If you have delved deeper into this question, there are certain things that you cannot ignore. It is an absolute requirement that you want to work towards this goal. Therefore, the topic of "work ethic" must be at the top. Without this quality, you will not succeed. Even the following eight steps will not help you. Because trading is a huge, multidimensional puzzle that will take years before you are perfect at it. If you view the following eight steps as individual steps in a process, you will be able to derive the highest value from them.
Step 1: Losing Money
In the first stage of the process, you will lose money. This is entirely normal. Every successful trader has lost at the beginning. Some even everything. This can be one of the reasons why these individuals fundamentally change their behavior. They associate the pain they experienced with bad behavior. Consequently, they avoid making the same trading mistake a second time. However, since there are far more than just one potential mistake in trading, this is a long process. Therefore, it is all the more important not to give up at this stage. This is the first time you show whether you really want it and mean it seriously with trading.
Step 2: Lose Less Money
One day, you will start losing less. Your biggest losers will get smaller. You still have miserable days, but you can keep them much smaller than a few months ago. The number of loser days will also decrease. Nevertheless, you still lose. You see the progress, see the process because that's what trading is all about!
Step 3: Your First Break-even Month
It's time! You had your best month yet. What? Still not green? No, but break-even. Good traders can see the process and work only on that. If you come from a lot of loss to less loss and finally to ± 0, then this is a great success that should motivate you.
Attention: This does not mean a month where you were break-even by chance and luck, but a month where you really worked hard on your trading and made progress.
Step 4: Your First Profit-Making Month
You analyze how you managed to make the month ± 0. You will probably notice that you have already done many things brilliantly, but that you still have a lot of potential in other areas. That's great! Imagine if we had no more potential and the maximum was break-even. That would be sobering.
So, there is potential, and that's where our next monthly goal comes in. You may have noticed that you were particularly good when you had enough time for your analyses. So, to summarize: If you have done the required work, it will be reflected in your trading performance. This should be motivation and inspiration at the same time.
If you haven't already established it, journaling should become a permanent part of your trading routine no later than this stage. Within our education, we show our students a detailed and sophisticated process. To keep the start of journaling as simple as possible, it makes sense to rate the following three process goals on a scale of 0 to 10:
- How good was your entry into the trade?
- How good was your exit from the trade?
- How good was your profit-taking? / How well was your stop loss placed?
It absolutely doesn't matter how the trade itself went. So don't rate whether the trade was monetarily successful. Focus on the process and the corresponding process goals.
Step 5: Consistently Profitable
You are consistently profitable (on a monthly basis). You have won the next two months in a row. Your account is constantly growing. Nevertheless, you still see the problems and hurdles that can make the difference for you personally. Work on these to get better! Here, too, we can still get better and set ourselves weekly goals as an interval. The goal could be to win at least 3–4 weeks within a month.
Step 6: Expand Your Niche
You are getting to know your niche better and better. You have optimized your setup, established rules for when it doesn't work, when you don't work mentally, and so on.
What now? Find more trades that fit this niche. If you trade stocks, for example, stock screeners can help you program and search for your parameters to find more opportunities within your niche. In general, we recommend using software as support for discretionary trading. There is also the possibility of trading the tested parameters 100% live later. You want to take necessary steps to enable you to take more trades within your niche.
Step 7: Expand Your Trading Plan
You have mastered one setup excellently. Now it's time to move on to the next setup. So, all the work again? Yes, that's the reality. The goal is to expand your personal trading plan. This can be additional trading instruments, timeframes, or strategies.
Step 8: Go Big!
Risk more in your best trades. Every few weeks, you have your perfect trades, but what makes these trades so perfect? Is it news circulating at the same time? Other chart patterns that occur at the same time as yours? Whatever it is, find out! Categorize all your trades so that you can quickly find these A+ trades. Look at the charts of these setups and try to capture all the variables of these trades. If we go into detail for weeks, we will find variables that we would never have recognized otherwise. Of course, these A+ trades rarely occur, but when they do, we can risk more than usual. However, follow the standards of reasonable risk management. You shouldn't bet your entire house right away!
The path to becoming a successful trader involves at least eight stages that everyone has to go through in one way or another
Conclusion
The goal of every trader is to be profitable. But this goal is very vague: We are profitable when we are slightly green. But have we taken all the steps to become the best trader we could theoretically be? Very likely not. So, roll up your sleeves and let's go.