The life path of the trader (development stage)
Every trader goes long or a short life, which, of course conditionally can be divided into 5 stages of the trader. Trading – a process that brings a lot of money or a big disappointment, so not everyone is able to do to reach the fifth or even the third stage, it needs patience and endurance, plus a lot of nerve. I offer you just such a classification, described once by one experienced practitioner, it reflects the whole life of the trader, with its cyclical periods.
Way trader. Stage №1: Unconscious incompetence
In the first step you start to look closely to the process of trading. You understand that this is a very good way to make money. You think, “this is a convenient and efficient form of income, which will bring me a good profit.” Price moves up and down, what’s the secret – start! Once you take a lot of lots in the hope of short-term profits. As soon as you open a position, the market turns the other way, and you go in the negative, so repeated several times. You are trying to compensate for your losses by doubling each time your trades – sometimes it works, but no more often, and you absent-mindedly. Well, this is the first step – it is absolutely clear that you know nothing about trading. This trader stage lasts a week or two, but the market quickly, and you move on to the second.
Way trader. Stage №2: Conscious incompetence.
At this stage, the trader is aware that forex like playing with fire, and not to burn yourself have much to comprehend. You become aware of their incompetence – you do not have the skills or the insight, to receive a regular income. At this stage, you buy a lot of systems and books, read sites from Russia to Ukraine and start looking for a middle ground. At this stage you pereprobuete many working methods and systems, never pausing enough to notice whether the system is working. Every time a new indicator will appear, you will be delighted, thinking that he will change everything in your favor. You will test the automatic system in the Meta-Trader, will play with the MA, Fibonacci, resistance and support, pivot, fractals, divergence, DMI, ADX, and a hundred other things, hoping deep down that your ‘magic system “will work today! You will catch the rise and fall of prices with their indicators, trying to find the best time of the transaction. You file a scalping and begin to deal with scalping, thinking that this is the most successful strategy. Indeed, many pips and earn profit but still does not come.
You will try to use signs which are used by others, it will not work. You will try to buy signals – they, too, will not work.
This stage is the trader’s path may take a long time. If you have already killed more than one deposit, and maybe throwing this thing several times, then returned again, go to the third stage.
Way trader. Stage №3: Eureka!
The “apple falls on your head,” the beginning of this stage, and you know that the main thing is not a system. You realize that you can make money and two-three basic trend indicators and oscillators, but only if you keep yourself in the hands and you have the correct money management. Until you reach that forex trading is very important psychological aspect. Forex for people with strong nerves and a cool head. And finally comes the enlightenment! You suddenly realize that you do not, the other can not accurately predict anyone, what the market will do in the next 10 seconds, let alone 20 minutes. You begin to work on the same system, you adapt themselves for themselves, become happier and know your “risk threshold”. You begin to trade, if your system shows a good probability of winning. If your position is losing money, you do not worry, because you know about the unpredictability of the market. The main thing to realize that it’s not your fault, but a reality. The next position will have a greater chance of winning, because your simple system works. The main thing to understand that the trading game the most important thing – to follow a disciplined system and make transactions. You will learn the proper money management and shoulder, and only now you realize the truth of those who give you advice in the past. Eureka comes that moment when you honestly say that you can not predict the market.
Way trader. Step №4: Conscious Competence.
Ok now you are making a transaction, when your system tells you to do so.
You take the loss as easy as winnings. You will surely put the take profit and stop loss, the latter works less and less, and allow to get a warrant to the most advantageous position. There comes a stage when your score ranges from a constant level, day after day. There are times when you are in the black at 100 pips and the red at 100. In other words hold the balance and not lose money. Gradually you are increasingly close of profitable positions. If you give pips, then you know that they go back. It lasts for several months.
Last stage of the trader: Unconscious Competence
Now, just like driving a car, you are trading a day doing everything on a subconscious level.
You are running on autopilot. You start working on large transactions, you make 100 pips per day, and consider it normal. You control the emotions and you are a trader with a rapidly growing account. When the trade will not be exciting, but the attitude to it will be like to work everyday you can say with certainty: “I – a professional trader!”
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