User: RZR: Trading Rules: Evolution of a Trader

Dear Trader,

the following article I’d like to share with you is actually a quote from an unknown author. These are not my worlds but they could be.  Although, I feel some points a slight exaggeration I certainly can identify most of those stages in my professional development. It is all about the Rule Based Trading and the importance of discipline which can’t be emphasized enough. Obviously discipline doesn’t come itself; you have to have your sound (Technical Analysis) knowledge, your homework done, got prepared so you can accept, follow or even adapt those specific rules confidently.

Anyway, read it and try to determine your stage honestly.  Also, I guess it is a good idea to print it out and stick it up in front of you to remember where you are and where you are going.

‘Evolution of a TraderAuthor – Unknown

1. We accumulate information – buying books, going to seminars andresearching.2. We begin to trade with our ‘new’ knowledge.3. We consistently ‘donate’ and then realize we may need moreknowledge or information.4. We accumulate more information.5. We switch the markets we are currently following.6. We go back into the market and trade with our ‘updated’knowledge.7. We get ‘beat up’ again and begin to lose some of our confidence.Fear starts setting in.8. We start to listen to ‘outside news’ and to other traders.9. We go back into the market and continue to ‘donate’.10. We switch markets again.11. We search for more information.12. We go back into the market and start to see a little progress.13. We get ‘over-confident’ and the market humbles us.14. We start to understand that trading successfully is going totake more time and more knowledge than we anticipated.

MOST PEOPLE WILL GIVE UP AT THIS POINT, AS THEY REALISE WORK ISINVOLVED.

15. We get serious and start concentrating on learning a ‘real’methodology.16. We trade our methodology with some success, but realize thatsomething is missing.17. We begin to understand the need for having rules to apply ourmethodology.18. We take a sabbatical from trading to develop and research ourtrading rules.19. We start trading again, this time with rules and find somesuccess, but over all we still hesitate when it comes time to execute.20. We add, subtract and modify rules as we see a need to be moreproficient with our rules.21. We feel we are very close to crossing that threshold ofsuccessful trading.22. We start to take responsibility for our trading results as weunderstand that our success is in us, not the methodology.23. We continue to trade and become more proficient with ourmethodology and our rules.24. As we trade we still have a tendency to violate our rules andour results are still erratic.25. We know we are close.26. We go back and research our rules.27. We build the confidence in our rules and go back into themarket and trade.28. Our trading results are getting better, but we are stillhesitating in executing our rules.29. We now see the importance of following our rules as we see theresults of our trades when we don’t follow the rules.30. We begin to see that our lack of success is within us (a lackof discipline in following the rules because of some kind of fear)and we begin to work on knowing ourselves better.31. We continue to trade and the market teaches us more and moreabout ourselves.32. We master our methodology and our trading rules.33. We begin to consistently make money.34. We get a little over-confident and the market humbles us.35. We continue to learn our lessons.36. We stop thinking and allow our rules to trade for us (tradingbecomes boring, but successful) and our trading account continuesto grow as we increase our contract size.37. We are making more money than we ever dreamed possible.38. We go on with our lives and accomplish many of the goals we hadalways dreamed of.’

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