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Yes, Give it to me

How Long Does It Take to Become a Consistently Profitable Trader? 

Last Updated: November 3, 2020

By Rayner

You鈥檙e reading this right now because you want to know how long it takes to become a consistently profitable trader.

You鈥檝e heard others say it takes at least 2 years.

Some would tell you it takes 5 years.

And there are a few who still suck at it after 10 years.

So, what鈥檚 the answer?

Well, here鈥檚 the truth:

All traders go through 4 stages in their trading career. And how fast (or slow) you get to the profitable trading stage depends entirely on you.

Let me explain鈥

Stage #1: The hyper newbie

This is the first stage of your trading career and you鈥檙e filled with hopes and possibilities.

You have hopes for:

  • A better future
  • Getting out of poverty
  • Getting out of the rat race
  • Trading full-time and saying FU to your boss
  • Becoming the next champion trader (Paul Tudor Jones? Pfff, get in line鈥)

So, you study everything that you can get your hands on like RSI, MACD, Fibonacci, Price Action, Chart Patterns, Candlesticks, ADX, Trendlines, etc.

At this point, your confidence level is high as nothing can stop you. You put on a few trades and even have a few winners in a row.

You think to yourself鈥

鈥淭rading isn鈥檛 as difficult as it seems.鈥

鈥淭hat 95% of losing traders are pathetic.鈥

鈥淟et me show them how it鈥檚 done.鈥

This goes on until you hit a loss. But that loss is no ordinary loss because it wiped out your entire trading account.

Now, that鈥檚 when you realized trading isn鈥檛 all about trading strategies, indicators, patterns, etc. because there鈥檚 something called risk management.

That鈥檚 when you move onto stage 2鈥

Stage #2: The risk guru

This is the second stage of your trading career where you鈥檒l have probably blown up a few trading accounts.

At this stage, you understand the importance of risk management and how it plays a huge part in your trading.

So you study things like how to calculate your position size, how to risk 1% of your capital on each trade, risk-reward ratio, etc.

Slowly, your huge losses disappear into oblivion (except for the time when you break your rules) and you鈥檝e noticed a leap forward in your trading results. Yay!

So, you continue to practice risk management for every trade like having a stop loss, risking not more than 1% on each trade, having a minimum of 1 to 1 risk-reward ratio, don鈥檛 average into losers, etc.

But somehow, you鈥檙e not quite there yet.

Yes, your losses have been contained but, it seems your winners are still not compensating enough for your losses 鈥 and this still puts you in the red.

And if this goes on forever, you鈥檒l eventually suffer death by a thousand cuts 鈥 not good.

This is when you get your next 鈥渁ha鈥 moment and realized risk management isn鈥檛 enough for you to be a consistently profitable trader.

So, you move onto stage 3鈥

Stage #3: The lone ranger

At this stage, you know a lot about trading like the different types of trading strategies, indicators, patterns, how to apply proper risk management, etc.

But still鈥 you鈥檙e not getting the results you want.

That鈥檚 when you figured risk management, discipline, psychology isn鈥檛 enough if you want to be a consistently profitable trader.

威客电竞竞猜 your trading strategy must have an edge in the markets, without it, even the best risk management or trading psychology won鈥檛 save you.

So, what exactly is an edge?

This is something you do repeatedly over time that yields a positive result.

Here鈥檚 an example:

Imagine you have a special coin that rewards you $2 every time it comes up Head. If it comes up Tail, you lose $1.

Do you think you鈥檒l make money in the long run?

Heck yeah!

威客电竞竞猜 you have an edge in the coin toss as your winners are greater than losers.

And it鈥檚 the same for trading!

So once you have an edge in the markets, combined with proper risk management, that鈥檚 when you move onto the next stage鈥

Don鈥檛 worry if you don鈥檛 know how to find an edge in the markets because, in the later section, you鈥檒l discover tips & tricks to help you quickly level-up through the different stages. More on that later鈥

Stage #4: The business owner

The final stage is where you become a business owner.

At this point, you鈥檝e realized a few things鈥

You need money to make money in this business

Trading isn鈥檛 a get-rich-quick scheme. Instead, it鈥檚 a get-rich-slow scheme.

It takes time and money to grow your business. Here鈥檚 an example鈥

$5,000 account that earns 20% a year = $6,000

$5,000 account that earns 20% a year for the next 20 years = $191,688

$10,000 account that earns 20% a year for the next 30 years = $2,373,763

Once you鈥檝e understood the math, you鈥檒l go all out to add funds to your trading account and look to compound your returns for the rest of your life 鈥 that鈥檚 where the magic happens!

