Hey, friend, welcome to the third lesson of the practical series!
It has been a month without updating the course content, and I have been busy building my quantitative trading program. Currently, you can observe my live trading on the Binance copy trading page.
In the last lesson, we turned on all the lights on the table, revealing the giant whales, market makers, and project teams hidden in the dark. Do you feel a bit of 'pressure'?
Don't worry. Trading this game has never been 'retail vs. house', but 'past you vs. present you'. Your biggest enemy is never others, but the emotional, undisciplined you.
Every trader who can ultimately survive in the market and even achieve stable profits was once that “retail trader” who relied on feelings to chase highs and cut losses. Their transformation was possible because they fully experienced the four essential stages of growth.
Today's lesson is essentially a “Trader Upgrade Map.” You will see your current position within it, find the upgrade bottlenecks, and avoid those fatal mistakes that 90% of beginners make.
The four realms of traders: Which layer are you in?
Take a look at these four stages; do they seem familiar?
Level One: The “Gambler” guided by feelings (Unconscious Incompetence)
This is the starting point for all beginners and also the disaster area for “retail traders.”
State: You don’t know that you don’t know.
Behavior characteristics:
Decision-making based on feelings: There is no strategy; buying is entirely based on “I feel it will go up.”
News-driven: Spending all day in communities, inquiring about the “wealth password,” chasing various positive news.
Outcome-oriented: If you make money, you think you're a genius; if you lose, you blame the broker for manipulating the market.
Outcome: You are the most delicious “nutrient” at the poker table, stepping in to take positions when the whales pull up and contributing stop losses when the broker spikes. At this stage, losing all your money is just a matter of time.
Level Two: The “Believer” in search of the Holy Grail (Conscious Incompetence)
This is the most painful and longest stage for beginners.
State: You know that you don’t know.
Behavior characteristics:
Frantic learning: You begin to realize that “feelings” are unreliable, so you cram all the technical indicators you can find.
Indicator abuse: You set your K-line chart to be colorful, using MACD, RSI, KDJ, Bollinger Bands... trying to find a “100% win rate” perfect indicator, also known as the “trading Holy Grail.”
Frequent trial and error: You use method A today and lose; then immediately switch to method B tomorrow and lose again. You fall into a vicious cycle of “learning leads to losses, and losses lead to more learning.”
Outcome: This is where 90% of people give up. They become exhausted from not finding the “Holy Grail,” ultimately leaving the scene with the conclusion that “techniques are useless.”
Level Three: The “Craftsman” who follows discipline (Conscious Competence)
Congratulations, if you have managed to get through the second stage, you have arrived here. You are starting to grasp the essence of trading.
State: You know that you know.
Behavior characteristics:
Simplicity is the ultimate sophistication: You have discarded 90% of indicators, leaving only the core few (such as naked K, moving averages, trading volume).
Accepting losses: You no longer pursue a 100% win rate but understand the “positive expectation” discussed in the first lesson. You start to view stop losses as a “necessary cost.”
Building a system: You start to construct your own trading system (such as “only trading daily breakout levels”, “only taking opportunities with a 2:1 risk-reward ratio”) and force yourself to execute it day in and day out like a craftsman.
Outcome: You begin to stop losing money and even make small profits. But you still feel very tired because each of your actions is accompanied by a huge struggle with your own “inner demons.”
Level Four: The “Trader” who integrates knowledge and action (Unconscious Competence)
This is the highest realm of trading.
State: You don’t know that you know. (Because discipline has become instinctive)
Behavior characteristics:
Trading cost ability: You no longer need to deliberately “obey” discipline because it has become your muscle memory.
Emotional separation: Opening positions, cutting losses, and taking profits feel as natural to you as breathing. You watch the account fluctuations with an untroubled heart, focusing only on “executing the actions correctly.”
Outcome: You no longer care about individual gains and losses; you only care about the system's long-term positive expectation. You have become the calm “professional player” at the poker table, and the market has become your ATM.
The three deadliest “roadblocks” for beginners
From the first level to the third level, the biggest obstacle is not intelligence, but human nature. The following three mistakes are the most common for beginners in the second stage and are the fundamental reasons preventing them from upgrading:
Holding positions (not cutting losses): This is the number one killer for beginners. After you buy, if the price drops, you are unwilling to admit your mistake and cut losses, instead fantasizing that “it will go back up.” The result is that small losses become big losses, and big losses lead to liquidation. (Please review Lesson 7 of (Beginner's Guide) 10 times!)
Overtrading: You get anxious if you don't look at the market for a minute; if the K-line goes up a bit, you want to chase, and if it drops a bit, you want to bottom fish. You always want to catch “all” fluctuations, resulting in frequent trading, contributing all your capital to fees and the broker's “spikes.”
Pursuing a 100% win rate: You cannot accept losses and always want to find that “perfect” entry point. You spend a lot of time “predicting” the market instead of spending time “responding” to the market (developing risk control plans).
Conclusion: Your upgrade journey starts now.
Alright, today we have finished looking at this “Trader Upgrade Map” together. From “Gambler” to “Believer”, then to “Craftsman” and “Trader”.
The growth in trading is essentially a process of “de-retailization.” The purpose of this process is to eliminate those emotional, feeling-based, and undisciplined “retail habits” from yourself.
In this lesson, I would like you to share in the comments section:
In comparison to these four stages, where do you think you currently stand? What is the biggest “bottleneck” you have encountered? (Is it holding positions? Is it overtrading? Or is it in search of the Holy Grail?)
Facing yourself honestly is the beginning of upgrading.
Having seen the path of growth and knowing the pitfalls along the way, in the next lesson, we will officially enter [Module Two: Mastering Your Arsenal]. We will start with the most basic K-lines and truly learn how to “understand” the language of the market.
If this map has made you see the path ahead today, please remember to like, bookmark, and follow! This upgrade journey is destined to be lonely, but I will be with you! See you in the next class!
(Disclaimer: The above content is merely a sharing of trading knowledge and does not constitute any investment advice. All trading carries risk; the market is volatile, and you must be cautious when entering the market. Please ensure to implement risk control.)