Anything worth having doesn’t come easy, and that includes success in forex trading.
But how long and how intense should our efforts be before we can rightfully expect reasonable trading results? A few months of trading? A specific percentage gain from our initial capital? Specific number of trades?
The 10,000-Hour Rule
The 10,000-hour rule was popularized by bestselling author Malcom Gladwell in his book Outliers. In it, Gladwell claims that guided practice for 20 hours/week, 50 weeks a year for 10 years = 10,000 hours; this is the “magic number of greatness” where a person could achieve a level of mastery that would rival that of a professional.
What can 10,000 hours of practice get you in trading?
Trading for ten years would expose you to a vast amount of different trading environments. For example, if you had started in 2006, you would have been around during U.S. financial crisis, European debt crisis, Japan’s nuclear meltdown, and even the plunge in oil prices. You would have also seen ranging and trending setups almost as often as you’ve seen a Friends rerun.
With that kind of varied experience, the daily exposure and recall alone helps a lot in developing trading plans better and faster.
Constant and extensive trading also helps you develop your own trading methods and strategies. After a while you’ll know which currency pairs, time frames, trading sessions, and indicators work best for your risk tolerance and personality.
Last but definitely no less important is the fact that time devoted to your trading career is time that you give yourself to develop good trading habits. As I’ve mentioned before, developing proper habits takes time and repetition; you can’t get that if you don’t trade consistently and extensively.
Do you really need the full 10,000 hours of practice?
If we have to be specific about it, I’ll have to say that the 10,000 hour rule should be taken as a guide rather than a hard rule.
See, a lot of factors, such as genetics, the intensity of those hours, and personal learning curve can also influence the outcome of those 10,000 hours.
You can trade for 20,000 hours and achieve nothing if all you do is put up one trade after another. On the other hand, you can show great progress if you use those hours to concentrate on learning from mistakes and taking action to improve your trading process.
This is also known as deliberate practice, which, combined with the other factors mentioned before puts a gray line on the 10,000 hour rule. Deliberate practice, or actively dissecting, reviewing, adjusting your trade methods, significantly speeds up your learning process.
While there’s no solid proof that you need a solid 10,000 hours in order to be a consistently profitable trader, you can’t deny the importance of the need to invest A LOT of time and effort in order to be successful in a performance field like currency trading.
At the end of the day, it really all depends on how badly you want to achieve your dreams and how much effort you’re willing to give to get there.