How long does it take to become profitable as a trader?

  • September 10, 2014
  • Blog

This is probably the most commonly asked question for a new trader. There are many answers, and everyone has their own experiences. But I have been a professional trader nearly my entire career and I have seen hundreds of traders come in to the industry and this is what I have seen.

Firstly, you have to understand some people are just not cut out to make it as a trader. Not only do you need the intelligence to work out strategies (or to know who to ask to teach you) you need the strength of character to deal with the tough times and be dedicated to perfecting your approach. As with any industry where great rewards are on offer not everyone can succeed... no that’s wrong.. Everyone can potentially succeed, trading isn’t a magical skill, but most people will not be disciplined enough to succeed or be in an environment where they can be taught to succeed.

So the vast majority of people that want to learn trading will be only willing to treat it as a part time passing interest, they will open an account and have no plan, just play around and hope something happens. Unfortunately 100% of these people will fail. By entering the markets it is like paying a small entrance fee and getting to play golf on the PGA tour. You are going up against people like me that are professionals, that have real strategies that they have perfected and used for years, that watch the markets constantly and are just waiting for people like this to come along and it is like lambs to the slaughter.

So who does this leave us with? Well then we are left with people that are actually serious about learning this. They make it a career choice and get taken on as a proprietary trader (which is what I did to get into the industry) where you trade using a firms capital (initially) for a profit split at a professional trading firm. Or you trade from home with a real commitment to learn and invest in yourself. These are the guys I love to help, when I see people willing to put in the work I want nothing more than for them to succeed. But still a lot of them wont. But why? Well they have all the professional attributes and the tools around them to succeed, but they still will find it extremely hard to succeed working on their own, trying to figure out all the little nuances and tricks in the markets that only professionals know. At the trading firms I worked at I could always tell which trainee would succeed, they were the ones constantly bugging us more experienced traders with questions about how we traded and what we were looking to do each day, they absorbed information from their surroundings and learnt from others rather than sitting on their own in the corner and hoping they worked something out. The people that never asked for help would take a year to 18 months to become profitable and about 50% never made any money.

But the people that had the mental attributes, were willing to invest in learning, both in terms of money but more importantly time and effort and learnt from people already successful their success rate was more like 70%. It still took about 6 months however before they started turning the corner.

So it does take time to turn a profit. And a lot of the people that aren’t willing to take their learning seriously will never make a profit. But of the people that make a real conscious effort to learn and make the use of good honest resources or are fortunate enough to work around other successful traders I would say around 6 months, I have seen it done quicker. But 6 months is about how long it took for me and most of the other guys I know that went on to have careers.