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4 stages of technical analysis trader? Which stage are you in?

A technical analysis trader/investor goes through 4 stages. In this post, we will discuss what are the qualities of this trader/investor in each stage and how he advances to the next stage. The four stages of the technical trader/investor are


In this stage, technical analysis trader/investor is just getting started in technical analysis. He might have either invested/traded with stocks using fundamental analysis or might have not have much experience with investment/trading. He is excited about the potential and is immersed in learning about market setups and leveraging using the power of options. Also, he is excited to place the trades with the knowledge learnt.


In this stage, the technical analysis trader/investor would have made some good profitable trades and also might have experienced big draw downs that could seriously affect his trading/investment capital. At this juncture, he begins to understand that trading/investment is not a quick rich scheme and should have a risk management in place to protect his portfolio. In this stage, he finds it challenging to achieve his goals and is seeking ways to achieve his goals without losing his capital.


In this stage, the technical analysis trader/investor begins to separate himself from novices. He understands that his trading success depends on his mindset, risk management and systems as specified below.

He starts treating trading/investing as a business and develops a trading plan. He follows the activities specified in the trading plan consistently. In this stage, he spends considerable time working on his beliefs about himself, market and money reading books, listening to successful traders etc. Also, he develops systems/framework with position sizing/risk management in place ( scan lists, entry, exit, strategies - all documented in trading plan) that enables him to achieve consistent growth and returns in all market conditions.


In the advanced stage, the technical analysis trader might be able to make a living with trading/investing income. This stage is an extension of the activities that he does in the previous stage. In this stage, he continues to hone the execution of the processes he has set for himself as per his trading plan and may reach greater heights. He also has metrics in place such as expectancy ratio, winning percentage (check out this tracker) to measure the systems he has developed. In this stage, he has a system that can achieve consistent results in all market conditions backed up by results and understands that one needs more capital to make more returns with less risk. He becomes a business owner ( raises capital from others) and achieves greater returns helping others reach their goals along the way.

Do you know which stage are you in? You cannot reach your destination if you do not know where you are. Once you know where you are, check out this training page that can be used as a guiding post to advance to the next level.


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