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5 Levels of Competence on Your Path to Professional Trading

7:35 AM Mar 19, 2020
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Trading Psychology

Do you think you are unique? You are, no doubts. But this doesn’t mean that your actions are not subject to common patterns. Almost every trader follows the same path. Most of them leave the market in the process and only a few manage to become real professionals.

The only chance to start making a stable income on Forex is to accept the inevitability of failures, gain lots of patience, and be ready to always move on. The path to trading success can be divided into five main levels. Perhaps you will recognize yourself in one of them. The main thing is to remember that it will be better in the future. You should keep on moving because at the end of this path you will find success.

Unconscious Incompetence

Everyone promises you quick and easy money. You look at the chart and see how the price moves up and down, in waves. When it goes down you sell. When it goes up you buy. Not too complicated, right? What could possibly go wrong?

You are not the first to come to Forex with such thoughts. And you will not be the first to randomly open trades and close them when the price goes the wrong way. Open orders in the opposite direction and close again when the market reverses. And so on in a vicious circle.

And losing from the start is not the worst option. Someone is lucky to open several successful trades and so begins to invest more and more, increasing the volume of transactions and, in the end, losing tons of money.

Usually, it takes a couple of weeks for traders to understand that Forex is not so simple. This is the moment when you begin to realize your incompetence.

Conscious Incompetence

This is a difficult stage. You are already aware of your incompetence but continue to make many unforgivable mistakes.

You understand that the time to become serious, start studying and use some handy tools. At this stage, traders tend to complicate everything and cling to every dubious opportunity:

  • Constantly change trading styles and strategies
  • Litter the charts with countless indicators
  • Seek out for any kind of signal in the market
  • Try every single Expert Advisor

Whatever you do, you will continue to lose more than you earn. This stage lasts an average of up to a year. This is where most traders leave the market. More than half of them will not last even three months. The main thing at this level is not to give up everything and wait for the next stage that will become a turning point for you.

Eureka!

This is the moment when you understand that there is no magic grail, that you cannot predict with 100% accuracy the next price movement. At this stage, the trader begins to realize that it’s crucial to start with yourself:

  • Learn to cope with your emotions
  • Get a reliable risk management system
  • And most importantly, build a simple trading plan

This is the moment when other traders and their opinions stop existing for you and you are left face to face with the market finally starting to understand it. It’s like gaining Zen. You stop seeing money and only see numbers. You create an individual system that becomes unique. You start taking losses as part of the process. You understand that you are finally becoming a competent trader.

Conscious Competence

Your profit has finally begun to exceed total losses. You quickly find suitable trading signals, always look for confirmation, and open successful trades. You are not afraid of fluctuations in the market. You know how to protect your profits and close trades after receiving a signal for an exit.

You do have losses. You can lose 30 points right in the morning but in the evening you win them back. Bad days happen too but you don’t give up and get extra profit in the next few days. Your system works and you know it.

Unconscious Competence

This is what you aspired to from the very beginning. Trading becomes an integral part of your life and firmly enters your daily routine. Checking the economic calendar every morning is now a habit. Closing trades in the evening and at the end of the week is more a routine than an important thing that you might forget about.

This is the moment when you start using intuition to open your orders. You only need a quick glance at the chart to see if there are any worthy trading opportunities. At this stage, Forex trading might become your full-time job because you get significant and, most importantly, stable profits from your trades.

Conclusion

Sorry to say but those who come to Forex for quick and easy profit are going to fail. You are also doomed to failure if you want to “defeat” the market and make it work for you. The success on Forex only accompanies those who are willing to work.

Only a few reach the fifth stage. Not more than 5-10%, to be exact. And it’s not about any special abilities. The path to success is long and difficult. Only those who are able to overcome difficulties, no matter what will reach the end. Are you one of them?

