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The 4 stages of becoming a trader. Where are you in the journey?

by Osikani 1 Comment

Stage 1: Usually this happens in the very first trade; sometimes in quite a nice winning streak of the first few trades. The trade(s) are very successful, and the novice trader thinks he is a genius. He starts figuring how long it will take to buy the new car, the boat, build the new house etc.

Stage 2: The genius disappears, and as the losses mount, the trader adds more and more new indicators. Every one seems to be magic on the charts, until traded live. This soon turns into the search for the Holy Grail. “If I just have enough indicators, I will make perfect decisions.” It is not unknown for the trader to have so many indicators on the chart, that he cannot see the price bars/candles.

Stage 3: The losses still mount, and if the account is not blown out, the trader trades in abject fear, always afraid to squeeze the trigger; afraid that he will make a loss. Usually, squeezing the trigger is followed by extreme trepidation, and a quick exit if the market makes any slight move that reduces a tiny profit. On the other hand, if the market immediately goes against the trader, he hangs on smoking hopium, that the trade will come back. He hangs on until the loss is so big that he becomes numb to the loss.

Stage 4: The trader has found his niche by whatever means. The trader knows that some of his trades WILL lose money, and the trader just accepts that as part of the process, and confidently takes all trades that meet his criteria, however tight or loose.

Tell us in the comments, what stage you are at. Happy trading.

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Posted in: Articles Tagged: hopium, journey, stages
← Trading with Expectation/Expected Value – Part 2a: My reward to risk is always 3:1. Why am I still losing?
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