Stage 6: Mastery

At this level, the trader achieves an almost Zen-like trading state. Planning, analysis, and research are the focus of his time and effort.

When the trading day opens, he's ready for it. He's calm, relaxed, and centered, and trading becomes effortless.

He is thoroughly familiar with his plan. He knows exactly what he will do in any given situation, even if the doing means exiting immediately upon a completely unexpected development.

He understands the inevitability of loss and accepts it as a natural part of the business of trading.

No one can hurt him because he's protected by his rules and his discipline.

He is sensitive to and in tune with the ebb and flow of market behavior, and the natural actions and reactions to it that his research has taught him will optimize his edge.

He is "available".

He doesn't have to know what the market will do next because he knows how to react to anything the market does and is confident in his ability to react correctly.

He understands and practices "active inaction," knowing exactly what he wants and what he's looking for and patiently waiting for the right opportunity. If and when that opportunity presents itself, he acts decisively and without hesitation and then waits patiently for the next opportunity.

He does not convince himself that he is right. He watches price movement and draws his conclusions. When market behavior changes, so do his tactics.

He acknowledges that market movement is the ultimate truth. He doesn't try to outsmart or outguess it.

In a sense, he is outside himself, acting as his own coach, asking himself questions and explaining to himself without rationalization what he's waiting for or what he's doing, reminding himself of this or that, keeping himself centered and focused, and taking distractions in stride.

He doesn't get overexcited about winning trades; he doesn't get depressed about losing trades.

He accepts that price does what it does and the market is what it is.

His performance has nothing to do with his self-worth.

During this stage, the "intuitive" sense begins to manifest itself. As infrequent as it may be, he learns to experiment with it and to build trust in it.

At the end of the day, he reviews his work, makes whatever adjustments are necessary, if any, and begins preparing for the following day, satisfied with himself for having traded well.

The knowledge proved through research that a particular price pattern or market behavior offers an acceptable level of predictability and risk-to-reward to provide a consistently profitable outcome over time.

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