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Thread: Learning curve

  1. #1
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    Learning curve

    Before starting making bunch of money trading Forex, it's very useful to honestly recognize your place on learning curve.

    Let me explain.

    It's very easy to think that "now you are ready to make it" after series of profits.

    But consistency is what makes professional trader (I mean, who made trading his occupation). How to recognize - are you ready or not?

    I would divide development of a trader on several phases (well, don't get offended if you recognized yourself :) )
    The more honest you are with yourself, the faster you can go through all that phases.


    1. Beginner.


    You have come to the market and try making your first trades. Something works, something doesn't, but you enjoy the process, and after getting good profit you blow up your account. You never suspect that risk you have taken was enormous. You think that your "method" what inperfect.

    This traumatic experience leads you to a level of "advanced beginner".


    2. Advanced beginner


    Now you understand that you don't have a method and start "learning".

    Well, many people are stuck in this level, because there are lots of books and websites out there, huh.

    You face tons of conflicting information, you try to structure it reading more. You begin absorbing information, the more you dive into that sea the more you lack understanding - how to trade to make money?

    Most novices search for a "solution" - they believe that solution exists "somewhere", that somebody has "foolproof trading method", this is really time of trial and error.

    When you finally understand that market itself has uncertainty and ambiguity in it's nature, you understand that analysis and trading theory is not as important as risk management and good trading habits.
    You recognize limitations of all theories.

    Once you've recognize it, you go to the next level - I call it "struggling trader"


    3. Struggling trader


    Struggling trader no longer searches for a holy grail, but he (she) drifts between one trading style to another.
    He doesn't know what to stop on, but he already keeps his losses short, he understands importance of capital management and no longer falls into deep drawdown.

    Lack of consistency leads to chaotic drift of equity - he earns money, than gives it back to the market, than again makes up his mind and finds good trades and earns money again.

    I would say, trader CAN already earn money in this phase, but he can't keep it. All that market understanding that he gained through the years, pushes him to overtrade.

    Struggling trader recognises that he lacks discipline.



    4. Average good trader.


    What average good trader really does - he knows how to learn trading and that makes him who he is.

    He accepted 100% responsibility for his trading and there is fundamental difference between struggling trader and average good trader. While struggling trader relies on the market, he follows the market, but he rarely thinks of his actions, attention of average good trader focuses more on his actions.

    He already knows limitation of all theories, he knows importance on money management, he recongnizes importance of consistency.

    He keeps a journal, re-evaluates - what he does well, what not, what to work on, what to keep as it is, real work starts in this point.

    Also, average good trader works on his psychology and self awareness that makes him more disciplined.
    He studies the market, collaborate with traders but already knows that his action and opinion is what matters.

    Right focus of this phase eliminates a lot of mistakes, bad trades and finally allows trader to earn and keep money.

    I would say, this is a transformational phase. A lot of work to do, but it's like planting a tree - in needs time to grow.
    This is sort of personal growth. When we choose our reaction, when we refocus our attention and take responsibility for our actions, we grow personally and professionally, especially in trading.


    5. Master trader


    I would say, there are not so many traders that reach this point.

    At this point, trader knows himself and the market. He executes trades intuitively and as he knows his strengths and weaknesses, he can be more aggressive with what he does well, and defensive in other situations. Of course, it ends up with increased profitabilty and equity curve of a master trader can contain many winning streaks.

    Master trader focuses his attention right, thanks to the work done on the previous phase.

    I would say, "the tree had grown".



    Bottom line:


    It's important to recognize your place on the learning curve. Some people can't take responsibilty for their actions and accept that trading is a hard work, that's why they never come to the "average good trader" point.

    So, decide for yourself - where are you on this curve?

    The more honest you are, the closer you get to the destination. Yes, it takes time to develop and can't be done overnight. Do that work or quit!

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    Last edited by Value trader; 08-08-2013 at 08:03 PM.

  2. #2461
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    Learning is what it takes to get successful, learning has a lot of effects when the trader has been able to know the demo account and then know what the demo account will make them sustain, from all what I have seen in the business, I have been able to have seen that the learning which I did one the demo account was able to add more to making me sustain my account and be profitable enough.

