How long does it take to learn how to trade stocks?
It’s a question I get asked frequently and to be honest, I don’t know the answer. Why? Because the answer is actually different for every trader.
Some will claim that it only takes a few weeks to master.
Others will say it takes several months.
Others still will say it takes years or even decades.
Who do you think is right?
How Long Does It Really Take To Learn How To Trade Stocks?
Let me start this article off with my answer: It depends…
Every trade is going to have a different learning experience. This depends on things like risk tolerance, trading goals, and your investing horizon.
In this article, I can promise I will give you MY answer on how long it really takes to learn how to trade.
Here’s why I say, ‘it depends.’
You can make trading as simple or as complicated as you want.
In my mind, it depends on these three factors:
- What asset are you trading? Stocks, options, futures, or forex?
- Are you using fundamental or technical analysis to trade?
- What is your timeframe for trading? Day trading? Swing trading?
Let’s start with talking about these three factors:
What Do You Want To Trade?
The easiest asset to trade is always going to be stocks. They are simple to understand, and the price of one share is one share.
What do I mean by that? If you buy a stock for $100 and the price rises to $101, you make $1.00 per share. If you have 100 of those shares, you make $100. Making sense?
But when it comes to trading options, you have to be aware of a long list of different factors. These include things like:
- Strike prices
- Expiration dates
- Option Premiums
- Difference between calls and puts
- Difference between buying and selling options
- The Greeks: Delta, Gamma, Theta
… and that’s just the tip of the iceberg. There are more complex strategies like bull spreads or iron condors. Let’s just agree that trading options is a little more complex than trading stocks.
So here’s my point: It will take you longer to learn how to trade options than learning how to trade stocks.
So what about trading futures?
If you’ve never traded futures, at first they seem like a completely different world. Here’s a brief explanation of what you have to be aware of when trading futures:
First, you need to know about things like the expiration date and tick values.
Let’s say you are trading the e-mini S&P (ES) where the minimum fluctuation is 0.25.
The ES you would then trade at would be:
Each of these numbers is also referred to as a tick and is worth $12.50.
If the e-mini S&P moves from up from 3000.25 to 3000.50, then you make $12.50.
And this is just how the e-mini S&P ticks work. Each futures contract ticks in a different fashion and has different values. Take the 30-year bonds for example. The ticks for the 30-year bonds tick by 1/32 and each of these is worth $31.25. I told you this would sound like something from another world!
But again, that’s my point. Futures trading is complicated and it would not surprise me if it took longer to learn how to trade futures than it does to trade options or stocks. They are all forms of trading, but will likely take different lengths of time to learn.
For simplicity in this article, let’s say you are learning how to trade just simple stocks. When you decide WHAT you are going to trade, you need to choose HOW to determine what stocks to trade.
This leads us to our next section.
What Analysis Method Do You Want To Use?
In a previous article, I explained the difference between fundamental and technical analysis.
To recap: Fundamental analysis is difficult and complicated. If you want to truly learn how to choose stocks by using fundamental analysis, it will probably take you months or even years.
So you might be asking: “Is technical analysis difficult as well?”
I wouldn’t say technical analysis is simple by any means. In a previous article, I did talk about the differences between chart patterns and indicators.
Learning all of the different chart patterns can be time consuming. If you want to be proficient at looking for chart patterns and trading off of them, it might take a while.
In my mind, indicators are much easier to trade off of. When you use indicators, it is black and white as to when to enter and exit a trade.
Say for example you’re picking stocks based on the moving average price. Well, you only need to check to see if the stock is above or below the moving average price.
The hardest part about using indicators is selecting which ones suit your style of trading.
Developing your own system of indicators can take months or even years of fine tuning. But when it works, it can make trading so simple that all of that time invested is worth it.
But if you don’t have the time to test and refine your own trading strategy, feel free to use mine. I spent years fine tuning the PowerX Strategy so you don’t have to!
This is exactly why I set up the site MyTradingRoutine.com. On this site I have a video showing you exactly which indicators I personally use while trading and go over every part of my trading routine in great detail.
Okay, time for a quick review:
When you decide on trading stocks, you can use technical indicators. This will shorten the time it takes to learn trading from years or months to just a matter of days!
Let’s look at the final criteria.
How do you want to trade: Day Trading Or Swing Trading
Now, I will preface this by saying that there are more than just two different durations for trading. But for the simplicity of this article, let’s just focus on day trading vs. swing trading.
The two types of trading aren’t terribly different. As you might expect, day trading means entering and exiting the same trade within a single trading session. Swing trading is entering a trade and then exiting it anywhere from two trading days to several months.
Is day trading a better trading strategy? Not really. In my opinion, day trading is more complicated than swing trading. If you want to find the right setup and then execute the trade within the same day, there’s a lot more to learn than there is in a swing trade.
How to Use a Trading Simulator to Test Your Trading Strategy
Oh, before we finish here there’s one more thing you need to know. It doesn’t matter if you are trading stocks or options, or using fundamental or technical analysis. You always have to test your trading plan before you trade with real money!
My recommendation is to use a trading simulator to make sure your strategy works. Check out my article on “The Best Trading Simulator” to learn about my preferred platform. I also cover how many simulation trades to make to test your strategy. This is an essential step before putting your trading strategy to work with your hard-earned money.
How long will it take you to test your trading strategy?
So let’s say you are practicing your strategy for day trading. As a conservative guess, you’ll get 2 trading opportunities per day. So if you want to hit my goal of 40 simulated trades, it will take you about 20 trading days or a month.
What about swing trading? Well, I’d say you get about 3 great trading opportunities per week. This means for 40 simulated trades, it would take about 13 weeks or a little over 3 months.
Testing your trading strategy is another time-consuming activity. There are no shortcuts here, so don’t try and get lazy. The traders who put in the time and the work are the ones who usually make money with trading.
Is Trading Hard To Learn?
Yes, especially if you want to trade options or futures by using fundamental analysis. But trading stocks with indicators might only take you a few days or weeks.
I always think about learning how to trade like learning how to ride a bike. It’s not difficult to ride a bike, once you know how. It does take practice to master riding a bike. We can say the same for trading: It’s easy enough to learn but takes time to master.
It’s why a lot of people fail in trading: They just do not take the time to practice. If you don’t put in the time to practice, you’ll never make mistakes. And if you don’t make mistakes, you’ll never learn from them.
Most people want to begin trading a strategy and expect to see results tomorrow. Sorry, but that’s not how it works. Put the time in and you will see the results over time.
I hope this article helped to answer the question of how long does it take to learn how to trade stocks? In the end, the real answer is that it depends.
Every trader and trading strategy is different. Keeping it simple usually means it’ll take less time to hone your strategy. But that doesn’t mean you shouldn’t put the time in!
How Do You Become A Successful Trader In The Stock Market?
Here’s how to start trading stocks in 5 steps:
- Step 1: Decide what to trade
- Step 2: Get a trading strategy
- Step 3: Practice on a demo account
- Step 4: Open an account with a broker
- Step 5: Start small, grow big
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