Step two is where you realize that there is risky market and more work involved in trading and that you might actually have to work a few things out. You consciously get that you are an incompetent trader – you don’t have the skills or the insight to turn a regular profit.

You now set about buying systems and e-books galore, read websites based everywhere from A to Z and begin your search for the Holy Grail. During this time you will become a system nomad – you will flick from method to method day by day and week by week never sticking with one long enough to actually see if it does work. Every time you come upon a new indicator you’ll be ecstatic that this is the one that will make all the difference.

You will test out automated systems on trading platform, you’ll play with moving averages, Fibonacci lines, support & resistance, Pivots, Fractals, Divergence, DMI,
ADX, and a hundred of other things construct your ‘magic system’. You’ll be a top and bottom picker, trying to find the exact point of reversal with your indicators and you’ll find yourself chasing losing trades and even adding to them because you are so sure you are right.

You’ll enter the live chat room and see other traders making pips and you want to know why it’s not you – you’ll ask many questions, some of which are so dumb that looking back you feel a bit trivial. You’ll then reach the place where you think all the people who are calling pips after pips are liars – they can’t be making that amount because you’ve studied and you don’t make that, you know as much as they do and they must be lying. But they’re in there day after day and their account just grows whilst yours falls.

You will be like a adolescent – the traders that make money will freely give you guidance but you’re stubborn and think that you know best – you take no notice or advice and overtrade even though everyone says you are crazy- but you know better. You’ll consider following the calls that others make but it still not work, you try paying for signals from someone else – they don’t work for you either.

You might even find a tutor like Rob Booker or someone on a chat board who promises to make you into a trader. Whether the guru is good or not you won’t win because there is no replacement for screen time and you still think you know best.

This stage can last for a long time – in fact in reality talking with other traders as well as personal experience confirms that it can easily last well over a year or even nearer 3 years. This is also the step when you are most likely to give up through
sheer frustration.

Around 60% of new traders give up in the first 3 months – they give up and this is
good – think about it – if trading was easy we would all be millionaires. another 20%
keep going for a year and then in desperation take risks guaranteed to blow their
account which of course it does.

What may surprise you is that of the remaining 20% will last around 3 years – and they will think they are safety – but even stick to 3 years only a further 5-10% will continue and go on to actually makes money consistently.

By the way – they are real figures, not just some which I’ve picked out of my head – so when you get to 3 years in the game don’t think it is a plain sailing from there.

I’ve had many people argue with me about these timescales – none of them have been trading for more than 3 years – if you think you know better then ask on a chat board for someone who’s been trading at least 5 years and ask them how long it takes to become fully 100% proficient.

Eventually you do begin to come out of this phase. You’ve probably committed more time and money than you ever thought you would, lost 2 or 3 loaded accounts and all but given up maybe 3 or 4 times but now it is in your blood