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The Three Stages To Becoming A Profitable Trader

Becoming a profitable trader broken down into three stages:


Stage 1 - Unprofitable Trader:


Effects:

Small wins

Large Losses

Negatively trending Equity


Cause:

Poor Trade identification

Poor Risk Management

Poor Profit taking approach


Stage 2 - Boom & Bust:


Effects:

Roughly equal Wins & Losses

Non trending Equity


Cause:

Better Trade identification

Poor Risk Management

Profit taking way too early

Over Trading


Stage 3 - Profitable Trader:


Effects:

Larger Wins

Smaller Losses

Positively Trending Equity


Cause:

Good Trade Identification

Good Risk Management

Let's Profitable Trades run

Cuts Losing Trades quickly

Knows when to Sit on Hands


It is important to note that traders can often slip back and forth between stages and often get caught up in the cycle of doom..

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