Trading in financial markets is considered one of the attractive and profitable opportunities in the world of digital economy. However, it’s important to know that most people who start trading end up leaving the financial markets with losses. One of the main reasons for the failure of individuals in the financial markets is the lack of sufficient knowledge and experience.
Becoming a successful trader cannot happen overnight. It requires gaining knowledge and experience. Learning the basics of trading can take between 6 months to a year, but learning alone is not enough. Experience is the key in financial markets.
In the following sectionsπ, we will explore the factors that influence the time needed to become a trader. These include soft skills, market understanding π, technical analysis π, and the importance of risk management π― so that you can embark on your trading journey with full awareness.
How long does it take to learn trading?
The journey to becoming a trader and learning trading is highly variable and depends on the individual learner. This time can vary based on various factors including experience, effort, practice, and commitment to learning.
Here are the main factors that can influence the time required to learn and become a professional trader:
Self-awareness
Self-awareness in trading means understanding your strengths and weaknesses, psychological abilities and limitations, and accepting and controlling your emotions and decisions when facing risks and opportunities. These factors are what lead to the success or failure of all traders.
To be more specific, these factors actually define the difference between an analyst and a trader. Many people are considered good analysts in financial markets..
However, when it comes to taking action and investing their money in the market, they become completely different people who do not even stick to their most basic principles.
πExample 1: Imagine you have mastered technical analysis and even designed a personalized trading strategy. For instance, you open your trading position after seeing your strategy signal on the Bitcoin chart.
The market then moves against your prediction, and as it approaches your stop loss, instead of reassessing the new conditions, you might stubbornly stick to your initial analysis and lower your stop loss to avoid activation.
In most cases, this leads to a greater loss of your capital. Now, imagine in this example, you do not intervene with your stop loss and it gets activated. You even open a position in the opposite direction of your initial trade. If this situation is not driven by excitement and is based on analysis, it can help you recover your loss and even make a profit.
πExample 2: Suppose you have bought an asset like Ethereum and its price is rising. Based on your trading style, you have set a profit target. The price is approaching your profit target, and according to market trends, good news is also being released about Ethereum.
In most cases, this situation tempts you to not stick to your analysis and wait for the price to rise even more. If you don’t remain faithful to your analysis, the market might drop below your profit target after the growth, and because you are not ready to accept the new situation, you wait for the price to rise again, unaware that all your profit will disappear in the end.
βοΈConclusion: There are many examples to understand the importance of developing a trading personality. In both of the above examples, the person is proficient in analytical topics but exits the market with a loss.
So, first, think about which of the above factors could harm you on your trading journey. After gaining some awareness of your emotional state and improving them, you can now take steps to continue learning trading. Be sure to seek advice from experts in this field.
There is no set time for how long this will take, as it can vary greatly between individuals. Additionally, trading psychology is one of the aspects you need to work on from the beginning of your trading journey until you continue trading, to strengthen and control yourself.
Familiarity with Different Financial Markets
In the financial world, each market has its own unique characteristics and features that you need to understand well to succeed. For example, if you decide to enter the cryptocurrency market, you should carefully analyze whether this financial market suits your initial knowledge and capital.
And you need to know which platforms they are traded on and which websites you can use to see the real-time and accurate charts of these cryptocurrencies. Additionally, before entering the financial markets, you need to familiarize yourself with the platforms and tools used for receiving and transferring money.
Moreover, the price behavior and reaction of each token and currency to news and events are different in various markets. This is also true in technical analysis.
For example, the head and shoulders pattern in lower time frames usually continues if completed in forex markets, but in the cryptocurrency market, this pattern has a high error rate and in many cases, the market changes direction after the pattern completes.
βοΈConclusion: Since this work involves research and study, it might take some time. However, you can save time by searching credible sources. Consulting with an experienced person in this field will greatly help you. On average, this part requires at least one month of continuous work.
Choosing a Trading Style
At this stage of your journey as a beginner trader in the world of trading, it is essential that you recognize your strengths and weaknesses in sensitive situations as well as the behavior of the market you are interested in.
Considering these insights, you need to choose your trading style, one of the most crucial decisions being the selection of your trading time frame. For instance, if you are an impatient person, you might engage in scalping trades on lower time frames.
To choose the suitable option, you can refer to the article “What is the Best Type of Trading for Beginners?“
Now, if you are not only impatient but also highly stressed, you should add another filter to your trading style. For example, let the market enter a range, the trading volume decrease, and during that time, only perform swing trades to avoid witnessing powerful price movements.
πRemember, the secret to the success of the world’s top traders lies in not trading most of the time and entering safer positions.
