Nearly every profession has three stages of skill level. These stages are novice, competent, and expert. If you’re considering getting into trading, get used to the idea that it may take you some time to become an expert trader. You’ll need patience and a strong character to be able to progress as a trader.
The novice trader only has one trading trick. He is quite unable to trade with any other strategy in mind other than that one. He’s liable to panic if he can’t use the one particular trading trick he’s most comfortable with.
If the trader finally gives up on his old trick, he may try a new trading style. Then, of course, he’ll probably believe this new style is the only way to trade. In reality, this novice is just reflecting his inability to adapt to the market by clinging to strategies.
If a novice is confronted with a new or unusual situation, he’ll have neither the trading experience nor the emotionally balanced approach to be able to manage the new problem.
This novice will not retain his neophyte status for long. This is because, once he’s battered by the market, either he’ll give up or learn to adapt and become a competent trader.
A competent trader has several tricks in his trading repertoire. He can handle many different trading situations and is much better able to adapt to new ones. However, he still has a lot to learn.
He must keep in mind that he’ll never be certain of his investments. This will be a permanent feature of his trading life. The only way to trade with certainty is to use illegal tips.
Once the competent trader realizes this, he’ll stop searching for the “Holy Grail” of trading techniques. He’ll hold loosely to his many different trading styles but will begin to get a feeling about which ones are appropriate without obsessive adherence to any one trading strategy.
For the competent trader, it’s much more important to understand the trade than it is to know exactly what will happen. A competent trader will begin to feel comfortable in many trading situations providing he has a trade strategy to handle them. Even without a trade strategy, eventually he’ll feel safe if he has a handle on how trades will go. He will begin to see trades as being very similar to others he’s done in the past.
After having gone through this process for a while, he’ll become an expert. Expert traders don’t need to have all the facts about a trade before making a judgment. Experts don’t rely on detailed systems. Rather, they feel their way through trades based on a great amount of trade experience. In this sense, the expert trader is actually the opposite of the novice.
Experts need to learn how to be humble. Even though they’re talented, if they let their heads get too big, they’ll lose their ability to trade. Experts have gotten where they are because of quality stock trading software and a lot of elbow grease. They should never forget their origins.
Starting as a novice will allow you to become an expert. With patience and humility you will be ready to make investing your career.
About the Author
Doug Newberry, Director and Founder of Investing Systems Network, creates reliable stock trading software that helps tens of thousands of investors trade confidently. Investors all around the world enjoy his newsletter and his weekly online radio show.