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morning star evening star figures diamond divergent triangle symmetrical triangle reversal signal financial intelligence financial education long-term investing triangle ascending triangle descending triangle risk control stocks Forex mutual fund EUR/AUD AUD Australian Dollar Australia ECB RBA demo live live account spike bearish spike bullish spike breathing techniques meditation unusual trading tips useful habits nutrition intermittent fasting Three indians pamm mam expert advisors start-up capital business Forex business oversold overbought reverse signals 15-minute chart full-time trading discipline drawdown inflation devaluation IDR LAK export Russia regulations regulators Central Bank quantitative easing quantitative tightening Donald Trump Joe Biden coins indexes DXY ICO Mrs. Watanabe beginner trader carry trading young traders women traders productivity self-discipline rectangle sideways channel trend figure Alexander Elder John Murphy Jack Schwager limit order leaving Forex 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losing streak perfectionism consistent profits starting capital initial investment market psychology japanese candlesticks PAMM trust management money manager holidays market sentiment CHF CAD Great Britain pound Swiss Frank reserve currency averaging morning routine initial capital potential profit reverse pattern rounded bottom rounded top saucer inverse saucer IB Program IB Commission Sharing reversal patterns deposits payment methods payment systems local transactions trader’s block market balance
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terms Stop Loss news trading economical calendar major news release currency pair currency rate national currency trading journal trades profit/loss emotions news release positions size Expert Advisors platform trading robot cryptocurrency volatility day trading position size lot account types cent accounts Mini account ECN Copytrade ECN accounts swap-free minimum deposit order execution liquidity providers demo accounts real account low-risk trading EUR/USD economic calendar majors cross-currencies exotic currencies base currency quote currency quotes bid ask Brexit United Kingdom European Union GBP Euro GDP WTO price levels moving average 4-hour chart 1-hour chart bulls bears false breakout cross-currency USD price action pin bar trading inside bar trading hands off breakeven stop loss 50% stop loss pin bar high-frequency trading position trading swings breakout strategy trading style Entry order Take Profit hammer shooting star inside bar pinocchio bar head and shoulders harami risk to reward ratio trading calculator trader’s age emotion control stop-hunting false signal trading session New York session Asian session non-farm payrolls fed rates decision central banks mentor teacher Forex education Forex books candlesticks bonuses tradable bonus no deposit bonus deposit bonus cashback pending orders counter-trend trading risk-to-reward ratio 1-2% rule uptrend downtrend news releases slippage emotional trading stop orders limits orders trailing Stop correlation Correlation Matrix EURUSD EURJPY RSI Overbought/Oversold indicator doji morning start candlestick pattern liquidity London session gap requote US dollar greed excessive trading Expert Advisor trading instrument Twitter Trump euro Canadian dollar Japanese yen Mexican peso currency pairs Fed China economic news currency wars USA interest rates trade agreement H1 H4 D1 sell trade buy trade price level trading system COVID-19 coronavirus lockdown checklist Default mode network Nonfarm Payrolls intraday traders lot size Stop Out margin breakeven pip point entry price chart candles weekly candle daily candle engulfing candle Doji W1 fears money management trading signals Charles Dow Dow theory primary trend Relative Strength Index signals market noise trading volume oversold/overbought corrections candle M30 GBPUSD GBPJPY pending order fundamentals Interbank order Stop order Limit order Standard account Interbank account liquidity provider M5 chart gold XAUUSD Chinese yuan flat US Dollar Fed Interest Rates inflation level XPTUSD platinum XAGUSD silver USDCNY Chinese Yuan instruments swap trading hours Buy Stop Sell Stop Average True Range ATR range sideways range price level trading scripts Excel tables entry point equity balance applications highs and lows RSI Fibonacci terminal server proxy OS Windows XP self-trading Forex advantages gap trading Fibonacci levels USDJPY Buy Limit Cherry Blossom market cycle mark-up mark-down consolidation distribution long positions short positions double bottom triple bottom double top triple top pattern signal presidential cycle Elliott wave Kondratiev wave Forex terminology quote standard lot mini-lot micro-lot cross pairs exotic pairs counter-currency terminology Margin Call long position short position buy sell candlestick chart bar chart line chart range market channel high low ADX OHLC patterns profit level martingale aggressive EAs VPS demo account EA tester trading signal chasing the market clicking the button oil trading lot EUR cent account Forex mentor novice trader emotions control fear psychological level round numbers Key Levels indicator MetaQuotes iOS Android mobile trading mobile terminal VPS server financial portals day trader position closing short timeframe fast trading news site news portal FXStreet Investing.com Forex Factory ForexLive DailyFX CPI PPI economic indicators Non-Farm Payrolls monetary policy FOMC retail sales inflation rates program installation intuition apps ECN brokers market makers financial 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morning star evening star figures diamond divergent triangle symmetrical triangle reversal signal financial intelligence financial education long-term investing triangle ascending triangle descending triangle risk control stocks Forex mutual fund EUR/AUD AUD Australian Dollar Australia ECB RBA demo live live account spike bearish spike bullish spike breathing techniques meditation unusual trading tips useful habits nutrition intermittent fasting Three indians pamm mam expert advisors start-up capital business Forex business oversold overbought reverse signals 15-minute chart full-time trading discipline drawdown inflation devaluation IDR LAK export Russia regulations regulators Central Bank quantitative easing quantitative tightening Donald Trump Joe Biden coins indexes DXY ICO Mrs. Watanabe beginner trader carry trading young traders women traders productivity self-discipline rectangle sideways channel trend figure Alexander Elder John Murphy Jack Schwager limit order leaving Forex useful tips motivation on Forex expanding triangle 5 candlesticks signal confirmation loss control currencies Germany market execution instant execution taxes laws remote trading withdrawals time management British pound BoE unemployment rate interest rate breakout Sydney session Tokyo session disposition effect continuation pattern golden rule enter trade high volatility risk trading trading discipline trading strategies Forex risks trading risks systemic risks technical risks force majeure criminal risks self-education self-study professional education Forex forecasts partnership program Forex bonuses Forex contests self-employed trader bars harami cross engulfing belt hold sandwich piercing line dark cloud cover marubozu three black crows upside gap two crows multitasking wedge figure trading sessions major trend million financial literacy budget goal setting Forex resources Myfxbook useful tools account analysis account monitoring trading analysis economic sentiment consumer price losing streak perfectionism consistent profits starting capital initial investment market psychology japanese candlesticks PAMM trust management money manager holidays market sentiment CHF CAD Great Britain pound Swiss Frank reserve currency averaging morning routine initial capital potential profit reverse pattern rounded bottom rounded top saucer inverse saucer IB Program IB Commission Sharing reversal patterns deposits payment methods payment systems local transactions trader’s block market balance