It is quite common to hear aspiring traders ask the question: “How long does it take to learn Forex trading?” It’s a question anyone interested in the forex market would want to see answered. After all, who would want to strive to learn a new skill without knowing how long it would take to achieve proficiency in the skill.
To answer the question, one needs to consider many things, as the time it takes to master forex trading skills and become a profitable trader depends on a lot of factors. As an aspiring trader, you can control some of those factors with your effort and determination, but there are a few that would be out of your control — hence, the need to be realistic with your expectations.
While some people may learn the skills in a few months, others may do so after several years of consistent hard work. Learning forex trading is a personal journey. What matters is whether you’re ready for it. So, in this post, we will discuss the following:
- The questions you should ask yourself to ascertain your readiness to learn forex trading
- The key areas to focus on while learning the skill
- The average timeline for learning the skill
- How you can fast-track your learning
The questions to ask yourself to know how ready you are to learn forex trading
Forex trading is often presented as an easy way to make money, so it’s not uncommon for people to want to try it out. Many of those people would surely give up along the line when they find out that it is not as it seemed. For someone really serious about learning how to trade the forex market, there are some questions you need to ask yourself to know if you are ready for the journey you’re about to embark on.
Do you have a passion for forex trading?
This is the first question you should ask yourself and answer it sincerely because, far from what you have been told, forex trading will not buy you an oceanfront holiday property in the next few months — many years later, it might if you’re committed to learning the skills and consistent in applying what you’ve learned.
Deep down inside of you, do you love forex trading? Do you enjoy listening and analyzing global political and financial news, as well as dealing with numbers and graphical charts? Your passion is what will carry you on when the going gets tough. If you’re interested in forex trading because of money, the chances are very high that you will get frustrated down the line and give up before you even learn the most important skills required to succeed in the game. The fact remains that forex trading is the hardest way to make easy money.
Are you ready to put in the effort required to learn forex trading?
Learning to trade the forex market requires a great deal of effort. Are you ready for it? In the beginning, you will be studying a lot of materials, including books, audio content, and videos, and may also have to attend seminars, webinars, or enroll in a planned coursework.
Later, you will start studying charts and practice trading by yourself. Here, you will have to consistently open your chart on every trading day during your chosen trading session and analyze the price movements, place trades, and monitor how the trades develop. You must be ready to put in the effort to do all that is required to attain the skills you aspire to have. If you’re not consistent, it will delay your learning curve, and you may not eventually acquire the skills you seek.
How much time are you ready to commit daily?
Surely, you must be able to dedicate some time every day for learning how to trade the market. The question now is how much time do you have to commit to achieving your goal? If you work full-time and also have some kids to take care of, you may not have enough time to commit to your learning, so it will take you longer to acquire the skills you seek.
Compare that to someone who does a part-time job and has no children. This person may be able to commit more than four hours to practice trading on a daily basis, and all things being equal, will likely learn the skills faster than the former. However, whatever time you can commit daily, what matters the most is consistency. As with any skills, if you are not consistent, you lose the little you’ve learned.
Are you ready to invest in your forex trading education?
This could be what makes the difference between becoming a successful career trader and one more person who tried his luck with forex trading. Investing in a forex training course will not only hasten your learning curve, but it will also afford you the opportunity to watch expert traders analyze the market, identify trade setups, place trades and manage trades live.
So, this is something you may want to consider seriously. While there are many failed traders selling trading courses that are not tested and trusted and even making promises that are too good to be true, if you can enroll with the right school, such as the Pro Trading School, you would’ve hastened your learning curve by a lot.
The key areas to focus on if you want to learn forex trading
Sure, you’ve asked yourself all the right questions and have all your answers. So you are ready to embark on your forex trading journey. But then, what are the things you’re meant to learn, and which areas do you focus on?
Here are the core aspects of forex trading that you have to learn in your trading journey:
- Trading basics
- Trading strategies
- Trading psychology
- Record keeping
- Evaluations and modifications
In whatever thing you learn in life, it pays to start from the basics. Even in your formal education, you didn’t start with the university; you first passed through elementary school and then secondary school before you made your way to the university. The same applies when you want to learn forex trading.
But what constitutes the basics in your forex education? They include the following:
- Forex trading terminologies
- How the market works
- Trading platforms
As with any field, there are unique terms that are frequently used by forex traders, which laypeople may not understand until they learn what they mean. So, as a newbie, it makes sense if you learn them first because it will make it easier for you to understand whatever material you’re using for your learning. Even if you enroll in a trading school, I bet that forex terminologies would be the first thing you would be taught.
