EXPERIENCE LEVEL
Select one experience level that describes your current level of experience:
1. Master Level
The master has years of experience in the markets and is at an expert level of knowledge and skills. He understands his own beliefs and knows what strengths and weaknesses he has. He trades in accordance with his beliefs, personality, and temperament. He has an intuitive feel of the markets and operates in a controlled, calm, but fluid way, and in the zone. He understands and accepts risk and always operates with risk in mind, but is never paralyzed by it. He is not controlled by emotions such as fear and greed. He trades in total awareness and may at times seem to have a carefree attitude. He consistently weighs the risk-to-reward equation He can adjust his systems to be more profitable in different market cycles and can quickly determine which time frames and markets are best to maintain profitability. In other words, he can go from one winning cycle to another with minimal drawdown between winning cycles and can move
at lightning speed if needed.
The master listens to and understands what the market is saying. He thinks of the market as a friend and enjoys the challenge and the process. He is consistently profitable and represents the top 5 percent of all traders worldwide. Individuals at this level have the skill and experience to earn significant net revenue on a consistent basis. This is the level that most get rich quick advertisements claim you can achieve instantly with little or no capital.
Profit zone: The master is consistently generating 10 percent profit on his account every month over a period of at least 12 months.
2. Intermediate Level
The intermediate trader or investor is moderately profitable on a consistent basis, but emotions still get the best of him. He has developed enough skill
to know what to do to be consistently profitable. He is not nearly as profitable as the master, but consistent enough to acknowledge that success is
possible and realizes how important psychology is.
Personal development is still needed. This is what keeps the intermediate trader or investor from being a master. The whole body is not yet integrated
with the market and the process. He occasionally has days where he feels and performs like a master, but not consistently. He has varying forms of anxiety that cause problems. Besides not being as profitable, the difference between intermediate and the master is abstract. The difference is intangible or nonlinear; it has to do with the art of trading. The traders mind-set is not as developed as the master.
Profit zone: The intermediate trader or investor is generally breaking even consistently or generating a small profit consistently.
3. Novice Level
This category encompasses everyone else who is not making money on a consistent basis for whatever reasonfrom beginners to those who know
it all but still cant make consistent money in the markets. To get out of this category requires work on skills, market knowledge, emotional exploration,
and practice.
It is important to paper-trade until you are consistently profitable. You need live experience during a variety of market conditions to experience drawdown and how it affects your psychology.
When paper-trading is consistently profitable, then and only then trade with real money. Novice traders and investors will remain stuck at this level if they take the easy route of rushing into the markets with real money before they are ready. Diminishing the importance of paper-trading indicates impatience,
compulsive behavior, gambling personality, a get rich quick mentality, and lack of disciplineall of which will keep you stuck at the novice level. You will be unprofitable on a consistent basis until you either acknowledge it is time to change or you give up and say that this is not for you.
Dont forget that every master started at this novice level! The length of time you spend here depends on how well you work on your emotional stability and development.
Profit zone: The novice is consistently losing dollars in his practice paper-trading (or in his live-trading in the market with actual money if he is currently live-trading).
TRADING STYLE
Select one style that describes your current method or style:
1. Trend Style
The trend trader or investor likes to trade with the overall trend regardless of time frame. He uses the Pyramid Trading Point for trend identification,
trade entry, and trade exit and uses ART Reversals to scale out of trends or scale in to a trend trade. He rarely uses a stop and reverse (SAR).
Trends can be found on just about any time frame. Stops are adjusted or trailed just enough so the trader can stay with the trend even during
corrections within the trend (can use trend lines and advanced techniques such as the Elliott Wave, and classic technical analysis).
A day trader could be classified in this category when trend-trading intraday time frames. Trend traders usually are not averse to authority figures,
and they feel comfortable belonging versus being a loner. These tendencies allow for a comfortable fit of going with the crowd of traders in a trend.
2. Scalp Style
Scalpers take quick profits using ART Reversals and minor Pyramid Trading Point trade entries. They use the SAR technique, and may either be long
or short almost all the time while using SARs.
A scalper can be a day trader or position trader and can scalp with a trend or against a trend. Traders who are averse to authority figures tend
to be better scalpers in the market. Scalpers like quick action, and need to be careful not to overtrade. They should also be careful with trading due to
anxiety issues.
3. Countertrend Style
Countertrend traders trade the corrections of an established trend. These traders predominantly use ART Reversals to time their trades and exit the market. They can be day traders or position traders. The countertrend trader usually likes to be a loner and move independently and is averse to authority figures. He usually does not flow with the crowd and therefore tends to feel uncomfortable going with the crowd of traders in a trend.
TRADING FREQUENCY
(Select one trading frequency that describes your current time frame or frequency of trades):
1. Day Trader
The classic day trader opens and closes all his trades when the market is open during the trading period and does not hold positions overnight. Day traders usually use 1-minute to 5-minute charts. They can either use scalping techniques or be intraday trend traders.
There are three main reasons why day trading should be attempted by master traders rather than novice traders:
When day trading, trading time is compressed. Losses and wins come at you faster and more often, which requires a mature, developed trading
psychology.
You must have the psychology to resist being seduced by the open marketyou must remain emotionless and objective.
Your day-trading results can be highly impacted by others trading on higher time frames; the lower your time frame, the greater the effect this will have on you.
2. Position Trader
These traders usually use daily charts, weekly charts, and 60-minuteinterval charts to base their trading decisions on. Primarily trend traders, position traders hold positions until the trend is exhausted, and thereforethey may hold a position for a few days, a few weeks, or even a few months if the trend can be maintained.
3. Investor
Investors are traders when they attempt to time their long-term investments. They study fundamentals and combine this with technical analysis. Investors are long-term trend traders using weekly, monthly, and yearly charts. They can deal with minor losses but are less comfortable with active trading, where losses can come quickly and frequently during drawdown.
Now, identify your Profile and adopt your trading style. As you grow and gain experience in trading change in style and frequency naturally occurs.
1. If You are a novice, follow trend style and position/investor frequency.
2. If You fall in Intermediate, follow Countertrend style for Positional frequency and follow scalping for Day Trading frequency.
3. If You are a Master, you can follow any. But Masters usually follow countertrend style for Day Trading and follow Trend style for Positions.
Happy Trading
