~ The 3 Stages of Trading ~

the 3 stages of trading
Which Year Are You?

Stage 1

The other day I had begun to notice a pattern of successful day traders. Year one, beginning traders seem to miss every play. They chase stocks up, the sell them down, they are all over the place frantically trying to keep their head above water. The noise of social media rains rainbows and unicorns of unfathomable probability over night. Dreams of success and promises (lies) of trading being easy strikes a nerve in newbies triggering their desire to gamble their money away. Only do the persistent ones last a little longer as long as they start smaller and don’t blow up too much of their funds chasing pumps. Hopefully most of these traders are learning from other truly successful traders such as my Top 5 Favorite Traders.

~ The 3 Stages of Trading ~

Stage 2

As year two creeps around the corner the traders are now honing in on their favorite patterns a bit more and focusing on just a few strategies that are beginning to show them a sense of what consistency tastes like. During this second year of refinement, traders see the patterns they should trade but still miss everything. They second guess their ability to recognize a good setup even if it’s presented itself hundreds of times; they are still hesitant to hold longer or follow their plans, they are even surprised how well their plans worked out but they still didn’t feel the conviction to follow through. This leads to them recognizing true missed opportunities unlike the first year where they felt like everything was being missed!

In my experience as a year two trader, another reason for missing so many trades during this time is growing into the mindset of process over profits. It takes time to learn the discipline to wait for your setup to come to you then having the conviction to take the trade when it dances in your face. Only after tons of practice; refining entries, recognizing exits, finding the broker that fits your technique, and molding your mindset, does the process begin to feel fluid.

After FOMO (fear of missing out) has bit the year 2 traders in the behind, year 3 has begun. Now these traders have spent an ENTIRE YEAR missing plays that followed their plans. Not only do these traders have the experience of witnessing good plays versus bad plays, but they recognize the difference. The familiarity of the expectation of the setup has imprinted in the minds of these traders. For a whole year they practiced disciplines that some traders never learned.

~ The 3 Stages of Trading ~

Stage 3

Year three plus traders are now trusting themselves enough to pull the trigger. The FOMO of missing so many great setups from their second year is imprinted in their brains. (Don’t mistake these as fomo trades though. What I means that they remember so many setups that they won’t waste the opportunities now.) Their focus is on point. As soon as a setup is unveiling its beauty the trader is ready to nail that entry!

No hesitations!

Nothing will stop them!

The trade is theirs for the taking and good luck stopping them! Over 100 times that similar setup laughed at them as it ran. Now they are beginning to grow their account because they spent an entire year preparing for that moment! They are now learning different aspects to trading such as scaling in and out, letting their stocks run, locking in profits and find the ideal exits. Entries are now their strength and refinement never ends!

They have gained the practice of knowing what an ideal entry looks like…

They now recognize what an unideal setup smells like…


Okay that last part was a joke. I am not sure of any trader mentioning the smell of any pattern. LOL

the 3 staged of trading
Patterns, Patterns, Patterns

~ The 3 Stages of Trading ~

Pointing out the 3 Stages of Trading

Why Market Conditions Matter

The point is that these traders are still persistent and not giving up. By year three some traders have refunded their accounts but they have not given up! They stick it out during the slow years learning when to take a break from trading and focus on their education, family, balance, health, reading books etc.

Now, 90%+ of traders lose consistently and so many never even graduate to year two or three. For many many more traders, they don’t even become consistent recognizing setups in year three. Sometimes it takes four, five, six, ten years to find consistency.

The market molds the trader and that is why no trader can be compared. If all there are, are opportunity after opportunity, then it is faster for a trader to recognize setups such as morning panics, First green days, and even breakouts.

Some many never hit that achievement.

This timeline is solely based on my current experience and patterns I began to recognized based on my twitter feed.

~ The 3 Stages of Trading ~

Don’t Pressure Yourself

Every Market is Different

So don’t feel pressured if you aren’t at this level by year 3. The 3stages of trading has been an unverified trend with no statistical backing. Just something fun that I noticed and wanted to write about. Not to mention market environment changes constantly. SO many students in the Timothy Sykes Millionaire Challenge have crossed the million dollar mark thanks to the 2020 bubble. This has even played a drastic role in my education. Without that speed up in the market, everyone would be taking a lot longer than 3 years. Not to mention a lot of traders that have reached the million dollar milestone have taken well over 3 years to reach that goal.

By my mentioning 3 years, I am talking about finding consistency and not actually reaching a million in three years. Just thought I should make it clear incase you think you will be like the examples above. Also to mention, I follow a select few traders; not the majority. This is another reason why it should not be seen as a statistical evaluation based on the accuracy and speed of the trader becoming consistent. Always remember 90%+ of traders lose so never invest with any money you aren’t willing to lose.

~ The 3 Stages of Trading ~

How to Speed UP the Learning Curve

Kick Your Education in High Gear!

There is no easy way around education. Although I did write a post on Trading “Cheat Codes” you must still put in some effort. The effort comes in many forms. It could be the amount of time you are willing to invest in your own education, it could be the effort you put into waiting for the right setup without degenerately trading everything that moves, or maybe it is learning from mistakes during your trading experience, maybe you realize you would like an extra advantage by trying out indicators that improve your trading style.

The amount of education and resources in trading can be overwhelming. And I know, my blog adds another load on top of it. The point of this blog is to document what is working for me or at least what I am experiencing. This includes what I learned NOT to do or what I am finding helpful.

I won’t truly know what works for me until I reach that first $100k, then I can more confidently say I have found my groove.

~ The 3 Stages of Trading ~

Leave comments below and tag my social media to let me know how your journey is going! What stage are you in you journey? How can you compare your growth since you first began?


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