Some of the terms you will learn include the following:
- Bulls/bullish: buyers/ buying inclination
- Bears/bearish: sellers/selling inclination
- To go long: to buy
- To go short: to sell
- Pip: a unit of price movement
- Lot: a measure of the currency unit traded
- Ask price: the lowest price a seller is willing to sell
- Bid price: the highest price a buyer is willing to buy
- Margin: the amount you must have to open a trade of a particular size
- Leverage: the factor by which your margin can be multiplied to carry a trade bigger than your funds
How the forex market works
Another thing you will learn at this stage, along with the terminologies, is what the forex market is all about and how it works. The forex market is where people exchange one currency for another for many different reasons. For us, the retail traders, the reason is just to profit from fluctuations in exchange rates.
There are many players in the market, including central banks, commercial banks, investment houses and hedge funds, big corporations, and of course, you, the retail traders. The activities of these players in the market make the exchange rates to fluctuate, creating opportunities for you and me to make profits if we buy low and sell high or the other way round — sell high to buy low.
At this stage, you also need to get a basic knowledge of the common trading platforms you will be using to trade. These are online systems that connect your trading inputs to your broker and from there to the marketplace if your broker is not a market maker. Almost every broker will provide you with one or more trading platforms to practice with once you register with them, even before you’re ready to deposit your trading capital.
The most popular platforms out there are the MetaTrader platforms (MT4 and MT5), TradingView, cTrader, and others. You have to get a basic knowledge of the ones you will be using and as you’re practicing with a demo account, you will keep learning more features of the platforms.
After learning the basics, it’s time to learn how to identify tradable opportunities in the market, place trades, and manage the trades. By doing so, you will begin to learn what works and what doesn’t work and then develop some strategies for trading the market. The key things at this stage are analysis (both technical and fundamental analyses), risk and money management, trade management, and building a comprehensive strategy.
The trading platforms have price charts where you can study previous and current price movements. There are also a plethora of indicators that you can use to interpret the price movements. Analyzing price movements — either on their own (price action analysis) or with the help of indicators — to predict how the price may move in the future is called technical analysis.
There are tons of free online content (both written and video) that can teach you how to perform technical analysis. If you enroll in a paid trading course, you will also be thought how it is done.
This is another way of identifying trading opportunities in the market. It involves interpreting economic data, news, minutes of central bank meetings, and political events to forecast the kind of impacts they can have of different currency pairs. The idea is to enter a trade before most of the expected effect on a currency pair occurs.
While some traders, especially those with an economics background, may trade based on fundamental analysis alone, many traders combine it with technical analysis. Interpreting the potential impact of certain economic data may be difficult, but some trading forums, such as Forex Factory and Investing.com provide a basic interpretation of those data with color codes.
Risk and money management
The main factor that will determine how long you will last in your trading journey and the likelihood of achieving success is the way you manage risk and protect your trading capital. Thus, money and risk management is one aspect of trading you need to learn, practice, and make a part of you.
You will learn how to determine the amount of money to risk per trade (generally, 1% of your trading capital), where to place your stop loss order, and how to calculate your trade size (lot size) using your risk amount and the size of your stop loss.
Trading doesn’t stop at finding a good opportunity, placing a trade, and putting a stop loss. You have to plan for your exit and how to manage the trade. In fact, knowing how to manage your trades and when to close your position may be as important as managing your risk, as it determines how much you will make from any trade and whether a winning trade can turn to a losing one.
So, you need to learn how to place profit targets, when to move your stop loss to breakeven, and how to trail your profit. You will also learn about reward/risk ratios.
Developing a suitable strategy
With all you have learned, you will have to create a few strategies you can use for your trading. A comprehensive strategy will include how you identify trading opportunities (analysis), how you manage risks (stop loss), and of course, how you manage your trades.
When you’ve created a strategy you’re comfortable with, you have to back-test it on your chart with previous price bars. If the strategy looks promising, trade it consistently on a demo account to see how well it performs on current price data.
You trading mind
Trading psychology is what makes a trader a trader — the ability to think in odds and probabilities. Many can create amazing strategies and make a lot of money on a demo account, but only a few can properly implement their strategies in a live account when their money is on the line. What makes the difference is the ability to have the mind of a trader and control those emotions that cause them to make execution errors.
The common emotions you need to control when trading are:
To develop your trading mind, you need to read books on trading psychology, such as ‘The Disciplined Trader’ and ‘Trading in the Zone’, both written by the legendary Mark Douglas, and ‘Tradermind’ by Steve Ward. Another good book is ‘Thinking, Fast and Slow’, by Daniel Kahneman.
Reading books alone won’t be enough for developing your trading mind and being able to control your emotions during the heat of the moment. You can only achieve that from practice when trading live account and putting money on the line. But you have to start with a small amount first by trading a Nano or Micro account.