You reduce your risk when you trade multiple trading strategies

If your business only has one source of revenue, then you鈥檙e at risk of going out of business. Why?

威客电竞竞猜 if that revenue source 鈥渄ries up鈥, then you鈥檝e got no money to cover your expenses 鈥 and it鈥檚 game over.

That鈥檚 why the best companies in the world have multiple sources of revenue. For example鈥

Amazon has income from its e-commerce platform, a yearly membership subscription (Amazon prime), offers cloud computing (Amazon Web Services), etc.

And this is the same for your trading business!

You want to adopt multiple trading strategies so you can reduce your risk and have 鈥渕ultiple sources of income鈥.

And finally鈥

You must level-up your trading psychology

Now, the mental fortitude required to trade a $10,000 account is vastly different from a $1m account.

If you risk 1% on each trade, that鈥檚 about $100 (on a $10k account).

What about a $1m account?

That鈥檚 a $10,000 risk per trade.

Feel me?

As you can see:

Even though you鈥檙e at the last stage of your trading career, your learning is not over.

You鈥檙e still developing new trading strategies, adding funds to your trading account, and training your mental fortitude to handle larger sums of money.

Cheat code: How to quickly level-up your trading without going round in circles

At this point, you鈥檙e probably stuck in 1 of the 4 stages.

So now the question is, how do you quickly move onto the next stage?

Well, that鈥檚 what you鈥檒l discover right now鈥

How to get out of stage 1 (hyper newbie)

The reason why most traders fail at this stage is due to unrealistic expectations.

So here鈥檚 the truth, simply put:

Trading is a get-rich-slow scheme. It takes years of effort, money, compounding, and discipline to grow your trading account into something significant.

So don鈥檛 expect to trade full-time after taking a weekend course, or with a $1,000 trading account 鈥 the odds are immensely against you.

Pro Tip:

Some of the best traders and fund managers make an average of 20-30% a year.

If you鈥檙e shooting for anything higher, you鈥檙e either the next Market Wizard or downright delusional.

How to get out of stage 2 (risk guru)

Getting out of stage 2 is all about understanding math.

No worries, it鈥檚 so easy that even a 10-year old can do it.

Here鈥檚 what you need:

  • The distance of your stop loss (in pips)
  • Account balance
  • The % risk on the trade

Then just plug those numbers into a position sizing calculator like , and you鈥檙e good to go!

If you want to learn more, then check out The Complete Guide to Forex Risk Management and Position Sizing

How to get out of stage 3 (lone ranger)

This is a lonely stage because it seems like nobody understands what you鈥檙e doing.

Your family thinks you鈥檙e wasting your life away, your friends don鈥檛 get what the heck you鈥檙e doing, and doubt starts to creep in to whether you can pull it off successfully.

So here鈥檚 the deal, in this stage, only you can help yourself.

More trading strategies, techniques, patterns, or whatsoever won鈥檛 help you anymore. It鈥檚 time to discard 90% of the stuff you鈥檝e learned and focus on the 10% that matters.

But how do you know what works and what doesn鈥檛?

That鈥檚 where backtesting comes into play.

This is where you validate your trading strategy (using historical data) and find out whether it works, or not.

If you want to learn how to do it systematically, then check out The Essential Guide to Systems Trading.

Alternatively, if you鈥檙e a discretionary trader and want to do it manually, then check this guide out.

How to survive stage 4 (business owner)

In this stage of your career, you鈥檝e beaten 95% of all traders out there.

Now, it鈥檚 time to scale up and diversify your risk.

Here鈥檚 how鈥

#1: Add funds to your trading account

As you know, you need money to make money in trading. So, to scale things up you need to add new funds into your trading account.

This could be money from your job, businesses, etc.

#2: Split your money across different brokers

Here鈥檚 the deal, no broker is 100% safe.

That鈥檚 why as a business owner, you must split your funds across different brokers.

Also, different brokers specialize in different niches like stock trading, FX trading, Futures trading, etc. So go with a broker that suits the markets or strategies you鈥檙e trading.

#3: Always be a student of the markets

Remember this, you鈥檙e forever a student of the markets even if you鈥檙e already profitable.

That鈥檚 because you can always improve your trading results.

