I was going to be writing on another subject for Part three - but I decided to change it after reading some comments on different forums over the weekend and thinking - Why are some traders missing the obvious ?
Here's a few questions to ask yourself -
1. Can you drive a car and do you hold a full driving licence ? If so - was you a good driver after your first week or first 50 miles ? Was you more experienced after say 5 years and 50k+ miles under your belt? Was you a better driver after drivings say 5 different cars in different parts of the country or even abroad ??
2. Have you ever decided to accomplish a new skill - ie skiing or snowboarding - go karting - sailing - ten pin bowling etc ? Have you noticed you started to improve after time ? It might be after a few months or in the case of some skills - it can take many months and years??
3. When you have learnt a new skill or sport etc - have you generally found there is a proper way to do it and other people really don't try and mislead you and send you down the wrong way ? ie if skiing - no teacher would say on your first day - go to the top of the highest mountain - find a "black run" that's really steep and just go for it ??
4. Have you noticed you can grade many of the activities that involve some type of skills - ie at the start you are a beginner - and then after a few weeks or months you become intermediate or semi skilled and then may be a few years down the road you become experienced or advanced or even over time you can become an expert on the particular skill - ie part of a small percentage who are at the top of their skill level etc
OK - hopefully you agree with what I have been mentioning above and so now lets relate it to FX Trading
The main first reason most traders fail is because they never get past beginner level
Beginner level can range from just 3 months to even 3 year plus. I will give you an example - I have read of one trader who was made redundant from his job and decided that for 4 months he would focus full time on trying to learn how to trade profitable . He was lucky - he had a mentor ( not me ) who he had known for a few years as a friend. He spent over 4 months an average of 50 hrs a week studying and learning and watching charts and taking initially demo trades. He was guided by his mentor - so was told what to focus on
At the end of 4 months - he had under his belt over 800 hrs of concentrated FX learning - not much but the same as many traders who spend just a few hours a week of 2 years part time . He found out he was still really a beginner and was not consistently profitable - even after all the help he had from his mentor. In fact he realised 800 hrs was just not enough - he had not learnt enough.
Now that sums it up - many new retail traders give it less than 100 hrs of study - and then either blow their account and give up - or become hooked and realise they need to learn so much more.
Personally I think you need a few thousand hours of study and chart watching to even get to an intermediate level. It does not matter if you read 5 books on FX Trading - or even 30 books - books alone will not get you there - that's like trying to learn how to drive a car without getting behind the wheel on the road.
Now thinking about it - if you spend say 15 hrs a week - ie like say 3 mornings / afternoons / evenings and then studying articles and books at the weekend - then in a year - that's less then 750 hrs - so even 3 years is not even 3000 hrs .
If you were employed by a Bank or hedge fund etc and then taught their method - in just 6 months you would have clocked up over 1500 hrs and you would either be at a good level -or told to look elsewhere etc.
I am amazed why some traders who I would say have a good "brain" cannot understand why a trader with over 25k of live trades behind him is at a better more advanced skill level than another trader with only 1500 trades ??
OK some traders at say 3 or 4000 live trades will be far better than other traders who might have taken 8 or 10,000 live trades - that all depends on their method and their understanding of the whole "subject" and their personality - ie discipline, memory, health , age etc etc.
The majority of retail traders on any FX forum ( other than this one ) will comprise of the majority who have less than a few years experience. Many will want to pretend they have say 4 years - when really its not quite 2 years. You will only find a small percentage of FX traders who are full time - ie trading every day and week and generally spending over 25+ hrs a week at their activity . Even the part time traders who have 5 or 7 years plus of FX trading behind them are still only at "intermediate level " they maybe making a profit or break-even - but will still have losing months and are not as consistent as they would like
You are only going to find the real consistent traders - ie never have losing weeks and have at least 3 years of proper results in all conditions etc as a very very small percentage - I don't think they exist on copy trader sites simply because most full time proper traders would be making enough money without bothering to supplement it.
I will be interested to hear from any Forexmospherians who maybe want to expand on this subject - we need to make sure "newbie" FX traders realise - there is do much dross and misinformation - due to lack of retail trading knowledge out it all these other forums