How Long Does It Take To Learn To Trade Forex Profitably?
Despite what Instagram gurus and influencers want us to believe, learning to trade forex ‘successfully’ is not an overnight process. In fact, learning the foreign exchange markets is one of the hardest markets to master. This is due to the huge amount of volume and liquidity, leading to aggressive price movements and a lack of cohesion with fundamental factors.
Does this mean it’s impossible for us to learn to trade? No, not at all!
Learning to trade forex is doable for everyone, but it’s important to be realistic with timelines to avoid disappointment or quitting too early into the journey.
On average, it takes around 1 – 1.5 years for someone to learn how to trade forex. Mastering the craft takes many more years.
In this article, we are going to look at exactly how long it takes to learn forex and how we can speed that learning process up by avoiding many mistakes that traders consistently make whilst learning.
Let’s get into it…
How Long Does It Take To Learn To Trade Forex Profitably?
If you’ve settled on learning to trade forex, it’s important to understand that you’re choosing to learn one of the toughest markets in the world. Whilst being one of the toughest, it’s also one of the most lucrative due to high leverages and huge amounts of opportunities. This isn’t meant to put you off the learning process, but more so to set expectations correctly. I see it time and time again, traders giving up on trading after just 2-3 months because they aren’t yet millionaires. Trading is a career, and like any other career, you start at the bottom and upskill yourself until you’re valuable in the market or to a company. With this in mind, you need to be allowing yourself over a year of consistent study to find consistency within the forex market.
For some traders, the process takes even longer, with many years needed to find success.
It’s equally important as to be realistic with the returns you can generate from forex trading.
Can You Learn To Trade Forex Quickly?
I know what you’re thinking… “I’m sure I can learn forex in less time than a year”. Well, maybe you can, maybe you can’t. It’s more likely that you can’t. There isn’t really a way to speed up the learning process besides being very consistent and disciplined. If you head to Canary Wharf or even interview a lot of the successful retail traders you find online here, you’ll realize that none of the traders learned overnight. The more conventional traders all spent 3-5 years getting a formal education, then further years within institutions. In short, if you’re looking to get rich quickly, then forex is not the right fit for you. This is a marathon, not a sprint.
What Can Speed Up The Forex Learning Process?
Whilst forex trading isn’t very quick to learn, there are a number of different things you can do to speed up the process. These tips and tricks are all simple to implement but will potentially save you months of wasted work, or even stop you from quitting forex!
Sticking To One Trading Strategy At First
Learning any trading strategy takes time, and it’s incredibly easy to get distracted and bounce between things. Whilst having more in your toolbox isn’t a bad idea, when you’re first in the markets you won’t have the knowledge needed to utilize all of these skills, and they will be more of a distraction than a benefit.
Prioritize Learning Risk Management
Risk management is without a doubt going to be the most important part of your trading journey. Without the risk management foundation behind you, no trading strategy is going to be profitable, and you’ll struggle to make any consistent profits within the market. Instead of focusing purely on technicals and learning a strategy, learning to manage your risk will get you profitable much faster. Not learning risk management is one of the primary reasons why traders fail in the markets.
Focus On Percentage Gain, Not Win Rate Or Profits
If you focus on profits, you will make mistakes and not prioritize your risk management. This will cost you a huge amount of money and ultimately time during your learning process. To shortcut the learning time, it’s crucial to focus purely on percentages and not chase huge amounts of money, at the cost of your account balance.
Journal All Of Your Trades
You can’t learn and grow from your mistakes in the markets without noting them down. Create a trading journal and log every single trade in the journal. This will highlight mistakes, trades to avoid any trades you should double down on – as well as tweaks in your trading plan. The more data you have on the market, the better you can approach the market.
Backtest Your Trading Strategies
If you have a setup that occurs once or twice per week, it’ll take you a very long time until you’ve seen this setup thousands of times and understand it very well. Backtesting allows you to run through past data at a much faster speed, so you can recognize the setups and learn how best to approach them. There are many great tools out there for backtesting that won’t cost more than $100.
Take It Seriously
I see so many ‘traders’ on Instagram that have very little love for the craft or interest in actually succeeding, they’re more interested in appearing to be succeeding. If you want to succeed in the forex market and learn quickly, you need to prioritize this in your life and take it seriously.
Trade With A Prop Firm
By trading with an online prop firm like Lux Trading, you are given the opportunity to learn from a dedicated mentor and a community of traders, whilst working towards managing a large amount of capital. This takes away all aspects of greed and high-risk trading on low account balances as you’re working towards managing up to $10,000,000 in funded capital. We’ve worked with hundreds of traders around the world, taking them from newbies to funded full-time traders. Read this article to learn more about why you should be trading with a prop firm.
Mistakes To Avoid When Learning To Trade Forex
There are a number of mistakes that I see repeated time and time again by newbies in their first few years in the markets. Although simple and fairly obvious, it’s important to understand what to look out for, as it’s very easy to get sucked into a spiral of mistakes…
Changing Trading Strategies
‘Shiny ball syndrome’ is huge within forex. I see traders online with a new trading strategy every single week. The reality is that there are some strategies that work better than others, but as a general rule, risk management is what is going to make a difference to any trader in the markets. I’ve been in this cycle myself, and it was incredibly hard to get out of.
- You find an amazing trading strategy and back test it for a few days.
- You start trading it and there are a few slow days and a few losses.
- You look at your old trading strategy and see it performed very well in the last few days.
- You abandon the new strategy and go back to the old strategy.
If you’re serious about progressing in the industry, you need to break this cycle.
Not Learning About Trading Psychology
Trading psychology is the difference between profitable and unprofitable traders, once the fundamentals and basics have been learned and absorbed. This is something that all traders should be dedicating a huge amount of time to, upskilling in this area. It’s often overlooked but any profitable trader will tell you the importance of spending time learning this side of the market.
Not Spending Time On Demo Trading Accounts
Traders love to get straight into trading their live money accounts after watching a few videos on Babypips. Stop doing this. When you’re trading live money, you’re full of emotion, which will impact your decision-making processes. This environment is not the best environment to learn technical analysis in. You want to be paper trading or demo trading for the first 3-6 months to fully understand your trading plan and risk management thresholds before even opening a live trading account. Ask any trader how much money they made in their first 6 months – this will be enough to convince you to trade on demo.
Focusing On Profits, Not Managing Risk
Your primary job as a forex trader is to manage risk, not make money. You need to be extremely calculated and do everything you can with regard to risk management to ensure that you aren’t giving away any money to the market where it’s not needed. For beginner traders, the prospect of huge sums of money is obviously very appealing, and it’s why we all got drawn into trading in the first place. However, focus on losing percentages and gaining percentages, instead of the dollar value attached to the pips.
In Summary – How Long Will It Take Me To Learn To Trade Forex?
In conclusion, learning to trade forex will take you around 1 year if you’re consistent and dedicated to the process. It’s important to understand that there is still no guarantee of profitability after a year or two, and some traders try to learn for years whilst being unsuccessful.