Some questions are far too subjective to command a definitive answer, including the one which asks “how long does it take to become a successful forex trader?”.
This is a frequently-asked question too, as most novice investors are attracted to the forex market by the derivative and margin-based nature of currency trading. This allows individuals to trade without owning the underlying asset while leveraging positions that are significantly larger than your initial cash deposit.
However, we’ll attempt to answer this question below, while asking how people measure their success as a forex trader.
Measuring Success as a Forex Trader
Success in the forex market is determined by numerous factors, while the innate volatility of currency trading makes it incredibly difficult to sustain long-term gains.
Similarly, the margin-based nature of currency trading can cause participants to lose considerably more than their initial deposit value, which creates an additional obstacle for investors to navigate.
Broadly speaking, the factors that influence your journey can be split into two different categories; namely those that you control and those that you don’t.
An example from the former category is the amount of time that you can commit to forex trading, both in terms of acquiring knowledge, honing your strategies and executing real money.
Certainly, people who adopt a structured approach to learning and can commit a few hours each day to forex are more likely to achieve success quicker than those who have much less time on their hands (we’ll have a little more on this later in the piece).
It’s also important to define success as an aspiring forex trader, as this can mean different things to different people. Make no mistake; success should be measured against the time and money that you’re able to invest in the forex market, in order to create manageable expectations that encourage responsible trading decisions.
How to Improve Your Chances of Achieving Success?
Once you’ve fully reviewed your circumstances, proposed schedule and the value of your capital holdings, you should establish clearly-defined objectives that enable you to map out your forex journey.
This can govern your projected returns within a predetermined period of time, while also creating a plan for diversifying your interests and minimising market exposure over time.
At the same time, you should identify a fixed amount of capital that you’re able to invest every week or month. This ensures that you never invest more capital than you can afford to lose, creating a more solid foundation on which you can build long-term success.
When it comes to optimising the learning process, we’d recommend dedicating a period of three to six months to using a demo account or investing a free trading bonus in the market.
This allows you to test your strategies in a simulated, real-time market, while you can also experiment in this type of risk-free environment, creating an opportunity to plug any existing gaps in your theoretical knowledge.
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