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  3. #2462
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    I am no well experience in the curve one.I am well know how to reach the stage of third curve,it is best for the small traders who started our trading, i think every traders want to find the big profit , i also focus very less because in many of the activities i am not working but learn some focus.

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  4. #2463
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    A trader always have need to focus on his learning journey. because learning is very important in forex market.
    Learning giving us patients and a lot of knowledge to control emotions and try to do trade with proper money management.
    We can done it when we have proper emotions Control techniques.

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  5. #2464
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    Learning is all what we need in the business. With the right amount of learning and also exposure to the market demo account gets to make us more better. Because learning never ends. If we want to learn and become profitable, I will suggest that we also make sure to take down the experience that we have obtained from the practice we have made, the more experience we have taken into Journal, then the more we can improve and learn more.

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  6. #2465
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    This is a business where traders need to stand on a strong foundation where they stand to build the business. If we wish to succeed then we need to never stop learning things in here. Learning about forex is very hard indeed and it is certainly not the only way to success as well. Keep in mind that learning forex gives room for success and this success can be a life changer.

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    Quote Originally Posted by Risk management View Post
    A trader always have need to focus on his learning journey. because learning is very important in forex market.
    Learning giving us patients and a lot of knowledge to control emotions and try to do trade with proper money management.
    We can done it when we have proper emotions Control techniques.
    That is right. The trader needs to learn how to trade the market and the learning should be known as an endless thing. You just need to be patient with the market and also get to know that there will be no fast way of making money in the market. Learning curve in a nutshell will be made easier when the trader also takes journal and also isn't in a rush to make money from the market.

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  8. #2467
    Registered user cutiekc's Avatar
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    If the trader can get to be disciplined with the market. I am sure that the trader will be able to have good success in the business. One factor that has always made traders to not be able to become profitable is that, they don't have the discipline to be focused on one trading method, because the more the trader is been focused on one trading method, then the trader will for sure be able to follow the market consistently and use their experience to improve on how they trade.

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  9. #2468
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    Quote Originally Posted by cutiekc View Post
    If the trader can get to be disciplined with the market. I am sure that the trader will be able to have good success in the business. One factor that has always made traders to not be able to become profitable is that, they don't have the discipline to be focused on one trading method, because the more the trader is been focused on one trading method, then the trader will for sure be able to follow the market consistently and use their experience to improve on how they trade.
    Many retail traders dont have discipline and that is the reason they face severre drawdowns and margin calls which make them repulsive. Professional trader is expected to earn in the Forex market consistently every month by not facing severe drawdowns on his account. Further everyone have to invest time and efforts in learning to become successful in Forex.

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  10. #2469
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    Quote Originally Posted by AmitChallenger View Post
    Many retail traders dont have discipline and that is the reason they face severre drawdowns and margin calls which make them repulsive. Professional trader is expected to earn in the Forex market consistently every month by not facing severe drawdowns on his account. Further everyone have to invest time and efforts in learning to become successful in Forex.
    That is true and when I have come to think about it, I just think that it is because they are trading with little amount of money. Therefore they have that urge that they want to make a lot of money from those little amount of money, whereas being the reason why they get to still loss their money. If the new traders had invested with good amount of money and then also have other jobs that they are doing, then they can handle the business correctly.

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  11. #2470
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    Quote Originally Posted by Darkhorse View Post
    That is true and when I have come to think about it, I just think that it is because they are trading with little amount of money. Therefore they have that urge that they want to make a lot of money from those little amount of money, whereas being the reason why they get to still loss their money. If the new traders had invested with good amount of money and then also have other jobs that they are doing, then they can handle the business correctly.
    Little money surely drives the trader to take higher risks. But what I believe is you can invest based on your capacity and no matter how much you invest, you use it wisely. Earning consistent profits in Forex is a great thing and first you should be able to do it on demo and then you have good chances on real too. Practice helps to improve analysis and find better way of using stop loss.

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