βοΈConclusion: If you have correctly completed the previous two steps and conducted thorough research and analysis, it probably won’t take long to figure out which time frame and which Trading style suit your temperament. You will need about two weeks.
Learning technical analysis
After selecting a trading style that suits the timeframe in which you can achieve better returns, you can now start researching various analysis methods in financial markets. Find a method that works within the timeframe youβve chosen and helps you reach profitable outcomes.
Why should we learn the analysis method after choosing the timeframe? Because some analysis methods are not suitable for trading in short timeframes and may not deliver desirable results.
Therefore, selecting the right timeframe and then learning the appropriate analysis method is a crucial step towards success in financial markets.
For example, many people prefer the price action style over classic technical analysis for short-term trades, as this analysis method can be more profitable in different market situations.
However, keep in mind that in this case, you need to continuously monitor the market to react promptly and take advantage of available opportunities.
βοΈConclusion: Choosing and mastering an analysis style is one of the tasks that can guarantee success in financial markets. Typically, learning technical analysis takes at least 6 to 9 months and requires dedicating a significant amount of time for practice. With increased practice and persistence, one can achieve a deeper understanding of the market and consequently make smarter decisions.
Learning the Tools Needed for Trading
To increase the success rate of your trades, it’s essential to master the four pillars of trading: Technical Analysis, On-Chain Analysis, Fundamental Analysis, and News.
Each of these pillars requires one or more platforms to analyze data, and you must become proficient with the tools each platform offers.
For example, if you choose TradingView for Technical Analysis, you should learn how to draw Fibonacci retracement levels on it. Similarly, for On-Chain Analysis, you need to be familiar with the indicators used to check market conditions in various situations. At this stage, you should also enhance your technical knowledge.
βοΈConclusion: This stage is closely tied to your trading strategy (the next step). However, mastering the indicators, tools, and parameters you need will take at least one to two months.
Developing a Trading Strategy
This stage is essentially the result of all the previous steps; at this point, you should enter the market with a demo account or a small amount of capital to test the strategies and analyses you have learned.
The goal is to continue reviewing and refining your methods until you develop a profitable strategy and ultimately arrive at a trading system that yields profits in the market.
Remember, your strategy should be personalized, and even a successful trader’s strategy might not be profitable for you. After testing and tweaking your strategies, choose the one that gives the best results.
Itβs a good idea to have separate strategies for a volatile market with sharp price movements and write them down in your notebook.
You need to have a personal plan for situations when the price approaches your stop loss or take profit levels, and set some red flags for yourself and note them down.
Additionally, you can define the minimum risk-to-reward ratio for entering a position in your trading setup. If the risk-to-reward ratio of your position is lower than this threshold, you should not enter the trade.
Capital management should also be included in designing your trading strategy. For example, how much of your capital will you allocate to high-risk assets, and how much to low-risk ones? Write it down.
Make sure to always keep a portion of your capital in stablecoins or cash so you can use it when attractive prices are available. This is also very important when buying in steps.
βοΈConclusion: Since this stage represents everything you show yourself to be in the market, itβs best to spend enough time on each part. From my perspective, testing different trading strategies and selecting the best ones requires at least two months of backtesting. Then, designing personalized trading strategies considering different market conditions takes at least one month.
Conclusion
A question that is often asked by people who want to choose trading as a side job or even their main profession is how long it takes to learn this skill. In this article, we have tried to provide a comprehensive, realistic, and experience-based answer to this question and to estimate the time needed to learn trading. To achieve profitability and success in trading, you need to spend time, get educated, trade, experience gains and losses, and learn from your mistakes. This way, you can become a professional and successful trader.
If you have experience in trading that can help beginners who are interested in learning to trade ππ, please share your thoughts with us. Also, share this article with friends who want to learn trading. π£
FAQ
How can we become traders?
To become a trader, knowledge and experience are the two essential components. In this path, you need to familiarize yourself with financial markets, become acquainted with the tools necessary for trading, and find your suitable style and strategy. Finally, you must gain experience in different market conditions and address your weaknesses.
How long does it take to learn trading?
The answer to this question depends on various factors and varies from person to person. Certainly, you need to invest a considerable amount of time to learn and gain experience. Individuals’ background knowledge of financial markets, trading tools, and self-awareness can significantly shorten this path.
Is learning trading equally time-consuming for everyone?
No, the time required to learn trading varies for each individual. Experiences, financial background, and educational background can influence the speed of individuals’ learning.
How can I accelerate the learning of trading?
Choosing credible resources, participating in trading communities, and consistent practice with a demo account can expedite the learning process.