The Futures Trading Success Ladder

First Rung: The Education Of A Trader

Becoming a successful futures trader doesn't happen overnight. You don't read a book and Voila! another successful futures trader dazzles Wall Street. It would be nice, but it's just not going to happen. Once you decide to become a futures trader there's a lot of hard work ahead.

You may already be reading and visiting internet sites or participating in a local traders club. These are great places to start your education. You'll gain ideas and theories from which you can start to build your system. But they can't deliver a fully realized system, ready to use and proven to perform. As in many fields, education is only the first step to success. You have to learn by doing. You can't really learn how to trade without actually trading.

You can save yourself years of lost time and money by following in the footsteps of a master trader. Futures trading is a complex profession. It is often easier to learn successful trading techniques (including what and how to chart, indicators to watch for, and how everything comes together) by looking over the shoulder of a successful professional trader. It's the apprenticeship approach to learning and it has considerable value in futures trading.

If you want to fast track your education as a futures trader, you need to find a successful winner to emulate. There is no faster way to learn the intricate ins and outs of this complex venture than by watching someone who has already achieved mastery. Look for someone who trades daily and makes money consistently. Many people talk the talk but few actually walk the walk. You don't want to emulate someone who has just written about futures trading, you want as your mentor someone who has proven his or her success in the marketplace.

Once You're Trading, You Really Begin to Learn

Loss is the futures trader's bugaboo, that annoying little wisp of fear in the back of your subconscious that keeps you from pulling the trigger and achieving success. To succeed as a futures trader you have to squelch thoughts of previous failures and concentrate on learning the new skills that will lead you to success.

Learning is a four-step process, each step building upon the previous step and leading us to the next step until we reach our goal. We move from unconscious to conscious knowledge and from incompetence to competence as we move up the learning ladder.

The Steps of the Learning Ladder

Unconscious Incompetence: You Don't Know What You Don't Know!

Everyone starts out at this level. You're curious about futures trading. You are mesmerized by the potential rewards (are those $$ in your eyes?) and think you can beat the high risks. It just doesn't look that hard. We call this the "babe in the woods" phase. You're totally clueless. You have no idea how much you need to learn to become successful.

Conscious Incompetence: You Know That You Don't Know!

You've had a couple of losses and gotten the wind knocked out of your sails. You feel incompetent and realize just how little you know. You finally realize how much you have to learn before you can start trading profitably. You have entered the "fire in the belly" phase. You are driven to learn everything you can. You are totally focused on developing, practicing and perfecting your system.

Conscious Competence: You Know That You Know!

Magic! You're winning! Your system is working and you're on top of the world. But you are still conscious of every detail, watching every indicator constantly, working hard to keep everything in focus while you work your system. You are "in the groove" and working it.

Unconscious Competence: You Don't Know That You Know!

You have arrived! You are trading in the zone. You are working your system automatically and effortlessly. You have become a master trader!