In Forex, it’s a general rule that you should go through stages of development to achieve the perfect state. It can be long and painful but each stage is necessary to attain your much-desired success level. In this article, we discuss the 3 levels of a Forex trader.
For a start, here’s an infographic that briefly details the process that traders go through in each level:
LEVEL 1: THE BEGINNER TRADER
The journey to the wild jungle of Forex trading begins.
The most successful Forex traders today started in studying and understanding the basic concept of trading.
At this level, you learn that you should choose a trading methodology that fits your personality. Learning what methodology fits you requires a series of testing to ensure that it’s reliable and can be an edge for you.
In addition, traders at the beginner level use the aid of a demo account to have a feel of the market without any financial risk. With no real previous trading experience, simulation is the best way to test your risk tolerance.
Never be in a hurry to test your luck and throw your money on the floor without equipping yourself with the basic knowledge and skill.
LEVEL 2: THE SKILLED TRADER
At the skilled trader level, you gain a conscious competence which can lead you to more necessary developments. Slowly but surely, you can now blend a good analysis with effective implementation. Also, at this level, different trading attitudes are being honed and disciplined.
Patience, objectivity, realistic expectation and discipline are now considered an asset. Realization sinks in that these aspects can either bring in the money or throw the money away.
Risk management is now highly valued. You realize that to keep yourself from sliding off, you must efficiently manage the possible risks that may come along the way. Furthermore, you evaluate your trading system and make necessary adjustments.
As a skilled trader, you can now clearly distinguish the difference between emotional trading and educated trading.
LEVEL 3: THE EXPERT TRADER
Reading a chart is now as easy as reading the morning newspaper at this level. The once complicated technical charts can now be easily understood. The trader, who started as a nervous trader, is now a very confident one. The conscious competence has now evolved into an unconscious competence – the trader’s competent mode is now automatic.
When you achieved this level, you can execute profitable trades without any emotions and achieve consistent financial returns. You realize that attaining the expert level is far more important than gaining big profits right away.
You can stay at the beginner’s level, but it won’t open any opportunity. Sitting at the skilled level forever is manageable, but it won’t bring you that far. But achieving the expert level can bring you to the height of success. The long process can be intimidating and demotivating, but it’ll surely be a worthwhile pursuit once you see the fruit of your hard work.
Also read: Top 3 Forex Charts for Trading