovered gem. Honestly appraising where you are on the list can be a sobering experience. Undoubtedly as you read on you’ll recognise milestones you’ve passed, or are approaching. The gap between fourteen and fifteen is perhaps the most prescient point as it represents the time when most traders simply give up. The journey is never streamlined, you may not complete it in an orderly fashion, you may ‘jump’ certain milestones.
It takes more than; blind faith in your own ability, determination, or never say die attitude to progress beyond this potentially terminal fork in the road. Intuitively you must recognise whether or not you have developed and matured as an individual, mentally and psychologically the improvement should be self evident, if not perhaps time out from trading is the best course of action.
To become proficient and profitable at trading could take up to two years of full time dedication, trading part time this time limit could easily be doubled. Therefore taking a break from trading at an opportune time, whilst continuing to research, is a good course of action in order to recover your own personal equilibrium.
Once again this list should remind us that simply having a strategy to mechanical execute time after time represents only a small part of the complexities involved in order to become consistently profitable, sound money management and a strong psyche arguably rank higher. The fact that the steps from fifteen onwards concentrate more on this aspect of psyche and discipline illustrate what’s required when the trader is in recovery mode and his or her mind is finally fully focused.
38 Steps to Becoming a Forex Trader
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 realise 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’ and to 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 start to see a little progress.
13. We get ‘over-confident’ and the market humbles us.
14. We start to understand that trading successfully is going to take more time and more knowledge than we anticipated.
MOST PEOPLE WILL GIVE UP AT THIS POINT, AS THEY REALISE WORK IS INVOLVED
15. We get serious and start concentrating on learning a ‘real’ methodology.
16. We trade our methodology with some success, but realise 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 over all we still hesitate when we execute.
20. We add, subtract and modify rules as we see a need to be more proficient with our rules.
21. We feel we are very close to crossing that threshold of successful trading.
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 rules 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 the rules.
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 our trading rules.
33. We begin to consistently make money.
34. We get a little over-confident 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 than we ever dreamed possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of.