38 steps to becoming a trader

Discussion in 'Words of Wisdom' started by CreditViolet, Aug 30, 2004.

  1. CreditViolet

    CreditViolet Guest

    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 it comes time to
    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
    trader


    regards
    creditviolet
     
    BIJU ABRAHAM, bindo, ayyoob and 30 others like this.
  2. TATrader

    TATrader Moderator

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    Excellent write up!

    I am sure traders can spot their trials and tribulation as they read through the list.

    Still working on myself - "discipline"
     
  3. psmkramesh

    psmkramesh New Member

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    very good and strictly to follow our own methodology
    K.RAMESH
     
  4. ashkbag

    ashkbag Guest

    very nice
     
  5. stpmds

    stpmds Member

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    i attended a small 5 days course on intraday trading.
    the faculty at the end of the course had a personal one to one chat.
    he told me that i should strictly follow the rules as mentioned below.

    1.go for highly traded scrips. look at the volume.
    2.dont touch high value scrips. stick to rs.80 to 150 values.
    3.dont deal more than 5 to 10 buy/sell at a time.
    4.target to earn enough to earn a little profit after covering the brokerage.
    5.always protect your investment by applying 'stop loss'
    6.consider the next 2 to 3 years as a learning period.
    7.remember the saying 'trend is your friend'
    8.try to understand all the aspects of the trading software.
    9.dont trade in the last 30 mins of the trading time.
     
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  6. CreditViolet

    CreditViolet Guest

    Hello stpmds
    Just want to add a few things to the quotes by the faculty u mentioned.They are generally good but to point out a few things
    Point wise
    1.The most traded counters like sail or satyam are chased by the best traders so the second rung after them are more qualified for day trading.Beyond volume,intraday volatility should also be monitored

    2.I quite didnt understand point 2,why not trade stocks say of 10 or 25 rs in value.Whats wrong with that.Infact if you dont consider the pump and dump penny stocks ,those within these ranges are very good candidates for day trading as the moves are much larger in percentage terms

    3.5 to 10 is too much.4 to 6 round trades are the benchmark,beyond that is overtrading i think.

    4.Breaking even must be embraced in trading

    6.Consider your whole trading career as a learning period

    9.The last hour is the second best time to trade imo.The most explosive moves occur during that period.Did your facult why not to trade during the last hour.I cant figure out that one.The lunchhour is the deadzone without too much volumes imo,thats the time not to trade.Also the first 10 mins during the market openings.
     
  7. Traderji

    Traderji Super Moderator

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    I agree with this point. I think the last one hour is the most important time for any trader.
     
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  8. veneet

    veneet Member

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    dear friends,
    journey 2 bocome a successful trader is very difficult than it looks like.
    being daytrading from last 1-1/2 years, i findout, taking full responsibilty of all your winning and lossing trades will bring a sense of maturity.
    market is always right...
    findout what u did wrong.

    veneet
     
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  9. pervezhameed

    pervezhameed New Member

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    Very beautifully said. It is my history, and I am following it to the T. If last hour is the second best time to trade, then, which is the best?
     
  10. bojjasivakumar

    bojjasivakumar New Member

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    seetharamank and revo like this.

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