For example:

  • Adopt an uncorrelated strategy to your portfolio so you can smooth out your returns over time.
  • 威客电竞竞猜 a new trading strategy that lets you profit in both bull and bear market conditions.
  • Tweak your existing strategies to make it even better

If you need ideas for new trading strategies and techniques, then check out the list of my recommended trading books.

#4: Create multiple sources of income

For example鈥

You can be an affiliate for products or services.

An affiliate is someone who earns a fee (or commission) when someone signs up for a product they recommend.

Need some ideas?

Then here are some products (or services) that offer affiliate partnerships鈥

(Note: I鈥檓 not endorsing any of them. These are just examples for educational purposes.)

Brokers 鈥 ICMarkets, Blueberry markets, etc.

Platforms 鈥 TradingView, CQG, Trading Technologies, etc.

Tools 鈥 TraderVue, Forex Tester, etc.

The possibilities are endless.

All you need to do is reach out to the service provider and ask them if they offer any affiliate partnerships, and that鈥檚 it!

A word of warning鈥

Never promote products you don鈥檛 believe in just for the sake of affiliate fees 鈥 it鈥檚 not worth burning bridges for short-term gains.

At this point鈥

You鈥檙e probably thinking鈥

鈥淥kay Rayner, so how long would it take for me to become a profitable trader?鈥

Here鈥檚 the deal:

I can鈥檛 tell you how long it鈥檒l take to become a profitable trader because it depends on many factors like which stage you鈥檙e currently at, your attitude towards trading, etc.

For example:

Marty Schwartz, a market wizard, relied on fundamental analysis and lost money for 9 years. Then, he shifted to Technical Analysis and made millions ever since.

Now, you might think Technical Analysis is the answer, but it鈥檚 not. Marty Schwartz found success in the markets because of his winning attitude. Technical Analysis is a medium to his success, not the driver of it.

鈥淚 always laugh at people who say 鈥淚鈥檝e never met a rich technician鈥 I love that! Its such an arrogant, nonsensical response. I used fundamentals for 9 years and got rich as a technician.鈥 鈥 Marty Schwartz

Now here鈥檚 what I鈥檇 like to know鈥

What stage in your trading career are you at right now?

Leave a comment below and share your thoughts with me.

  • Trading for 180 days. Fluctuating between stage 1/2,
    5k cash account. P/L -452.00 to date bal 4554.00
    Risk management 10.00 per trade
    Trading 1200.00 per day. 1-3 trades per day.
    This business continues to humble me
    YourTube videos been a strong correction to my initial trading strategy, which was no plan!
    No money management, no stop loss.

  • Hello Rayner,
    I want to buy your book , pull back stock trading system but l want a soft copy , l mean in PDF format, how do l get it .
    I don’t want the hard copy.
    Just let me know so that l can access it as early as possible

  • Still at the first stage. This is quite expository, I could easily find myself in the mirror of these highlights. I still have a long way to go.
    Thanks for these nuggets Rayner

  • This is so mind opening, although I have blown of 4 accounts already. I’m sure this book would be a game changer for me and a start of great things.

  • I just finished stage three, I am now at stage four, where capital is what I am tryining to gather to grow my trading account,

    Thanks Much for the education Teo

  • Awesome article Rayner. Now, with the statement, does it mean a strategy may work on one broker and NOT work on another?
    “So go with a broker that suits the markets or strategies you鈥檙e trading.”
    Thank you so much

  • Baby steps..Keep to one stock or whatever you r trading in its present mode like day scalping if there’s volatility
    change it when a change in activity occurs .multitasking different ones at same time is no good leveraging is no good

  • Hey Rayner, I have experienced stages 1-3 in almost 9 months since I started Day trading, I have blown my account twice so far, I am resting now

  • This article perfectly summarized what trading financial Markets is all about. My greatest discovery is that it is practically impossible for Market to behave in an irrational way, however one thinks about that, the opposite is true. Markets has its own rules and follows it in a disciplined way. It is a herculean task however for everyone to find that out for himself or herself. Market is highly disciplined. A lot of us joined the Market on a erroneous conviction of a get rich quick promises. Men!!! Too far from that. It’s a get rich slowly.

  • Stage 1. i totally agree with everything you said. I went into trading blindly and I had humble pie for breakfast, lunch and dinner and got served it as dessert also. Lost loads of money. But My uncle and Rayner gave me hope. Uncle retired at 50, went into trading and still at it at 80. Learning hard and fast. Thanks Rayner.

