Stages in Evolution of a trader
Stage
One: The Clueless Trader
1) Heard of a day trader making millions, or buying options is safe and can
make you rich quickly
2) Got lucky in an earlier stock investment.
3) After all, how hard can it be? The money sounds appealing and the freedom to
be independent sounds attractive
4) Every trader is optimistic
5) You open a direct access brokerage account and the sound of Level II,
ask/bid, and market makers make trading sound like hi-tech video game
6) You will buy just to see the market reverse and you will short just as the
market starts to rally.
7) Most of your trades are done emotionally. You buy just because the markets
feel strong without any logical reason
8) You have no clue how the mechanics and psychology of trading works. What's
worse? You are not aware that you don't know
9) Most traders will blow their entire account at this stage.
10) Mostly you start your trading in a bull market
11) You will spend more time finding a broker charging least brokerage, how to
save tax, and like companies paying dividend and issuing splits and bonuses and
less time in learning what trading actually is.
12) A big majority of people will leave trading and blame the randomness of
markets, or say markets are always manipulated
13) Generally you start with fundamental analysis and put money in
"good" companies and don’t forget to watch CNBC
14) You don’t know what is short selling or have never tried it, no idea of
stop loss as well
15) You are in the unconscious incompetence stage, in this stage your capital
is at maximum risk
To be continued .............
