The 6 Stages of Trader Development:

Stage 1: Trader learns the mechanics of trading, acquires rudimentary knowledge of chart patterns and trades many different setups and without regard to position sizing and risk/reward ratio, consistently loses money

Stage 2: Trader begins to learn from successes and mistakes and adapts accordingly, still losing money but at a slower rate

Stage 3: Trader begins to develop a trading style, limiting trades to a small set of favorite setups, trader adopts a set of rules; trader experiences a flattening of the P/L curve, and eventually experiences a noticeable uptrend

Stage 4: Trader has now developed a profitable trading system; trader's account, confidence and position sizing start to grow but growing pains ensue and win streaks are sometimes met by short and sharp periods of pullback as the trader learns to adapt to trading larger size; the trader's challenge is no longer largely technical, it is now psychological

Stage 5: Trader learns to overcome psychological barriers to achieving the next level, and reduces incidents of big mistakes; position sizing increases in stages, and trader experiences parabolic growth; a trader may oscillate between Stages 4 and 5 as they try to reach higher levels of scale

Stage 6: Trader reaches maximum scale within the chosen niche, or maximum scale according to the trader's individual risk profile, lifestyle or financial commitments; profit chart continues to go up, but no longer parabolic

Back to Stage 1: Trader seeks new horizons and taller challenges and goes on to experiment with new niches and markets, using lessons and experiences acquired from the first cycle of development to vastly shorten the learning curve of this new cycle