How long does it take to learn how to trade stocks?
Some claim it only takes a few weeks.
Others say it takes months.
And some people say it takes years.
So who is right?
How Long Does It Really Take To Learn How To Trade Stocks?
Well… I’m going to start this article with “It depends…”
… but I promise that I will give you a VERY definite answer on how long it really takes to learn how to trade.
Here’s why I say “it depends:”
There are SIMPLE ways to trade, and there are more complicated ways to trade.
In a nutshell, it depends on 3 factors:
- The instrument you want to trade, i.e. stocks, options, futures or forex.
- The analysis method you want to use: fundamental or technical analysis
- The timeframe you want to trade: day trading vs. swing trading.
Let’s talk about each of these in detail:
What Do You Want To Trade?
The easiest instrument to trade are stocks, and here’s why:
Stocks are easy to understand:
If you buy a stock for $100 and the price goes up to $101, you make $1.
If you trade 100 shares, you would make $100. Easy enough.
When trading options, you need to understand…
- 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.
As you can see, trading options is much more complex and therefore complicated than trading stocks.
And that’s why it will take longer to learn how to trade options that if you would just trade stocks.
Now let’s talk about futures:
When trading futures, you need to learn about expiration dates as well as “tick values:”
As an example: When trading the e-mini S&P (ES), the minimum fluctuation is 0.25
So the ES would trade at…
And each of these “ticks” is worth $12.50.
So if the e-mini S&P moves from 3000.25 to 3000.50, you would make $12.50 per contract.
And to make matters worse, each futures contract ticks differently and has a different value. As an example, the 30-year Bonds tick in 1/32 and each tick is worth $31.25.
As you can see, futures trading is much more complex and complicated than trading stocks, and therefore it would take you much longer to learn how to trade futures than options.
But for now, let’s say you decide to trade stocks to make things easy. Because this would already save you a bunch of time.
After you decide WHAT to trade, you need to determine HOW you will pick the right stock.
What Analysis Method Do You Want To Use?
In my previous article, I talked about the difference between fundamental and technical analysis.
Fundamental analysis is difficult. And it’s complicated.
If you want to learn how to pick stocks using fundamental analysis, it would take months – maybe even years.
On the other hand, there’s technical analysis. And in the previous article, I talked about the difference between chart patterns and indicators.
If you want to learn how to pick stocks using chart patterns, then you need to learn all the chart patterns, which takes time, and then you need to practice to recognize the chart patterns. This can take weeks.
On the other hand, when using technical indicators, you just need to know what indicator to use. Because then, it’s black and white.
As an example, if you choose to pick stocks using a moving average, you only need to check whether the stock is above the moving average or not.
The tricky part is to find the right indicator and the right settings for the indicators.
If you want to develop your own system, it can take months and years of development and backtesting to find the right combination.
I personally spent years testing and refining my own trading strategy – The PowerX Strategy.
The good news: You don’t have to do that! You can shortcut your learning curve by simply duplicating what other successful traders do. This will save you many months and years.
As an example, if you would like to know the indicators that I personally use and what settings, then simply go to MyTradingRoutine.com where I have a video for you that shows you everything in detail.
Ok, so let’s review:
If you decide to trade stocks and you decide to use technical indicators, you can shorten your learning curve from years and months to a matter of days.
Learn to trade stocks & options in 15 minutes a day
How do you want to trade: Day Trading Or Swing Trading
There’s ONE thing you need to do regardless of whether you’re trading stocks or options, or whether you’re using fundamental or technical analysis:
You have to test your trading plan!
You MUST test your trading strategy on a simulator to make sure that it actually works. I wrote an article on “The Best Trading Simulator.” You should definitely read it.
In this article, I explain why you should test your trading strategy over at least 40 trades. Anything less, and you won’t have statistically relevant results.
So now the question is:
How long will it take you to test your trading strategy?
Well, if you are day trading, you might get 2 trading opportunities per day. So in order to place 40 trades on a simulator, it would take you 20 trading days, which is approximately 1 month.
If you are swing trading and you only get 3 trading opportunities per week, then it would take you approximately 13 weeks, which is a little over 3 months.
As you can see, TESTING your trading idea and placing trades on the simulator is the most time-consuming activity.
And you can not shortcut it. Those who do, are usually the ones losing money in the markets.
And those who take the time to thoroughly test their trading idea and PRACTICE it…. Those are the ones that are making money with trading.
Is Trading Hard To Learn?
If you want to trade options or futures and use fundamental analysis, then YES: that’s difficult and trading will be hard to learn.
However, when you trade stocks and use indicators, you can learn how to trade in a matter of days.
But think about it like riding a bicycle: It’s not difficult to learn how to ride a bicycle: All you need to do is get on the bike and pedal.
But it takes PRACTICE before you master it.
Same in trading: Learning how to trade is relatively easy, but you need to PRACTICE it to master it.
And THAT is the reason why most people fail: They simply don’t take the time to practice the trading strategy, make mistakes and learn from them.
Most people invest in a trading strategy or a tool today and want to see results tomorrow. It simply doesn’t work this way.
Take the time to practice, and you will significantly increase the odds of making money with trading!
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
I made a video for you in which I go through these steps in detail.
You can watch it here: MyTradingRoutine.com
Learn to trade stocks & options
in 15 minutes a day