If you are looking to be a trader in the stock market, there are different ways to get there. You can, for example, either obtain a trading education, or learn from an expert, or you can go it alone. The stages below are for those who choose to find their own way in becoming a trader.
Stage 1: Drunk Driver
At this stage, your aim is to get rich quick. You do not have an understanding of the market and you are misinformed. You think the market is easy and you can easily make money. You look at the market as a gamble. You may initially win but eventually you lose. You associate trading with risk. At this stage, you should limit your risks and find yourself a mentor.
Stage 2: Shopaholic
You are tired of trading in risky dealings and you want to be informed. You end up spending a lot of money on commissions and different books and personal tips. In your quest for information and new techniques, you try different trading methods, but never stay long enough to see if they actually work. Most people get frustrated and quit.
Stage 3: Eureka
At this point, you have lost your desire to get rich quickly. You are trading because you like what you are doing. It is where the realisation of your discipline dawns on you. You understand that you cannot predict the market but you can anticipate your moves. You start to take risks, some of which pay off. This stage represents where you start to have an understanding of the working of the trading markets.
Stage 4: Developing Trust
When your confidence continues to rise in the market, you begin to take more risks. You accept loses as much as you do your successes. At this stage, you can tell a bad trading investment and limit your loses. This period may last between six months and 1 year, and is where you learn to trust your judgement.
Stage 5: Cruise Control
This is the final stage of becoming a trader. Now you know what it takes to trade in the markets. You know that getting rich happens slowly and there are no short cuts. You will be able to pick good deals, and; winning and losing become normal to you. At this point, you will also be able to offer advice and guidance to other beginners in the market.