Becoming a Forex trader is not that difficult. It's enough to learn some basics of the subject, acquire an account with a trusted broker, deposit money into the account, and start trading. Much more difficult is becoming a successful Forex trader. There must be a reason why, according to ESMA, the EU's securities regulator, 74% to 89% of retail accounts trading CFDs typically lose money.
Becoming a successful Forex trader is a matter of willpower, intelligence, but above all, time. Time to learn, to acquire automatisms, to make mistakes. For those who cannot dedicate full days to it, see how to succeed trading part-time. The time span from the first trade to achieving success consists of various phases. These can be considered as real inevitable and necessary evolutionary steps. From this point of view, "breaking through" in trading means taking some fundamental steps. Here's what they are.
Phase One: Unconscious Incompetence
The trader is still a beginner. He has studied something, got informed, but has not completed a sufficient training path. He often loses, sometimes wins. And so he convinces himself that yes, after all, it's easy to do Forex Trading. The conviction disappears when he will inevitably lose all his capital.
Phase Two: Conscious Incompetence
The trader now "knows he doesn't know", so he stops and deepens his study. He learns market dynamics, technical analysis, how to draft a strategy and follow it. For more on this shift, see how learning trading reshapes your thinking.
Phase Three: The Eureka Moment
At some point, the trader realizes that the success he is reaping is not exclusively the result of the goodness of his analytical tools, but derives from his moral skills, his discipline, his willpower, his cold blood. He thus delves into the theme of trading psychology, trying to find the path to personal growth.
Phase Four: Conscious Competence
Now the Forex trader has all the tools to succeed: he has technical skills, he is mentally trained, he is endowed with a willpower refined over the years. He is the master of his destiny, he can even predict it. His trades are measured, punctual, precise and effective.
Phase Five: Unconscious Competence
After many years, he has achieved success. Everything now comes naturally to him. He manages to earn incredibly high figures. The work on himself is over. It's time to share his knowledge with others. He thus becomes a guru, a point of reference, establishes a network. The trading activity takes a back seat. He has reached the top. For another take on this progression, see becoming a trader in four steps.
