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Step One: Unconscious Incompetence.This is where all the newbie’s start, you have herd about trading forex and how people have made millions doing it. You are sure you can succeed after all how hard can it be? After all price ether has to go up or down.
After several losses you find out quickly that you might have underestimated how easy it is to trade forex. Every time you place a trade its like the market sees it and goes against you, gain and again.
You might have some initial success due to total luck but eventually you fall victim to greed or fear.
This step can last for a week or two and you move onto the next step.
Step Two: Conscious Incompetence.In this step you start to realise that there may be more hard work involved in this forex thing than you originally anticipated. You realise that you know nothing about trading and you set about studying everything you can find.
You set about buying e-books galore, everything seems to be the answer to your problems but nothing works. You float about from method to method trying every system in existence never sticking to one long enough for its edge to actually play out.
You test out ever indicator ever created in the hope that it will give you that key to unlimited wealth. You might even pay a guru to teach you how he trades.
This step can last a long time, sometimes as long as 3 years. This is also the time when most traders will give up out of frustration
Step Three: The Eureka Moment.
As you approach the end of step 2 you begin to realise that it is not the system that make s the difference. You see that it is actually possible to make money with a simple moving average and nothing else if you can get your psychology and money management right.
The Eureka moment is when you realise that no one can really predict where the market will go in the future. You find a system that fits your personality and you are trading your system every time it says so.
Step Four: Conscious competence.
You are now making trades every time your system says you take losses just as you would a win and you no longer let it affect you at all. You no longer have the feeling you are losing money as you now realise it is just an expense of doing this business. You are breaking even most of the time winning 30 pips and loosing 30 pips.
This step can last about 6 months.
Step Five: Unconscious competence. Now your on fire, just like driving your car, every day you are trading and running on auto pilot. You start to pull in 100’s of pips a day and it doesn’t make you any more excited than if you made 1 pip.
You look at the newbie’s in the forums and you see your self but many years ago. You have met a select group of friends that you talk to most days about the markets. Your trading account is now growing rapidly and you can hold you head high and say “I am a professional currency trader” But you don’t because you realise it is just a job like any other.