People often wonder how long it takes to become a consistently profitable trader. Some say it can be done in just a few months while others claim it took them years. What should be your expectations on how long it takes to become profitable?
The answer to this question is complicated. Malcolm Gladwell, the author of a blockbuster book “Outliers”, states that it takes 10,000 hours of intense practice to master a complex skill. Progress takes time, and that is especially true when it comes to day trading. Learning to trade well is not an easy task. There are many things one needs to learn: how to develop a trading plan, how to manage risk, how to read the tickers, and so much more. Additionally, there are many things to learn on the technical side of things, for example, automation options within your broker’s platform and key shortcuts that you can take advantage of to make your trading process faster and more efficient.
Day trading is a complex skill that relies on many things. If two people with different backgrounds and mentality types attempted to follow the same strategy, the results of their trades would differ. One thing beginner traders learn right away is that so much of day trading depends on human psychology and personal triggers. After all, humans respond to stress in unique ways. This is why the simplest and most basic advice, “stick to your trading rules”, is so incredibly hard to follow. Fear plays a huge role in how people act.
This is why it’s impossible to estimate how long it would take to become a profitable trader. The answer is different for each person, and it depends a lot on their psychology, background, and abilities.
Moreover, the market changes all the time, requiring people to learn new things and adapt their strategies accordingly. This is why even the arbitrary number of 10,000 hours should be taken with a grain of salt.
Having said all that, it is still important to acknowledge the role of talent, discipline, and being a quick learner. Some people manage to have a green PnL in their first year or first couple months. However, that is more of an exception rather than a rule. This is why we encourage the new traders who use Cobra Trading to seek education continuously and prepare themselves to face a learning curve. It will take time to find consistency, and then will take more time to improve on it.
It is also helpful to have a seasoned mentor. When looking for role models and mentors, seek out people who have been trading on the market for a long period of time. The market has its seasons and cycles, and day traders who have more experience tend to have more insight to offer.
Many proficient traders also agree being focused on the process for the sake of the process makes it easier to stay consistent. It is much harder to remain impartial and unemotional when considering how much money you have won or lost in a trade. Disassociating from a number you see on the screen seems to help people trade with a clear head and stick to their rules.
And as you figure out your day trading specialization, rules, and preferences, we encourage you to take all possible steps in order to protect your account from mistakes that may happen along the way. Make sure to have a risk management plan in place and consider demo trading as a free way to practice.
And if you need more resources, Cobra Trading is here to help. We have a regularly updated blog where we share information about day trading, as well as a Youtube channel where we share educational videos. If you’d like to open an account with us, reach out to our customer service team today, and we’ll be happy to help you!