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Mysticforex

38 Steps to Becoming a Trader

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I didn't see this posted here anywhere so I thought I would. The " I Look Back Now " thread inspired me. I read this several years ago in a commodities magazine, I have also seen it around on the web:

 

 

38 steps to becoming a trader

 

They are as follows:

 

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.

 

Most traders will identify with this list and should be able to place themselves within these steps. Keep in mind that very few people progress through these steps in an orderly fashion. Developing your trading skills is an iterative process. For example, you may reach Step 13., find that although you were making money, your basic premise for trading was flawed (you might have been benefiting from the bull market, rather than your own trading prowess and then have been rudely awakened when the market entered a bear phase) and you may drop back to Step 4. and start 'climbing' the steps again. Having the proper mindset, attitude and psychological makeup becomes increasingly important as you progress through the steps. The focus

of the earlier steps is on external issues, i.e. developing proficiency in the mechanics of trading while the focus of the latter steps (particularly from Step 30, on) is on internal issues, i.e. improving ourselves mentally and psychologically, maturing as

traders.

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24. As we trade we still have a tendency to violate our rules and our results are still erratic.

24.5 We swear at the "top of our lungs", and want to break all our computer equipment.

25. We know we are close.

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I'm new to trading. I've read a couple of books like Mastering the Trade. I haven't set up a trading account yet but I have been doing a lot of research. I was wondering if anyone had any suggestions on what books to read that are worth it.

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I'm new to trading. I've read a couple of books like Mastering the Trade. I haven't set up a trading account yet but I have been doing a lot of research. I was wondering if anyone had any suggestions on what books to read that are worth it.

 

Hi winchie,

You don't mention what type of trader you are, or plan to become.

There are many good books out there. For technical analysis, I keep a copy of

"Technical Analysis of Stock Trends" by Edwards and Magee on my desk. It's not a read thru kind of book, but a great reference book. Although the word "Stock" is in the tittle, TA is TA, and can be applied to anything you can put on a chart. From there you can look for something more subject specific, VSA, Candlesticks, etc.

 

For Motivation and Psychology, I like, "Market Wizards", "Trading in The Zone", and Millionaire Traders". Surely others will chime in with their thoughts.

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I'm new to trading. I've read a couple of books like Mastering the Trade. I haven't set up a trading account yet but I have been doing a lot of research. I was wondering if anyone had any suggestions on what books to read that are worth it.

 

Reminiscences of a Stock Operator & Mastering the Trade and Pit Bull are my top three trading books of all time especially for new traders. I have more listed over at as well.

Edited by Mysticforex

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this is so funny! i never did all of those and so far doing good. so does that mean I might end up cutting my fingers too when I lose? It is all about risk management and controlling your emotions.

 

I'd be interested to hear what things have worked for you in your trading Shauna. Do you have a background that is condusive to trading, maybe a non-traditional path?

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I'm new to trading. I've read a couple of books like Mastering the Trade. I haven't set up a trading account yet but I have been doing a lot of research. I was wondering if anyone had any suggestions on what books to read that are worth it.

 

Check out the thread "Must Read List"...

Lot's of good stuff there.

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24. As we trade we still have a tendency to violate our rules and our results are still erratic.

24.5 We swear at the "top of our lungs", and want to break all our computer equipment.

25. We know we are close.

 

What can I say... I lol'd.:)

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Reminiscences of a Stock Operator & Mastering the Trade and Pit Bull are my top three trading books of all time especially for new traders. I have more listed over at as well.

 

I loved "Reminiscences of a Stock Operator". Just picked up "Pit Bull", probably start that in a day or two.

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Allow me to add 3 additional steps"

 

39. Learn to trade new school - with a winner's strategy, system, rules, and execution skills.

40. Learn, gain competence trading new school - with an activley trading coach (just like world-class athletes with their coach)

41. Only trade with winners - in a trading room, again, with your coach by your side.

 

John

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Beware of people promoting themselves who struggle to manage that basic element of quality: spelling the fucking words correctly.

 

Rande's the same; if they don't present well at the most basic level don't you think it might be stupid to pay them for coaching?

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Allow me to add 3 additional steps"

 

39. Learn to trade new school - with a winner's strategy, system, rules, and execution skills.

40. Learn, gain competence trading new school - with an activley trading coach (just like world-class athletes with their coach)

41. Only trade with winners - in a trading room, again, with your coach by your side.

 

John

 

LOL. Get out of here.

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...

 

38 steps to becoming a trader

....

 

 

above all, you need:

 

1. a trading buddy.

2. a mentor,

 

both are important in your development

both are instrumental in your success

both are difficult to come by

not because they are not out there,

not because nobody is willing,

but because trading is such a generic term,

it encompassing a wide range of activities.

trading could mean 3 trades per minute, or

trading could mean 2 trades per month, or

anything in between.

different instruments, frequency, expectations, risk tolerance, analytical method, also define the traders differently.

 

therefore looking for a buddy/mentor is a trip in self-understanding and SELF-DEFINITION.

 

We are so lucky because we are living in the internet age,

it makes the job of searching for a buddy/mentor that much easier than the previous generation.

 

here are my suggestions to find your "mate":

 

1. post your thoughts often, let the people know you, your thought orientation, your trading style

2. ask questions often, see who is willing to share, and see what they can share

 

3. DO NOT engage a paid mentor.

not because mentors do not worth money,

not because mentors do not deserve to be paid,

but because there are lots of snake oil salesmen out there.

if you don't know how to trade, you don't know how to discern a fake from a gem.

so my advice is -- don't pay.

secondly, some of you might be surprised, there are lots of successful traders out that who are willing to share, to teach, and to help.

but you have to push the right button to get them to talk.

a good mentor can tell if you are sincere

a good mentor will not waste time on gamblers, get rich quick lazy bums. or undisciplined brats.

 

... more later.

 

good luck

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As usual TAMS, right on the money!

 

Over the last few years I have taken on 3 students, never accepting payment.

My goal was to maybe take them just one step in the right direction. To the best of my knowledge I have not been successful. It's frustrating at times, and I think to myself, "why should I bother?"

I "bother" because I believe it's not just about take, take, take all the time. Sometimes you have to give back a little. If I can help one person, I believe my time and effort will have been worthwhile.

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fwiw, I'm pretty sure the OP's list origin was in the book

The Way To Trade by John Piper

Not the worst trading book ever written... hth someone...

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In the book ‘Outliers’ Malcolm Gladwell describes the 10,000-Hour Rule, claiming that the key to success in any cognitively complex field is, to a large extent, a matter of practicing a specific task for a total of around 10,000 hours. 10,000 hours equates to around 4hrs a day for 10 years. For some reason most people that ‘try their hand’ at trading view it as a get rich quick scheme. That in a very short space of time, they will be able to turn $500 into $1 million!

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Gladwell's books are phenomenal. In the book Blink he talks about how traders and military leaders operate under the same mindset and how we use our unconscious or "snap judgments" to make decisions well before we're consciously aware.

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