Dear traders, some traders hear that success can be achieved overnight, whereas other traders find out that it takes 10,000+ practice hours.
I’m sure you have seen experts and “gurus” advocate for both sides: either the quick success or the need for hard and long working hours. Which one is really true?
This article will explain that both are in fact a myth. We will debunk the false ideas and explain what path is needed to learn how to become a successful Forex trader. (Video is at the bottom)
Get rich schemes flood the internet via ads, emails, and product placements. Forex is an often misused vehicle for such ploys as it offers traders highly leveraged instruments.
Ads will show unrealistic expectations where traders can win big and earn a hot sports car by simply winning just one big trade. This is gambling, not trading. You can win a sports car in Vegas, too, with the same amount of luck.
Learning how to be a successful Forex trader in Forex is unfortunately not that simple. It requires practice, active learning, persistence, patience, and mentoring.
The entire process takes TIME. Why? To build focus, education, persistence, dedication, and experience.
Some traders think they can learn in it 1 day while others think it will take 10,000 hours. Learning experts often refer to the study that coined and popularized the idea of requiring 10,000 practice hours before achieving success. But is it true?
In our view, the number of hours is not an ironclad guarantee for mastering any particular skill, including how to become a successful Forex trader.
In fact, it could become a seriously dangerous goal if traders start to chase this magical number of 10,000 without really using those hours properly. You might start training with no real direction in sight or in mind.
But, you might be wondering, what about Olympic athletes and celebrated musicians?
Sure, they probably have spent more than 10,000 hours playing their favourite sport or music instrument… But the real question is, what did they do with their time?
Did they succeed due to the time investment? Or was it due to other factors like focused training?
Image: simple charts are often better, this image shows EUR/USD 4 hour chart with 1 oscillator, 2 moving averages for trend and trend lines for breakouts.
Working long trading hours just to hit the goal of 10,000 hours is bending and misusing the learning curve. Sitting behind the screen non-stop is also not necessarily the most efficient method for learning to trade.
What does work well?
The answer is not “practice makes perfect” but “perfect practice makes perfect.” Yes, the key to learning is consistent, concentrated improvement.
You need to practice with a clear goal in mind and practice “deliberate practice”, which is a focused training with aim of improving.
Experts have managed to become experts in their fields because they:
It is vital that you, the trader, learn to apply small incremental improvement points each step along the way. Never miss the opportunity to learn and break the old routine and exchange it for a better process.
The 2014 paper on “Deliberate Practice and Performance in Music, Games, Sports, Education and Professions: A Meta-Analysis” by Macnamara and others concludes that “individual difference in performance is reflected by the difference of deliberate practice.”
They found that “deliberate practice explained 26% of the variance in performance of games, 21% for music, 18% for sports, 4% for education, and less then 1% for professions”, adding that “deliberate practice is important, but not as important as has been argued.”
We suspect that trading is in the same group as music and sports: deliberate practice is important but not everything. What else could play a role?
Although focused practice is an important part of the process, it also matter what you focus on. If you study 5000 hours of moving average crossover systems, your efforts will be wasted because the system is useless.
Traders should really focus on learning to recognise, read, understand and interpret price patterns. They will always improve your analysis and trading system because they provide key information about price swings move and how the larger market structure behave.
Only analysing trend or support and resistance does not provide the same level of detail and depth that patterns can provide. Price patterns will provide the balance needed for any trading system as follows:
Price patterns help estimate how to avoid weak trade setups, when to enter, when to exit and how to manage open trades. The best price patterns are:
Price patterns work because they repeat on all time time frames and markets and are essential to any trading system. Patterns are the most important ingredient when analysing the market structure.
A successful Forex trader spends a ton of time focused on learning patterns and market structure. Fully focus on learning how corrective waves work and how they break. This is actually valuable experience.
Deliberate trading is only one aspect.of the equation. Learning the right material is the next step.
The third part is voluntary but will help accelerate your learning curve: follow the guidance of a professional in their business who will offer a clear road map and feedback.
Simply said: if you are interested in playing violin, ask the violinist for his guidance. If you want to be a successful Forex trader, find a professional Forex trader and seek their advice.
Why is this important?
Successful Forex mentors can offer 3 key skills:
A trading journey is a like a marathon, not a sprint.
Some traders will be quicker than others but all of us can improve our odds of becoming consistently profitable if you are mentored or coached by a pro trader (or at very least someone with more experience than yourself).
The mentor, however, will not perform magic. You still need to implement and learn from the lessons yourself.
Also, be careful that your personal style matches with the coach. Everyone has their own preferences, and you need to make sure that you feel comfortable with the new methods.
How do you find truly successful Forex traders?
We recommend doing some of these 9 evaluation steps to help make this judgment:
The conclusion is simple: your trading strategy is not your biggest ally nor is it your biggest weapon.
The most important is the cycle of feedback:
Step 4 is important as it allows traders to automate areas where you are doing well. The same happens when you learn to drive a car: at the start everything is new and deserves your attention. Eventually, certain tasks become routine and you can do them automatically, like shifting gears or turning the steering wheel.
As mentioned earlier in the article, every trader has their own personal style. You need to find a mentor that will suit your own natural way of tackling the Forex and financial markets.
The two main choices within technical analysis are:
Once you found the right style and mentor, then it’s time to make progress with the rules and guidelines of the trading system or method. Do not start from scratch, but rather keep pushing forward.
Here are the 7 main steps to learn day in and day out:
What do we mean with handle the plan?
Having a trading plan will create a trading bias, which in turn creates emotional ties to your analysis and trades. Traders should not remove emotions but rather learn how to handle them. Ultimately, trading is using that bias only when your bias is right.
The steps mentioned in this article will help you find the correct process to become a professional trader. It becomes a lot easier to succeed if you actually like your method of trading because learning becomes fun (or at least not annoying).
Of course, feel free to continue your journey with us – Nenad and Chris – at Elite CurrenSea but this is not the goal of the article. Our main job is that you find trading success. We are just as happy if you succeed with our trading systems or someone else’s.
We are confident that if you apply the lessons we teach, there is a good chance of finding trading success. Dozens of traders reach out to us each trading week thanking us and showing their success, here is one example of a trader in the image below.
Image: a trader is happy with his help from Nenad.
Nayvin used Nenad’s work via Admiral Markets webinar and made $15,000 over the summer using 1 min scalping. We are happy to be part of his success and his ability to find:
“Freedom Through Trading!”.
Remember, the key is to avoid a false start and not lose perhaps a couple of years chasing a goal – mindlessly – with little relevance (like the 10,000 hours).
Simply said: do not waste too much time with reinventing the wheel yourself while others are driving cars on the expressway. 🙂
Many green pips,
Nenad and Chris