Market Masters: The 3 Development Phases Of A Successful Trader

J. Brett Freeze

I would like to thank the late William McRae for instilling this understanding in me early in my career.  I enjoyed putting this together and hope it helps traders (at any level) better understand what it takes to make it.

Trading Development Phases: The Long Haul To Becoming A Successful Trader

In order to become a successful trader, one has to make it through each of the following trading development phases. It’s a tough profession with many hurdles to overcome within each phase.


The Novice Trader:

  • Accumulates information: reading books, watching financial media, and researching.
  • Is equipped with new knowledge and begins to trade a specific market.
  • Consistently “donates” capital to other market participants, realizing the need for additional knowledge.
  • Accumulates more knowledge.
  • Armed with additional knowledge, begins to trade again in a different market.
  • Consistently donates capital to other market participants; begins to feel despair.
  • Trading decisions begin to be influenced by news headlines and other trader’s actions.
  • Consistently donates capital to other market participants.
  • Begins trading a different market.
  • Searches for additional knowledge.
  • Begins to have a minor amount of success.
  • Gets overconfident and Mr. Market quickly humbles him/her.
  • Starts to understand that trading successfully requires more time and knowledge than anticipated.
  • Most novice traders give up at this point as they realize actual work is involved.


The Intermediate Trader:

  • Begins learning a real methodology.
  • Trades methodology with limited success but realizes “something” is missing.
  • Understands the need for having rules to apply to methodology.
  • Takes an extended leave of absence from trading to research and develop trading rules.
  • Begins trading methodology again, armed with new trading rules.
  • Finds limited success, but hesitates when executing trades.
  • Adds, subtracts, and modifies trading rules in pursuit of trading proficiency.
  • Feels very close to crossing threshold of successful trading.
  • Starts to take responsibility for own trading results; begins to learn that success is within self-discipline, less-so the methodology.
  • Continues to violate trading rules and hesitate when executing trades.
  • Knows success is near; validates trading rules again and begins to rebuild confidence in them.
  • Understands the importance of following trading rules, as reflected in trading results.
  • Understands trading success is within self-discipline; understands importance of introspection.


The Master Trader:

  • Continues to trade methodology, increasing discipline to follow trading rules.
  • Continues process of introspection, as trading continues through multiple market environments.
  • Masters trading methodology.
  • Adheres to trading rules with no exceptions.
  • Consistently profitable trading results.
  • Gets overconfident, lose discipline in following trading rules, and Mr. Market quickly humbles.
  • Allows methodology / rules to trade for him; trading becomes boring, but very successful.


Thanks for reading.


Twitter:  @Techs_Global

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.