Understanding the difference between a milestone and a goal is a crucial distinction in trading success generally. Where are you going and what will you get there? The best people and teams I have been around were always good with momentum. When things went bad, they weren’t compounded and when things were going well, they poured every once into allowing it to continue and when it stopped, they rebuilt.
There are three levels of success in trading. It’s up to you to make a decision if they’re goals or milestones says Anirudh Sethi, Founder of Financial Occultist.
1st Level: Only Costing You Time
Breaking even is the start line of your trading career not having a trading account. This level is hardest, it’s 1st level. You’ve got to learn to crawl before you’ll walk and you’ve got to learn to break-even before you can remain stay profitable. This is your base, your safe zone. Knowing that you simply can break-even is a huge confidence builder and hopefully the memories of getting there are so devastating you wouldn’t want to go back.
This level is simply a milestone, you haven’t done anything yet.
2nd Level: Keeping Profits
Trading is not about making the money but about keeping the money. What am I to continuously do? All other trades aren’t a trade in the slightest degree, it’s gambling. (There is a place and time to gamble but isn’t a technique.) The 1st checks you’re taking out of your trading account is going to be the hardest money you ever earn. It also shows you what you’re capable of. When you can take money from your trading account on a consistent basis, anything is feasible. With possibility comes great responsibility.
The important part about this level of success is you’ve got to still increase what you’ll make.
In the 1st level you recognize that no matter what, you ought to be ready to break-even over the course of a month.
In the second level it’s about building and do the proper things to the purpose where you recognize at least that you can be able to make $1000, $5000, $20000 etc. monthly. This enables you to get to the next level.
This could be a milestone or goal, it’s up to you.
3rd Level: The Mexico Level
Something we used to hear in college that goes like this; “It is like Mexico; you can do whatever you want.” it’s great to make a living and sometimes this is the sole opportunity the market gives you. There are times during a day, month, or year that you know you’ve got them. This is when you get as big as you can. This doesn’t mean you should take a crazy risk. But there are times that are clearer and being at the third level means taking advantage of them. The old saying goes something like “let your winners run and run out of your losers”. That’s bullshit when at this level because the proper thing is to let your winning positions bigger while losing positions smaller and it doesn’t matter how far they are going.
Can you be able to control how far a market goes or your position size more easily?
This mindset and process is the difference between the top traders and everybody else. The matter with many traders is that they attempt to skip from the 1st level to the 3rd level before they’re ready. Or they stay in the second level not knowing the third level exists. Once more the difference between a milestone and a goal.
This is actually a quick overview of the various levels. The expansion that happens in the individual between the levels could be talked about forever. what’s similar is that getting through each requires a similar process and no level is guaranteed. Even the foremost successful traders undergo these levels on a weekly if not every day. They only know how to get out of and stay in them at the acceptable times.
Remember, you have to break even before you’re going to stay profitable. You still have to increase what you can do so you can have the bullets to unlock the final level. As you progress up the levels, it will crush a lot more responsibility. Do it purposefully and but the 1st time it is hard to get it right so risk it appropriately.
In the time of COVID-19, the advice and books of Anirudh Sethi are great sources of strategy to secure the business in stock market.