As with many individuals who become aware of trading, one question you may have already asked yourself is: can I get rich trading forex? As with many other professionals such as engineering, medicine, legal, finance, and as with other specialties of trading such as stocks, options, commodities, and cryptocurrency, accumulating wealth in trading forex is not unheard-of.
It Is possible to accumulate riches by trading forex; just as it is possible to attain financial ruin whilst in pursuit of such riches. Therefore, it is important to note that the thought of riches in trading forex, or any other market, should only be entertained after a certain degree of proficiency has been attained.
The forex market (or any other market) cannot make you rich; you make yourself rich by consciously engaging in the markets.
Is Trading Forex Gambling?
Oxford dictionary defines “gambling” as ‘the activity of playing games of chance.’ Collins’s dictionary defines “gamble” as ‘a risky action or decision that one takes in the hope of gaining an outcome.’ It goes further to define “hope” as ‘wanting something to be true or to happen, and believing that it is possible.’ The keywords of interest are: chance, risk, hope, want, and believe.
No; the act of forex trading, when approached professionally, maintains very little resemblance to gambling. The latter is conducted with the primary objective of deriving entertainment; the gambler operates without defined risk, and simply hopes for favourable outcome. The professional trader acts on defined risk, probabilities, and knowing the odds of any series of actions.
The professional trader understands the likelihood of a series of trades being favourable or otherwise, and simply focuses on executing each trade to the best of ability: as to realize any predefined, favourable odds. On the contrary, the novice trader does not define risk, and simply acts wild and irresponsibly: though wanting positive outcomes.
The professional trader is no gambler; but the typical novice trader is worst than a gambler. If nothing else, the gambler derives entertainment from wishful thinking. The typical novice trader derives nothing but pain and grief, partly due to lack of knowledge.
Can I Learn Forex Myself?
Learning how to trade any market presents an exciting yet challenging set of responsibilities. It is common for the new trader to underestimate the degree of dedicated learning that need be undertaken.
Yes, most aspiring traders can attempt learning how to trade forex (or any other market) as a solo mission; but the plain reality is that only a few succeed at such attempt. There are several reasons behind this; but in a nutshell, one may underestimate (on an individual level) the depth of learning required, one’s position in relation to addressing learning requirements and the trade-offs necessary to meeting individual learning requirements.
Perhaps one of the most important considerations to bare in mind, with regard to learning forex alone, is that one could actually dedicate time and resources into learning inappropriate things.
How Long Does It Take to Learn Forex?
An important fact to remember is that learning the markets is an individual pursuit, and there is no universally acceptable time limit to which new traders should work towards.
Some beginner traders take less than a year to grasp a lot of what they need to learn, and soon begin to experience consistency. Some others, however, spend over a decade on their learning journeys, and still don’t reach consistency. In reality, new traders who are truly intent on learning and development must be prepared to commit, at least, two years towards such endeavour.
Aspirants who are not prepared to dedicate time and other resources towards learning forex (or any other market) need not consider starting.
How Do I Start Learning Forex?
Upon decision to actively pursue trading as a path of interest, many beginner traders go in search of multiple trading methods (strategies, tactics, etc.), and then move straight to trading charts, in hope of immediate riches. That approach is inappropriate for many individuals, and actually harmful for some others. Before you start your learning journey, you must wholeheartedly acknowledge that there are a lot of things for you to learn, and a lot of development to be experienced.
The majority of things you will learn along your journey can be grouped into five broad categories: (1) self-assessment and personal adjustments (SAPA), (2) trading psychology, (3) market knowledge, (4) trading methodologies, (5) trading execution. Learning within some of these categories will be ongoing, for as long as you trade.
You start your learning process by conducting a ‘general self-assessment, and adjustments.’ More information about this process is available here.
Once you’ve finished with the aforementioned category, you must begin working on your trading psychology; this is crucially important. To commence with this requirement, you’ll need to engage in some reading, notetaking, and reflections. From experience, there are three books which are absolute essentials at this stage, and should be read at least twice a year (for a few years).
The first of those essential study materials is a book named ‘reminiscences of a stock trader’. It provides the beginner trader with an excellent overview of the different facets of a trader’s journey.
The second of those essential study materials is a book named ‘trading in the zone’. It provides the beginner trader with a good understanding of the various aspects of psychological traits that could hinder trading progression and success.
The third of those essential study materials is a book named ‘the disciplined trader’. Although sharing some similarity with the second read, it provides additional insight into various aspects of psychological traits that could hinder trading progression and success.
Various aspects of the other three generic categories are to be explored separately.