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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 09:03 PM.

  2. #21
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    it's great to see what and how you have explained. there are a lots of websites as well as e-books are available, which offers a lot of information to the users who are new in trading. however, i personally believe that opening a demo account is the only best choice anyone should prefer, irrespective of his level to even improve his skills.

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  3. #22
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    I feel myself inside the fourth category, sir which is called "average trader". Whenever i am in bad emotion then i make extrame actions, and I have an experience like this ; from first till five orders i gained profit but at six or more i suffered huge lost because of over-confident and involves with emotion.

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  4. #23
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    Quote Originally Posted by topman View Post
    I feel myself inside the fourth category, sir which is called "average trader". Whenever i am in bad emotion then i make extrame actions, and I have an experience like this ; from first till five orders i gained profit but at six or more i suffered huge lost because of over-confident and involves with emotion.
    We all are humans and so can do mistakes, but not learning of mistakes is bad for traders. I would not say that i never get emotional and never do mistake, but until i get risk free i go with my plan and never get greedy even if market lure me. But when i withdraw more than my investment, i get bold, and may be i turn excessive confident to take big risks which often results in blowing my account. But that is ok for me, as some time we may take big risks especially if we are sure it shall not cost us much.

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  5. #24
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    Quote Originally Posted by shubhamhero View Post
    it's great to see what and how you have explained. there are a lots of websites as well as e-books are available, which offers a lot of information to the users who are new in trading. however, i personally believe that opening a demo account is the only best choice anyone should prefer, irrespective of his level to even improve his skills.
    Yes there are quite a lot websites where information can be gathered and there is no doubt that demo account is extremely useful when it comes to gaining hands on experience about forex trading and improving your trading skills by a lot. Learning from websites and practice on demo can produce wonderful results.

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    Last edited by guru; 09-15-2013 at 01:40 AM.

  6. #25
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    That should be the true hierarchy at which traders are trading and getting the right trading experience about the forex market, but in the truth of the whole matter, it is not always like that, if you have a good mentor or teacher that teaches you his direct skills, you might be better of in the market, and you might jump from beginner to pro in no time.

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  7. #26
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    Quote Originally Posted by sam9630 View Post
    I think learn is very important in the trading because if we have the knowledge of the trading then we will mange the trading well so the learning is very important and if we have the good knowledge then we implement our skills of the trading well so the need is that we learn more and practice more in the trading.
    Well, learning is surely important but even so, if you didn't have the knowledge you need to get it by learning under the people that have the experience. if you just learn it from some random source then i'm sure that you will only loss your money in the end so take a look first and decide carefully.

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  8. #27
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    Learning is very much important for the traders before they start thinking of the earning process and the same is very much true even in the case of the forex trading business. If the trader has very good knowledge regarding the forex market then there are very high chances that they can handle any kind of situations to the best level with their knowledge.

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  9. #28
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    At first i would like to thank you for a nice a informative post . It will be very helpful to make teach myself what kind of trader i am . I think every body should be conscious about his position in Forex trading . I think i have reached at the fourth level of the curve . Because i make loss for a little time now a days . Now i am try heard and soul to improve my trading strategy to make a very good profit .

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  10. #29
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    Quote Originally Posted by mohamed reda View Post
    loss money is the most popular thing to convert a beginner trader to a master trader .loss money will be useful for you as a beginner trader to know how is your strategy work ?? , you will having a new skills ,you may read the market without any technical analysis .so i can say that mistakes will be the best way to have the full experience an the full knowledge about Forex trading so i prefer as a beginner trader to start trading with a trial account .
    at some points people will understand whether their's efforts has been paid off or not, even after losing so much money, some people just never learn anything from this market, i think we should have a good measurements of checking how our results have been improved or not. if we find nothing as progress then i think every mistakes still can be counted in vain. therefore, its not wise to say that mistakes is the best way to have a full and good experience about this market.

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  11. #30
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    Quote Originally Posted by miraz View Post
    learning is essential in this business . because Forex trading is very risky business . in this business learning is so important . we should need first learn this business properly . if we have learn well we can be successful in this business . so we should need be careful of our learning process .
    of course we should be careful man , but i think Forex is not the very risky business , i think we can called it only risky business because you always have the choice in your risk by controlling in your lot volume , so you can make it very or high risky by enter with high lot volume or you can make it low risk by enter with low lot volume ...

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