We have followed thousands of traders over the years and noticed that they almost all go through the exact same 5 stages. In psychology, it’s often referred to as the “conscious competence ladder” and it applies to trading as well.
Understanding at which stage you are right now can help you make the next step more easily and help you avoid the most common mistakes
Stage 1: Unconscious incompetence
This is the initial phase of a novice trader when he is just getting his feet wet in the markets. At that stage, a trader doesn’t know how much he doesn’t know, which can often be a liberating, but dangerous place to be in because the dangers are not obvious to him.