Found this at http://drainthebanks.wordpress.com/category/38-steps-to-becoming-a-trader/
Very interesting and logical.

38 steps to becoming a trader

1. We accumulate information – buying books, going to seminars and researching.
2. We begin to trade with our ‘new’ knowledge.
3. We consistently ‘donate’ and then realise we may need more knowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our ‘updated’ knowledge.
7. We get ‘beat up’ again and begin to lose some of our confidence. Fear starts setting in.
8. We start to listen to ‘outside news’ and to other traders.
9. We go back into the market and continue to ‘donate’.
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and start to see a little progress.
13. We get ‘over-confident’ and the market humbles us.
14. We start to understand that trading successfully is going to take more time and more knowledge than we anticipated.

MOST PEOPLE WILL GIVE UP AT THIS POINT, AS THEY REALISE WORK IS INVOLVED.

15. We get serious and start concentrating on learning a ‘real’ methodology.
16. We trade our methodology with some success, but realise that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules and find some success, but over all we still hesitate when we execute.
20. We add, subtract and modify rules as we see a need to be more proficient with our rules.
21. We feel we are very close to crossing that threshold of successful trading.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade we still have a tendency to violate our rules and our results are still erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don’t follow the rules.
30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better.
31. We continue to trade and the market teaches us more and more about ourselves.
32. We master our methodology and our trading rules.
33. We begin to consistently make money.
34. We get a little over-confident and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account
continues to grow as we increase our contract size.
37. We are making more money than we ever dreamed possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of.


DISCLAIMER:
HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

I have received a lot of emails, calls, SMS and even hearing a lot of wonderful stories about the attractiveness and high rewards of Forex Trading. Such information were even broadcasted via the Local University’s email system, without the individuals, subscribing to the mailing list. I felt very perturbed as such things are happening and continue to happen.

It is very sad that the members of the public has been receiving such information and many were only informed about the high reward levels, but uneducated about the risk involved in trading Forex. As such, I felt that it is only morally correct, to share my view and hopefully to educate as many people as possible, to firstly acknowledge that Forex trading is high risk, and not as easy at it seems.

Before I start, I would like to re-iterate the high risk warning disclaimer:

Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

Next, I would like to quote what Brian Tracy (one of the best selling author and professional speaker, who has helped over 4 million people achieve their goals), said,

“A truly honest person realises that there is no such thing as something for nothing. There is no easy way to be successful. There is only the hard ways. And we have a lot of stories in our society about people who stumbled into some career and made a lot of money quickly. And these stories pollute peoples’ mind. The reason why we hear those stories is because there is so rare…….. From a study of 1500 people in 20 years, every single person who achieve long term wealth and success, achieve it doing their job extremely well, working hard going the extra mile, putting a bit of extra time and effort. Nobody ever made money quick. I think this is the worst myth that exist in our society is that there is a fast, easy way to make money. There isn’t any! And chasing the world for the quick buck is the surest way to destroy your character and destroy your career……. Money only comes with persistence, hard work continuously over an extended period of time. So, there is no easy way to become successful.”

Forex trading is definitely not a get rich quick scheme. In order to achieve the results that you want in Forex trading, you need to put in the extra effort to understand the market behaviour, understand your emotion level and then apply proper risk management techniques as per your trading strategy or system. Only risk what you can afford to lose and make sure you spread your eggs into different baskets, don’t dump your entire fortune into Forex trading. Nevertheless, one must also understand that despite Forex trading can bring you financial independence, it cannot bring you financial freedom. Notice the difference in the phrases, “financial independence” and “financial freedom”.

The Forex market is the largest financial market in the world, with a daily transactional volume of around USD 3.8 trillion. It is an extremely fast and volatile market, compared to other financial instruments. Because of the high leverage and also because of the Internet and Mobile trading on a PDA or smartphone, Forex trading is now one of the most popular financial market in the world. However, one must know that these features can be a double edged sword if not handled properly. This is similar to the analogy of fire, a good servant if used properly, a bad master if it gets out of control. If one is not able to take such risk, one should never even consider Forex trading.

