Learning forex trading from scratch

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How long does it take to learn forex trading and start making money?

That is one of those almost unanswerable questions. The reality is that everybody is different, and while some sharp-minded types can become successful traders within a matter of weeks, for others, the keys to success remain elusive forever.

So to answer the original question. There is no set time as to how long it takes to learn forex trading from scratch and be successful. However, you can learn the basic mechanics of forex trading in days, e.g. how to use trading software, how to understand the relationship between currency pairs, how to open and close positions, how to read charts (the fundamentals, at least) and so on.

But to achieve an advanced level of understanding, and to even consider investing more capital beyond your basic bankroll? That’s where there isn’t always a quantifiable answer.

A firm foundation

If you want to be a successful forex trader in the long term, you absolutely must take the time to learn the fundamentals – no matter how long it takes.

Of course, the temptation is to get out there and learn ‘on the job’, opening positions even if you’re not quite sure what you’re doing. That can be a costly mistake.

You wouldn’t build a house without getting your foundations in place, so consider that analogy as you start trading.

Take the time to learn more about trading software and which works well on your chosen device. You could check a review for ATFX, as one option, but there are plenty of alternative options from other brokers.

Play around with the software and see if it has a demo mode, where you can carry out ‘paper’ trades and learn more about how the markets move without any risk.

Chart sensation

To be profitable in the long run, you will need to take the time to learn how to correctly read the various charts and technical indicators – those trading ‘on feel’ alone are really up against it.

Don’t worry, this isn’t as complex as it sounds, and there are some fantastic resources online – both in the written word and on YouTube – that you can enjoy. So have a search around, and there’s no doubt that you will learn plenty in no time at all.

As a starting point, we suggest learning the basics of candlestick patterns – you will find lots of information about these free to read on the web, and it is more straightforward than it sounds.

Beware: Small samples

One of the common problems for new traders is when they embark on streaks early in their career – be it the feeling of invincibility that comes with a string of winning positions, or the misery that sets in when the market continually moves against you.

There is a danger of falling foul of the myth of small samples, which can be described as ‘beginner’s luck.’

To combat that, make sure you have a trading plan and record all of your trades – not just the monetary outcome, but the theory behind opening/closing the position and the decisions you took (and why).

That will build a log of longer-term evidence to suggest whether you are an improving trader or not – and whether you might have to go back to basics and refresh yourself about the fundamentals once more.