5 Stages Most Traders Experienced (Choong Ty'ng Ty'ng from Axcelearn)

It is better to lose opportunities than to lose money

~ Choong Ty'ng Ty'ng (Axcelearn) ~

Many do not know that a trader needs to go through 5 stages in her/her trading journey.

Choong Ty'ng Ty'ng shared 5 stages in the training video below.

Stage 1

Making Losses

Normally due to:

• No trading plan
• No trading rule
• Not cutting losses
• Just follow friends
• Having margin call

Stage 2

Reducing Losses

Normally due to:

• Not following the trading plan
• Not following trading rule
• Poor money management
• No trading journal

For trading plan:

Pre-defined the setup before enter the trade.

After you enter a trade, don't adjust the trade unless with a valid reason.

For setting up stop-loss

Calculate the stop loss first.

And don't set the stop loss too far from the entry price, else there is no point of setting up the stop loss.

E.g.

The entry price is RM5.00.

If the cut loss price is RM1.00, then there is no point of putting up the cut-loss price at all.

Also, don't set cut loss too near the entry price, because of the volatility, it can trigger the cut loss pre-maturely, and so you lose the money.

So it is important to calculate the volatility range or the price fluctuation.

Do some backtesting. Use Microsoft Excel will do for simple analysis. You may need to pay for more complicated software.

Also, using a different indicator (RSI vs EMA) will affect the cut-loss price.

Also, even using the same indicator, the different settings will also affect the cut-loss price.

Stage 3

Breakeven

For Stage 1 to 3, it is better to follow someone's else successful strategy.

As 90% of the traders actually lose money, it is better to get a mentor and take this as a learning stage.

So if you are at stage 1 and 2, do not be alarmed, because you are actually not alone.

Most importantly, is to preserve your capital.

Warren Buffet says:

Rule 1: Don't lose money

Rule 2: Don't forget Rule#1

Stage 4

Making Little Profit

You are basically making 5 steps forward, and then making 4 steps backwards.

This is where you have good trading habits and good money management strategies.

However, at this stage, they do not know what strategies is working best and not working.

They should continue to refine their good strategies or strengths.

Focus on those strategies that are having high probabilities of winning.

Stage 5

Making Consistent Profit

Follow strictly the trading plan.

Know when to enter and exit.

Take a good calculated risk.

Stage 6 and Beyond

Scaling Up Your Profit

Stretch your limit.

Have a growth mindset.

Keep thinking on improving the game plan.

Keep refining the strategies.

Analyse all the previous trades and strategies.

Note that, you don't scale from stage 1 and stage 4.

Conclusion

Don't be too worry about jumping the stages.

Everyone went through stage 1 and stage 2 before.

It is part of the learning curve.

Enjoy the journey.

There is no shortcut, but if you work hard, you can fasten the learning curve.

It is best to have

• Good trading habits
• Have a trading journal
• Have a defined money management
• Follow your trading plan and rules
• Learn from the best
• Manage your psychology

Don't spend too much time on analysis tools (indicators), but focus on money management and trading psychology.

Reference:

http://www.bursamarketplace.com/mkt/bcr/choong-tyng-tyng

https://www.theedgemarkets.com/article/cover-story-doing-maths-futures

https://www.axcelearn.com/

The above amazing notes are given by Choong Ty'ng Ty'ng from Axcelearn, through their first Facebook live video during MCO.

What stage are you in?

Do share to us your trading journey so that can learn from one another.

Happy Investing! 😉