When a trader first considers the idea of trading the Forex for a living, the well-known statistic which states that less than 10 percent of all traders who attempt to trade will actually succeed in the market can be intimidating. Even more intimidating is the fact that many of these traders actually trade for years before they finally give up. However, as daunting as it may seem, it is quite possible if the trader educates himself and allows himself the required time to progress through the different levels, or stages. The three main stages of trading are explained below:
STAGE 1: THE BEGINNER TRADER
At this point the aim should be on gaining a good grasp of the basics, experimenting with different trading methods and strategies, as you try to decide on what suits you most in terms of lifestyle and personality. During this stage, needless to say, it is essential that you first practice on a demo trading account. This not only saves you from potential financial disaster; it can prevent the type of psychological trauma which is detrimental to successful trading later, and the dream of trading Forex for a living.
STAGE 2: THE COMPETENT TRADER
At this level you graduate to trading on a live account, so the emphasis will be on duplicating the success you had while trading on demo. You will probably notice that it is more difficult because of the fact that money is now on the line, as well as your emotions as a consequence. Establishing equity management rules and trading accordingly will aid in developing your confidence as a trader, and enable you to experience consistent success.
STAGE 3: THE EXPERT TRADER
This is the stage that every beginner trader yearns to attain. At this level the trader is able to execute trades according to the rules of his strategy without the hindrance of emotions. He sees his trading as a business, and so is not susceptible to greed, fear, or many of the other common trading errors that occur as a result of negative emotions.
The learning curve is different for every trader, and the length of time spent at a particular stage will vary from trader to trader. The point is not to attempt to rush the process, as, ironically, you might find yourself having to start over at a later point. Trading the Forex for a living is a worthwhile dream; one which if attained can give you incredible satisfaction and financial independence. Approach it with the respect it deserves, and you will have a chance of finding yourself amongst the lucky 10 percent who consistently profit from the market.
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