Typical Stages of Trader Development

Typical Stages of Trader Development - For some time now I have been acutely aware of the unrealistic expectations of people who come into trading, thinking that they are going to be able to pick it up quickly and make a rapid fortune!  The reality is vastly different.  Here are my thoughts on what that reality is.  

The typical starting points are:


  • Interested in Financial Markets (This was me!).

  • Need or desperate to Make Money quickly!

  • They think Crypto is the best thing since sliced bread and want to trade the live Crypto Markets ASAP.

  • Interested in trading for a living but have been ‘dabbling’ and haven’t yet made the serious commitment to themselves that they need to make, in order to move forward with this endeavour.

  • Interested in giving up the Day Job/Want or Desperate to give up/quit their Day Job.

  • Want or desire an additional income (Retirees or Part-Time workers).

  • (Younger) person who can see the benefits of becoming a Full Time Pro Trader as they mature and with a desire to become financially independent/wealthier.

  • Someone who may have realised that they might have transferable skills and would like to give trading a go.

  • I’m sure there are more…..!

They seek Training & Education such as:

  • Free Courses & Workshops/Seminars/Trader Shows/Youtube/Social Media

  • Paid for Online Courses & Weekend Workshops/Seminars

  • Paid for Live Rooms & Trade Copying Services

  • Paid for Online Group or 1 to 1 or even Physical Coaching & Mentoring

Typical Trader Development, which may take years, probably follows this path::

  • Complete Newbie and doesn’t know what they don’t know, who signs up to and attends various free events/webinars/trader shows etc.

  • Spends a lot of time watching Trading Youtube Channels.

  • They are constantly seeking and yearning for that one Strategy above all others or even just a strategy that works.

  • Gets sucked into all the Hype and probably gets scammed and then becomes a little more questioning and discerning and does a bit more homework.

  • Selects and signs up to an ‘affordable’’ online trading education course.

  • Tries to trade Live too quickly and then consistently loses money or blows their whole account up once or several times.

  • Spends all day staring at their screen hoping, willing, shouting even screaming at ‘the market’ to go in their chosen direction!

  • They burn out trying Intra-Day Trading over a period of months

  • They neglect their family, friends, fitness and general well-being.

  • Signs up to a Trade Copy Service and loses money

  • Thinks about giving up and then realises that they have to get serious about this trading endeavour

  • Searches online for a Trading Coach and / or Mentor.

  • Or because they have signed up to so many trading ‘Freebies’, they open an email from a Trading Educator who seems genuine and seems to know what they are talking about.  What they say makes sense and starts to ring an inner bell, they talk straight and don’t promise immense riches and fast cars etc.  They talk about Risk & Money Management, following and improving the Process of Trading, working on your Headspace and so much more.

  • They start to follow this Trading Educator and after they have built their trust in this person, they sign up for their Trading Education Course, Coaching & possibly Personal Mentoring but maybe sequentially as they develop.

  • They then learn about:

    • How the Markets really work

    • Difference between CFDs, Spread Betting, Futures & Options

    • Price Action (Candlesticks/Fractals, Pinbars, Candlestick Patterns, Impulsive and Corrective Waves etc)

    • Risk & Money Management, Margin & Leverage

    • Some key Moving Averages

    • Supply & Demand/Support & Resistance

    • Trend and Counter-Trend Lines

    • Fibonacci Sequence, Ratios and associated Trading Tools

    • One or 2 Lagging Indicators

    • Multi-Time Frame Analysis & Strategic Context

    • Confluences

    • Correlations

    • A decent strategy or 2

    • They learn about Probabilities

    • A Trade Plan and a Personal Trading Plan

    • The importance of keeping a Trading Journal

    • Trader Development Phases: Mechanical - Subjective - Intuitive

    • The Various Trading Sessions and The Best Times to Trade and When Not to Trade

    • Fundamentals & Technicals & the Economic Calendar + Geo-Politics

      • Key Economic events (NFP/FOMC/CPI/GDP/Central Bank Rates etc)

      • They will be encouraged to Network with like minded aspiring traders because no-one understands your Learn to Trade journey better than other traders!

  • If on a more Advanced Package they may learn about:
    • The Market Makers
    • The London Open
    • Pivots and Over Extension
    • Some Proprietary Indicators
    • Advanced Divergence Strategies
    • Harmonics
    • Elliott Waves
    • Ichimoku Cloud Techniques
    • Wyckoff
    • Gann Theory
    • Trading Psychology
    • Trading as a Business + Tax Implications
    • Business Continuity
    • Pulling it all together!
  • When putting all the above into practice, under their Mentor’s guidance (who has their Investor Password, so can see their trades)::
    • They become Accountable
    • They trade in a Demo Account
    • At the same time they are encouraged to Back Test their strategies
    • They then prove to their Trading Coach / Mentor that they are Consistently Profitable over a period of at least 6 months in a Demo account
    • They begin to work on improving their own Process of Trading and never stop!
    • Only then do they start trading a small ($1-5,000) Live Account and then have to prove again that they can be consistently profitable over an extended period probably a year or so
    • During this Trader Development period they will have worked on the own ‘Head Space’, trying to recognise and control their emotions, Ego, FOMO, Revenge, Fear and Greed etc
    • They realise that Learning to Trade is also a Personal Development journey as they strive to become more self-aware and mentally and physically fit, to be able to trade in a consistently profitable way.
    • They may eventually realise that THEY are in fact their Edge!
    • Without knowing it they have probably experienced the 4 Stages of Trader Development, namely:
      • Stage 1. Unconscious Incompetence.
      • Stage 2. Conscious Incompetence.
      • Stage 3. Conscious Competence.
      • Stage 4. Unconscious Competence.
  • Once the Coach or Mentor has sufficient evidence that the aspiring Pro-Trader can do what it ‘says on the tin’ will they suggest that it might be time to either:
    • Increase the size of their Live Account Equity gradually/incrementally and probably on a Reward basis for doing consistently well.  OR
    • Consider attempting to pass a recommended Prop Firm Evaluation in order to get access to a Funded Account.

So then the question has to be asked:

‘How many people will actually invest in themselves in terms of money but more importantly in their time and effort, to actually achieve the above?’

Is it any wonder then that so many people fail when attempting to trade the Live Financial Markets or when attempting to pass a Prop Firms Trading Evaluation.

The answer is probably that they weren’t actually ready. 

If you have mastered most of the above then you should be ready to trade with a Prop Firm and gain access to a Funded Account with the benefits that brings.  More importantly, you will deserve that because of all the effort and hard work you have put into your Trading ambitions.  Additionally, you may also now realise that the money invested in the above was well spent and most likely significantly less than blowing a live trading account up!

If you feel that you are ready, then we recommend two Prop Firms:

Prop Firm A

Prop Firm B

We’ll let you decide but make sure you fully understand the Evaluation Process Rules!

If you feel you that you are NOT yet ready then maybe we can help you to achieve your trading ambitions.  Just click on the link below for more information:

Coaching & Mentorship