Evolution Of A Trader
Post By: Renzo Bazargani
Checklist Format
Accumulate information - buying books, going to seminars, researching
Begin to trade with “new” knowledge
Consistently lose money and realize the need for more knowledge & information
Then accumulate more information
Switch the markets currently following
Go back into the market and trade with “updated” knowledge
Get “beat up” again and begin to lose some confidence. Fear starts to set in
Begin to listen to “outside news” and to other traders
Go back into the market and continue to lose
Switch markets again and search for more information
Go back into the market and start to see a little progress
Get over-confident and the market humbles once again
Begin to understand that trading successfully will take more time and more knowledge than anticipated
MOST PEOPLE WILL GIVE UP AT THIS POINT AS THEY REALIZE MORE WORK IS REQUIRED
Get serious and take courses with professional traders
Start concentrating on learning a “real” methodology
Go back into the market and trade the methodology with some success, but realize something is missing
Begin to understand the need for having rules to apply the methodology
Spend time to develop the trading rules and modify the methodology along the way
Begin to trade on a SIM account to test “updated” methodology and trading rules
Start trading again with the rules and find some success, but overall still hesitate when it comes to execution
Continue to add, substract and modify trading rules
Begin to feel being close to that threshold of successful trading
Start to take responsibility for the trading results by understanding that success is from within, not the methodology
Continue to trade and become more proficient with the methodology and rules
Still have a tendency to violate the rules and results are quite erratic
Research further the trading rules and continue to feel being closer to breakthrough
Build confidence in the trading rules and go back to trading the market
The results get better, but still hesitate in executing the rules
Begin to understand the importance of following the trading rules by seeing the results of the trades when not following the rules
Realizing more that the lack of success is from within (a lack of discipline in following the rules because of some kind of fear) and begin to work on knowing oneself better
Continue to trade and the market teaches more and more about oneself
Begin to master the methodology and the trading rules
Begin to consistently make money
Get over-confident and the market further humbles
Continue to learn the lessons and become more disciplined
Begin to stop thinking and allow the trading rules to trade for you (trading becomes boring, but successful)
Develop consistency and the trading account continues to grow by increasing the contract size or the number of shares
Now making more money than ever dreamed possible
NOTE: It takes at least a minimum of ~10 years to become an ´expert´ in anything (whether it´s an athlete, a doctor or entrepreneur) - Successful trading is no different
Also, check out The Psychology of Trading, which is a very important topic - mindset is everything!
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Beautiful article.
You absolutely nailed it, Renzo!