This is an excerpt from Trading Chaos by Bill Williams

Level One: You are learning to read the language of the market. You are learning to trade so that you don't lose money while gaining experience in the market.

The function of the novice level is to trade in the market and not lose money while you ain experience., In the typical scenario, most novices, whether in music, romance, or trading, tend to generate an enormous amount of "germination" energy. What follows this elation is usually depression.

"I didn't realize that, to really play the piano well, I need to spend four hours practicicing each day for years."

"Trading is really a much tricker business than I anticipated. Each time I take a step forward, that seems to be followed by a step backward."

This is the point where most novice traders leave trading. Past statistics indicate that the majority of new traders last just over three months in the market. For those souls who can weather this depression by continuing to practice music or to learn more about trading, there are great rewards in store.

"The Advanced Beginner Level: At this point, all traders reach a crucial impasse. Is the motivation for trading strong enough to overcome the temporary frustrations of the market's learning experiences? Just as gravity provides frustrations that help you learn about balance on a bicycle, so will market losses let you learn more about yourself and the balance pints of the markets.

I view trading much like the beginning of a new manufacturing endeavor. The first thing you want is to produce quality product. If you increase production before you have quality product, you will face returns from dissatisfied customers. The time to increase production is only after you have a quality product. In the markets, a quality product is being able to make profits consistently on a one-contract basis. If you are not doing this, you either don't have a quality approach to trading or you are not implementing the technique properly.

The advanced beginner has become a quality producer of profits. A trader's focus at this point is on maximization of the return on investment (ROI) as opposed to profit per contract. Professionally, at this level, a traders in the top 3 percent of the profession. We are now talking real money. " -- Bill Williams (Trading Chaos)