|
Hey hey, what’s up my friend! Today, I’d like to share with you the 5 stages of profitable trading and how you can quickly level up from one stage to the next. (It’s kind of like playing Counter-Strike with bunny hopping, the game gets easier!) Ready? Let’s go… 1: Hyper newbie stage At this stage, you have less than 1 year of experience and have heard about the riches trading can bring. You have thoughts of trading for a living. Or think you can take a small account and turn it into 6 or 7-figures. As you can tell, your expectations are out of whack. (It’s like saying you can be an F1 driver after taking a few driving lessons.) Clearly, it’s not going to happen because you’ll lose it all in a matter of months. After blowing up multiple accounts, you realize the need for sound risk management, and you move on to the next stage… 2: Risk manager Now, you understand the importance of risk management. You’re able to risk a fraction of your capital on each trade such that even if a trade hits your stop loss, the loss is only an “ant bite” to your account. Then, you learn about the risk-to-reward ratio, aiming for a minimum of a 1 to 2 risk-reward ratio before placing a trade. However, the losses cause you to suffer death by a thousand cuts, and your account value is heading lower. That’s when you realize there’s more to it than just risk management and risk-to-reward ratio… 3: Lone ranger At this stage, you have a few years of trading experience. You have studied lots of trading materials like candlestick patterns, support and resistance, MACD, RSI, Stochastic, Fibonacci, etc. And yet, your account still isn't growing. You feel like you're doing everything right but getting everything wrong. The reason? You have no edge. In other words, you don't have a proven trading system that gives you a statistical advantage over time. Without it, all your indicators are just fancy decorations on a losing trade. To find an edge in the markets, you must either backtest or forward-test your trading system. This way, you can find out whether your trading system works or not. Many traders will attempt and fail. Most will give up on trading entirely. But for the few who make it, you move on to the next stage… 4: Profitable trader Welcome to the top 5%. Take a moment. You've earned it. (I'll wait.) You now have a trading system that works. Your account is growing. You're finally making money consistently. This feels incredible. For about five minutes. Then, the market conditions change. Your trading system underperforms. And you are in a drawdown. Depending on your trading system, the drawdown could last for months or even years. At this point, you realize you need multiple trading systems so you can profit in different market conditions, and you move on to the final stage… 5: Business owner At this stage, the goal is to profit in any market conditions and sleep peacefully at night knowing that no matter what the market throws at you, you’re covered. This is where you develop new trading systems so you can profit in a bull market, bear market, or even a choppy market. The journey is never-ending as you develop new trading systems and source new funds to add to your trading business. It's like levelling up in a game that has no final level, which is what makes it so addictive. Now… I believe most traders struggle to find an edge in the markets. That’s why I wrote the book, Trading Systems That Work. Inside, you'll get three proven trading systems backed by 25 years of data so you can skip the years of trial, error, and expensive tuition fees the market loves to charge. Cheers, Rayner “still-levelling-up” Teo |