Many people like to have “fast and easy money” and therefore choose to trade Forex. While this statement holds a certain level of truth, this is only achievable if the trader is well educated of the risk, experienced in managing his emotions and his risk, and his system of trading has proven to be profitable and consistent, not just a one off case. To be able to reach to this stage, the trader must have invested numerous time and effort in researching and practicing his trades and has constant trading reflections, to find out his strengths and weaknesses and then carry out the necessary changes to up his skill. Such skill and experience cannot be gained overnight, only through hard work, consistent effort and practice.

Brian Tracy’s 80/20 rule in a typical sales organisation, said that top 20% of the people are making 80% of the money and the remaining 80% of the people are competing for the remaining 20% of the money. This is also true in Forex trading as it is a zero sum game. If somebody makes a profit, somebody will make a loss. In the case of Forex trading using the 80/20 rule, top 20% of the traders are making 80% of the profits and the remaining 80% of the traders are fighting for the remaining 20% of the profits. In order to be in the top 20% traders, they must be willing to put in the consistent effort, consistent hard work, consistent practicing and reflecting their trades and are willing to pay the heavy price in order to be a successful and profitable trader. There is no short cut, no easy way out, only the hard ways.

As people realised that such education is necessary, many Private Education Institutions (PEI) were set up, with the purpose of educating and training the general public on Forex Trading. Each PEI has its own in house unique set of strategies, unique set of course deliverables, unique set of after-course support and of course, unique way of marketing its courses. In any field, there will always be a mix of the good, the bad and the ugly, no two ways about it. Definitely there will be the real good ones who are genuinely wanting to help the general public, acquire the right skills and right mindset to trade the ever-changing Forex market. However, there are also PEIs that will only highlight the rewards and the potentials but did not highlight the risk. Some PEIs made a lot of big claims, over-promise, under-deliver in their courses and after-course support. The ugly ones are those who resort to unscrupulous marketing gimmicks or hard selling tactics. The main bulk of their revenue may not be from trading the Forex market but may come from, but not limited to, referral fees of new students signing up the course or introducing broker incentives.

Before jumping into Forex trading or any other kind of trading or investment, one must first determine his or her own financial objective, as explicit and as clearly as possible. More importantly, the reason for such an objective. Next, what are the plans and activities that the person is doing now to achieve the said financial objective. One must also determine his or her comfortable risk level and evaluate the possible choices of financial instruments which fit the risk level. Of course, needless to say, during the evaluation of choices, one must understand the financial instrument well enough to make informed decisions. If during the evaluation process, Forex trading is something that could possibly fit into his or her portfolio, have he or she done enough extensive homework and accept the risk? If the decision is made to enrol into a Forex trading course, does the homework include research on the PEI? Also, what does he or she want to achieve from the course? At this point of time, some might be thinking, why ask the obvious question? Of course to learn the right skill set to trade the Forex market. But the reality is something else. What do we do with our Primary education, Secondary education and even tertiary education textbooks and notes? Often there were chucked one side. Moreover, not all the knowledge are applied in our work or our daily life. This is also true for some attendees who have attended a Forex trading course and have their notes and knowledge “chucked” one side. There are also people who attended Forex courses, for the sake of networking and meeting new people, to increase their network and hence creating new business opportunities.

For those who are looking into Forex trading courses, if time and resources are not an issue, by all means, go to all the PEIs and attend all their courses! They are bound to teach something beneficial. However, if time and resources are limited, one have to carefully find the course that is suitable to the individual and meets the individual’s requirements. One should also note that going through such courses does not guarantee your success! Therefore, to conclude, people need to know what they are doing, in this case, carefully consider whether Forex trading is for them.

Life is not fair; get used to it. - Bill Gates.

Success is going from failure to failure without a loss of enthusiam. - Winston Churchill.

One of the greatest discoveries a man makes, one of his great surprises, is to find he can do what he was afraid he couldn't do. - Henry Ford.

Competing in sports has taught me that if I'm not willing to give 120 percent, somebody else will. - Ron Blomberg.

If you are going through hell, keep going. - Winston Churchill.

It was character that got us out of bed, commitment that moved us into action, and discipline that enabled us to follow through. - Zig Ziglar.

There is the old story about the three workers at a construction site, chipping away at some stones. Asked by a bystander what they were doing, the first worker said he was breaking rocks. The second said he was making a living. The third replied, "I am building a cathedral." - Norman R. Augustine, Director and Retired Chairman, Lockheed Martin Corporation.

Source from Mike Litman's blog at http://www.mikelitman.com/blog/2009/06/one-word-2/

Action

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