Last Updated on 10 February, 2024 by Rejaul Karim
Learning to trade is a life-long journey and every trader’s journey is unique. There are many things you will have to master, beyond knowing when to enter and exit a trade!
So, how Long Does It Take to Learn Trading?
On average, you could expect to learn to trade in 1-5 years. However, this number varies greatly with many factors, and some traders might never become profitable! One of the best things you can do to speed up your learning is to enroll in a good trading course, to learn from the mistakes of other traders before you make them yourself!
So, why does it take so long time to learn trading, and what can we do to speed up the process? Let’s find out!
Why Does It Take So Long Time To Learn Trading?
The first and most important of trading habits is to take decisions without being led astray by emotions and bias. Hard times during trading can really test the emotional maturity of a person. This is because the trading community is ruled by a contagious mixture of greed and fear. Those traders that can control their emotions can beat the crowd. Logically speaking, not giving into emotions seems pretty straight forward.
However, actually walking the talk at the moment requires strong nerves. This emotional control and lack of bias come from staying objective. Staying objective requires trusting the numbers and having contingencies planned before the event.
Separating the Signal from the Noise
Traders in the internet age are a click away from being bombarded with terabytes of information. However, information does not work on the principle of “more is better”. Too much information can lead to “Paralysis by Analysis” which is often the root cause of indecision. Therefore, a trader has to learn to differentiate the essential information from the useless. Doing so will save traders a lot of energy and time.
Unfortunately, separating the signal from the noise means it is more important to learn to ignore data. Knowing what to ignore, in a fast paced information flow, is a skill that is learned over time.
Building the Beeded Decision-Making Stamina
Traders have to learn to perform decision making, one of the most tiring of human activities, for hours every day without burning out. This decision making for traders comes with extra difficulty since they have to make fast paced decisions with incomplete information. Such intense mental effort can wear down even the best of novice traders.
Only through experience traders can learn to take the mental toll of the fast-paced and uncertain trading world.
With the help of algorithmic trading, you don’t need to sit by the computer hours on end. The computer trades for you, and you are free to do whatever you want!
Collecting Market Knowledge:
Apart from cultivating the required habits, a trader also to learn a lot about the market from a variety of sources. First and foremost, traders have to learn the unique dynamics of their specific markets. This can include local information such as subjective measures of volatility as well as seasonal movements in prices.
Building the self-awareness to have a strategy:
A trader can imitate a lot from other traders including technical analysis, preferred broker and even focus (in terms of markets). However, all traders have to come up with their own strategies. This is because no two traders have the same circumstances. One trader might be in his early 20’s and willing to make a risky bet on a Penny Stock while another trader with a family might be more risk averse.
Basically, every trader has to decide on the balance between risk and returns. This is one of the hardest tasks in trading. If you risk too much, you may get completely wiped out. On the other hand, if you risk too little, your returns will suffer.
How Do I Minimize the Time It Takes to Learn Trading?
Here are a few things you can do to speed up your learning!
Learn from Yourself
All traders learn from their own experience but few do it better through keeping a trading journal. Journaling involves noting down the trades of the day from a subjective written perspective and allows a trader to reflect on their decision-making process. Doing so you will continuously gain new insight about your trading and what is holding you back.
Get a mentor:
All great traders were once mentored by great teachers. Mentors answer questions that only experience can answer and lets you learn from their mistakes. Apart from being a good source of knowledge, mentors can also guide traders towards new sources of learning!
Socialize with other traders
In any field, socializing is one of the best ways to get out-of-context knowledge. This applies to trading as well, where traders may find answers to questions they didn’t ask. Socializing also exposes individuals to new ways of thinking about problems. Good traders know how to leverage unique perspectives of their social circle to come up with innovative solutions. These innovative solutions often become a competitive advantage in the long run.
A trader can socialize with other traders online or in person. Local investor conventions or online forums are good places to get in touch with fellow traders. Once traders decide their relevant niche, they can always join more specialized forums that will better cater to their market-specific questions.
Here is our list of the 20 best trading forums!
Testing new strategies using Demo accounts:
The world of trading offers many types of simulators to test strategies. Testing strategies on simulators can help traders in adjusting their strategies before committing resources to a market. This should be done when trying new strategies or trying new markets for the first time.
Take a course
You certainly can learn to trade without a course, but compared to if you had taken a course, it will take much longer time. Besides, the risk of failure is much greater! In fact, investing quite a large sum of money in a good trading course is an investment that will pay off quite quickly, if you enroll in the right course!
However, on the internet, there are many people who claim they know how to trade, and who even teach their methods. A majority of those, unfortunately, don’t know how to trade themselves, and are just looking to have you pay as much as possible for their scammy products. If you are looking to buy a trading course, it’s important that you are careful and scrutinize the work of that vendor to ensure that what you are getting is realistic. As always, if something is too good to be true, that’s also what it is, most times.
Go for Algorithmic Trading
If you are interested in learning trading, we definitely recommend that you go for algorithmic trading. It really is superior to discretionary trading in many regards, and by buying a few strategies from us, or other vendors, you can be up and running in no time!
Here you can read more about algorithmic trading!
Related reading: Do You Need To Be Smarter Than Average to Be a Trader?
Related reading: How Long Does It Take to Learn to Day Trade?