5 Learning Phases of a CFD Trader
What does it take to become a good and professional trader? Are there such requirements or skills to develop?
Every new trader out there is eager to become the best and pursue the right path. But how? Different paths in CFD trading’s worth trying and pursuing – trade for a huge investment bank/hedge fund, trade with your account, or own an asset management firm.
You might think that all traders spend all their day in front of the monitor, checking on the movement of the market and evaluating if it’s time to trade or not. This is a misconception. A lot of traders are also employed locally and this is not new. They are from different industries with different jobs. This goes to show that trading is for everyone and you can become an experienced trader without special consideration on your educational background.
How can you become a CFD Trader?
When you trade, you should predict the movement of the market as the profit will come from the entry and exit of trades. Similar to stock traders, a CFD trader also buys whenever they predict that the currency will go up while they sell if they think that the value will sink. Most of these traders did not study trading in universities. They are self-taught and was able to learn about trading through experience and trading books.
If you want to know your current state, you may want to check these learning phases of CFD trader.
Learning Phases of a CFD Trader
Phase 1: Unconscious Incompetence
This phase is the first stage of a trader. If you think you are here, then you definitely know about the Forex market. But your knowledge is limited to that. You are unaware of how much you need to learn to become a successful CFD trader. Most of the time, there’s too much leverage on your trades and you lack knowledge on risk management. You are also overconfident which leads you to trade overly. This phase mostly goes on for a few weeks.
Phase 2: Conscious Incompetence
During this stage, you have experienced your first loss and it certainly blew up your funds. This is the time when you realize that trading is so much work. There are a lot of things to know and remember. You now know that you are incompetent as a trader and you start to learn more.
Phase 3: The Eye-Opener
In the second phase, you’ve realized that you are incompetent and need to further study about trading. During the third phase, you will come to realize and understand that no trader can exactly predict the movement of the market in the next second or days.
Phase 4: Conscious Competent
After careful study and examination, you will know that your trade setups are effective and you are doing great. Despite a few losses, you manage to stay around.
Phase 5: Unconscious Competence
This is the final phase in which trading becomes a job. You have known the markets and don’t get overly excited about things like wins and loss. Your capital then starts to grow at a fast pace.