  • Very nice article. I came into the world of trading in 2014, now i am between 3 and 4. I have my daytrading with futures and my swing trading with forex on different brokers. I have my long term real stocks investment account with another broker. The article above is like a 1:1 mirror. I remember I came to a point where i wanted to quit trading like 2-3 times but i always knew there is something. Now i am here and its good to know that i am not alone going through this. I have learned alot about myself during that time and i know the best ist yet to come 馃檪

  • Stage 3 …..i knw i have a system with edge but still doing some silly mistakes trying to improve them…..thanks rayner for your contribution in my trading carrier struggling from last 3 years bt now with you hope is there…Thanks to u

  • I think I might be fluctuating between 1 and 3. I bought few courses, indicators and then signed up with account management services for Forex trading. All of which lost me money close to 25K + plus the valuable time I missed with my wife and kids. I have been at this for 10 years now. Still not a single penny won. I demo traded for over 5 years and still doing it with live trading sometimes. Since I demo traded for too long, I am stuck between demo and live trading. I think I have couple of winning methods when back testing. When forward testing I loose money on them.
    This is where I find problems with back testing. See when you back test, you will be taking trades on all sessions (Asia, UK, US). However in reality, one cannot trade all sessions. So my forward testing fails due to think (I think). So I think my methods are good on all sessions but not on NY (I can trade only in NY session). So I am back to the drawing board to find something that works on NY session.
    If I can give one advice to others, put a daily time limit to your trading/ learning and don’t forget to enjoy spending time with your family. Otherwise, you will regret it one day.

  • Hi, Sir, I’m in the beginning stages. Been eye opener, not what I expected, but I’ve jumped in reading, watching, writing etc.
    Your comments are true, not an easy choice but it’s one I know I will succeed in. Having platforms like this is super. It expands ones knowledge, connects etc.

  • Thank you for sharing and putting all this learning material together of what you have learned over more than a decade of trading. I know the importance of risk management, risk/reward ratios, consistent trading of your plan, being patient for your setups that match your plan. I barely started forward testing my strategy with my son, so I guess that would put me in stage 3.

  • Stage 4. Part-time options trader now. Scaled account up to significant proportion of my total net worth. Became “consistently profitable” 5 months ago, traded 95 positions, but still building up track record. Main challenge is still training mental fortitude to be very comfortable with trading at this size and prepare to scale up in the future.

    I was at Stage 1 when I discovered you about 3 years ago! Thank you for getting me started and saving me lots of time/money by not falling into the common traps.

  • Dear Rayner
    Thanks for the nice write up. From the above i could say that i am in the end of the 2nd stage and entering the 3rd stage.

  • Rayner I have been trading live for 2 months and lost money in half my trades that outweigh my winnings. I have good money management and want to move up to the next level. I am very dedicated to becoming a profitable trader. My account doesn鈥檛 have enough money probably but I鈥檓 forced to use what I have due to COVID costing me almost everything I own. I really enjoy your training videos and hope to become a profitable trainer in the next year or so. Thank you!

  • just coming into Stage 3 after about 5 years, lost absolutely loads and realise ‘slowly slowly catchy monkey’. I only need about 20-25pts per day for the next 6-8 months to rebuild a small account to be earning what the same as I do in my full time job. I am not going large so as to not be tempted with too big a lot size.

  • Powerful stuff.
    Defs stage 3 – 4
    I needed to read that. Thank you.

    I’ve been getting alot of confirmation these past 3 weeks. Felt like a lone ranger for the past 3months using a new strat. I call it version 13.0 lol!
    Thought I was losing my marbles until I got a job offer because my analysis was spot on which was part of their test.

    Im finally getting out of the lone ranger stage and “my people” are also starting to believe in me. Which is a big deal mentally. I can see the changes on my entries and exits but for someone else to see your strat in action is rewarding #confluence

    I’m no trading guru but I do work my butt off everyday at least 3-4 hours at the charts.

    Covid hit me hard financially and I needed to up my hussle plus I have a wedding to pay for.

    “We learn everyday”

    Thank you for all your cool vids and tuts. Rayner
    Keep up the good work!

    • Just recently blown my $1000 account for XAUUSD as I was trying to trade consolidation, and unfortunately a trend started against me, and I did not put a SL, and I picked the worst time to hedge.. etc etc. One problem snowballs to another.

      Initially I could’ve just been down by 20-30% even without the SL, but because I refused to admit my mistake early on, I aggravated the losses to 90% losses (considered as blown account). That’s when I realized I am very much lacking in technicals for XAUUSD and I am now spending weekends trying to create my own strategy, together with SL planning (risk management).

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