Today I would like to discuss a typical trader’s journey from beginner to intermediate to star trader. I’ve seen this first hand with students and some of my peers in the business. It takes a lot of grit, passion, and hard work to become a skilled trader. One of the most essential traits is resilience. The ability to get back up and keep moving after getting knocked down.

You will have good days, bad days, terrible days, and unforgettable days of sheer euphoria. If you stick with it, you might achieve things you never thought possible. You might also feel so bad that you never thought it was possible to do so much damage to yourself. This is a rite of passage for most great traders.

Finding A Go-To

Most traders begin by taking a course and reading a few books, and jump straight into the market. They might have some success, but in reality, they don’t know what they’re doing yet. It takes years to understand how the market works and where to find an advantage.

Beginner traders might think they have problems with psychology, emotions, or a slew of other issues. But in reality, it boils down to the fact that they don’t have an advantage. They just don’t know. This is why 90% of people who try trading fail.

That is one of the reasons I started RagingBull, which was to give traders access to everything I never had when I started my own journey. You see, when you surround yourself with experienced traders, and we have many here, you accelerate your learning curve.

When you are given all the tools necessary to become a skilled trader, it still can take a year or two to understand how to apply these skills. It takes time to understand yourself, the market, what makes sense to you, and how you can find good trading setups.

Without these tools, most beginner traders spin their wheels for years. Going nowhere fast because they have no advantages and no access to experienced traders to learn from. 

Can you imagine if Lebron James tried to learn to play basketball by himself by reading a few books? Without professional coaches surrounding him? Heck, he might not even have won a championship without help from his friend, former champion Dwayne Wade who helped him clear the obstacles in his path.  

Risk Tolerance

It is once a trader has an advantage, i.e. the ability to trade setups which put the probabilities in their favor that other factors such as psychology come into play. You see, we all have different tolerance for risk. And to become a bigger and better trader, more risk needs to be taken, for there is always a risk/reward relationship in the markets. 

Taking on more risk is like lifting weights. You can’t just start lifting 100 kilos if you’ve never lifted 10 kilos before. If you try, you’re likely to hurt yourself. The same can be applied to trading. Risk needs to be slowly increased week by week. Like any great athlete, methodical progress is necessary to push your boundaries and get to the next level.

Risk Management

Once a trader is consistently profitable and doing well, there will always be challenges to overcome. Especially when trading size. A person who pushes his boundaries will ultimately find them. It only takes one bad day to undo months, if not years of hard work. Almost every trader I know has this story. This is where risk management comes into play.

Professional traders focus on how much they can lose, not on how much they can make because they understand that anything can happen in the market. They’ve seen it and experienced it. It is a trial by fire. 

But, they also understand that if you don’t take enough risk, you take too much risk, which is why when you see those very rare unique setups, you must go big because when they see it, that is what elite traders do.

Bottom Line

Becoming a skilled trader is a journey, not a destination. To be among the best in any profession takes years of blood, sweat, tears, and a lot of heart. There is a learning curve that beginner traders need to survive before they can become better.  And to get there, you need help. You need help from experienced, knowledgeable traders who have been there and done that. It takes training, coaching, and idea generation. There is a saying “good artists copy, great artists steal.” This is a benefiting lesson when it comes to trading.