Hey Steemians,
This week on Mystery Monday, I wanted to share a graph I learned from Livestream Trading, depicting a common learning curve of a new day trader (these experiences may not be relevant to every trader).
In the beginning, many new traders may win small profits, but those profits usually don't last very long as it was likely due to luck.
As a new trader continues trading, reality will hit when the trader begins to realize that they do not have a strategy for consistent profits.
If they do learn a proper trading strategy, they may start to go breakeven in their net profits. They may win a few trades, then lose a few trades. This is an important milestone as 90-95%+ day traders lose money to the market.
A trader may start to find some consistency and start building up some confidence as they become more experienced with trading.
After a series of wins, it is easy to become overconfident and take on risk you are uncomfortable with, resulting in a big loss.
If the new trader does not take a step back, reevaluate his/her trading strategy and establish the amount of risk they are comfortable with, they may enter a vicious cycle of emotional trading.
This phase is crucial to either becoming a profitable trader or blowing up your account.
If the trader reestablishes his/her risk management strategy and trading strategy, they will be able to recover from the big loss and eventually become profitable long-term.
Currently, I believe I am in the breakeven phase. I know of many trading strategies, but I am still in the process of narrowing them down to 1-3 strategies I can consistently profit from.
Trading is a skill that will require a long time to develop, and it is a valuable skill that can be used for a long time.
I have had doubts and came close to quitting a few times, but I believe if I continue learning and trading with proper risk management, I will inevitably become profitable.
Enjoy your week everyone. Hope this brought you some value :)
Let me know where you are in this graph!
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