As you get used to trading small amounts without your emotions getting in the way, you gradually increase your trade size. When you’re good with the new size, you increase again and adapt to the new size. Just like that — increase, adapt, increase again, and adapt.
Another key aspect of forex trading you must learn is the habit of keeping records of your trades. For this, you need a trading journal. While some trading platform have a trade journal section where your trading history is stored, it makes sense to have a physical journal where you manually record your trades.
For each trade you place, you should record all the parameters in your trading journal, such as:
- The criteria for the entry
- Your entry price
- Your stop loss level
- Your profit target
- The outcome of the trade (profit or loss)
- How the trade was closed — manual closure, profit target, stop loss
Evaluations and modifications
This is the aspect of trading that would help you to improve your trading strategy. It involves analyzing your previous trades after a specified sample size is reached to see how well your strategy is performing and the areas that need improvement.
Here is where your trading journal is needed. You evaluate the outcomes of your previous trades, especially the losing trades, to know whether there were things that could have been done better. Learn the lessons and modify your strategy accordingly.
So, what’s the average timeline to learn forex trading like?
As you can see, what to learn is much, and moreover, learning what is involved is different from mastering the skills, which is an on-going process — the more you practice, the more you acquire the skills. As long as you’re trading, you’re getting better at the skills.
Although the learning curve is different for each person, here is what to expect on average:
- 0-4 months: This is the period most people learn the basics and start practicing with a demo account, learning the important features of the trading platform, such as how to place trades, the order types, and how to set stop loss orders and profit targets.
- 4-8 months: Within this time, many new traders learn how to analyze the charts, read economic data and get their basic interpretations, know where to set their stop loss orders and profit targets, learn how to calculate their risk parameters, and finally, develop and test their strategies on demo accounts. This is also the stage to learn the habit of keeping records and evaluating your trades after a certain sample size is reached.
- 8-12 months: By this time, most prospective traders would have gone live. It is a period to learn trading psychology by exerting control over your emotions when you trade. So, it’s better to start with a small amount and progress as you develop more control over your trading emotions.
However, this timeline is only an estimate. Each individual is wired differently and exposed to different environmental factors that can affect the learning curve. The timeline may be shorter for you, especially if you’re learning under the guidance of a good trainer, like the Pro Trading School. It can also be longer, especially for those who wish to learn by themselves.
But instead of focusing on how long it will take you to learn, you will be better off if you put your mind the things that matter — which are the key things you need to learn to become a good forex trader, how to consistently implement what you learn, and how to master your emotions when trading.
What will determine how well you do as a forex trader is not how fast you can learn the basic trading skills but how you are able to stick to your trading rules. So, the timeline that matters is how long it will take you to understand the importance of keeping to your trading rules and be disciplined enough to always stick to your trading plan.
How to fast-track your learning
Now that you know the average timeline for learning forex trading, let’s take a look at some of the things you can do to fast-track your learning.
Demo-trade from day 1
Right from the very first day you start learning how to trade, open a demo account and play around the trading platform. This way, you get familiar with the platform and start learning its features and functionalities. You may also start learning, albeit subconsciously, how to read price data, which can hasten things when you start learning price action analysis.
Enroll in a course
It is a known fact that you can shorten your learning curve if you learning under the guidance of an expert. However, not all trading courses are worth a dime. If you want to enroll in a trading course, make sure you choose the one that is worth your money. Don’t go to where they just show you trading signals; it must be one that teaches you how to analyze the market and arrive at the trading signal.
Join a traders’ forum
There are many trading websites that have traders’ forums where traders discuss and share their ideas about trading. Examples include Forex Factory and Investing.com. You can find highly experienced traders on such forums. Take your time to study the post of the different members of the forum to identify those with a similar trading style as yours. Those are the traders to focus on and share ideas with.
Focus on material about your preferred style
When studying books, trading blogs, and YouTube videos, focus on the ones that discuss your trading style. If you prefer day trading, look for materials that discuss day trading strategies rather than how to swing-trade the market.
Go live early with a Nano account
The ultimate test of your trading skills and emotional maturity is trading on a live account. So, the earlier you’re exposed to the real thing, the better. Once you learn how to use the trading platform and are able to develop a trading strategy, you can start trading on a live account but start with a Nano account where you risk only cents per trade. This will help you master your trading emotions faster.
As per the basic skills, you can learn forex trading in less than a year. However, mastering the skills to become a successful trader is a journey that never ends. Each time you trade, irrespective of the outcome, you’re learning something new — a new skill, a new concept, or a new piece of knowledge — that would shape your experience in the journey. What matters is how well you learn and not how long it takes.