Applying the 10,000 Hours Learning Rule to Forex Trading

Introduction

It was Malcolm Gladwell who popularised the idea that in order to become a world-class expert on a particular subject, you need to put in 10,000 hours of deliberate practice, which is equivalent to working at something for 20 hours a week for 10 years.

This idea has a lot of merit because I think in many cases you will undoubtedly become extremely skilled in a subject if you practice it for at least 10,000 hours.

However there are other areas, such as sport, for instance, where you may require a certain amount of natural ability as well (in addition to hours and hours of practice) in order to reach the very top.

With forex trading, I don’t believe you really need any kind of natural abilities. There are certain attributes that you will require if you are serious about becoming profitable, such as discipline, focus, composure and an analytical brain, but these can all be developed with practice.

So let’s talk a little more about this 10,000 learning rule, and how it applies to forex trading, starting with education.

Education

Assuming that you have no knowledge of currency trading whatsoever, I would say that you definitely don’t need 10,000 hours to learn both the basics and the core concepts of trading.

If you visit educational sites such as BabyPips, as well as this one of course, read the forums at Forex Factory and listen to a number of trading podcasts, for example, then 100-200 hours is probably more than enough to learn everything you need to know about both technical and fundamental analysis.

However just being armed with all of this knowledge is not enough to enable you to automatically start making money from this profession.

This will inevitably require a lot more time, and this is where the 10,000 rule may be a lot more applicable.

Learning to Become Profitable

It has often been said that one of the best ways to learn how to become a consistently profitable trader is to sit down in front of your computer and watch how the markets move day after day.

Therefore you want to pick a handful of the major forex pairs, such as the GBP/USD, EUR/USD and USD/JPY pairs, for instance, analyse the price charts on multiple time frames day after day, and just see how they move.

By plotting areas of support and resistance on your charts, looking at some of the most popular indicators and viewing the price on multiple time frames, you should soon start to see the same patterns emerging time after time, which will subsequently make it easier for you to make money because you will be able to identify the trades with the highest probability of success.

By simply doing this for 10 hours a day, 5 days a week for 4 years, you will have done your 10,000 hours of study (10,400 to be precise), but this is obviously not realistic for most people to do because you need to be earning an income as well.

Therefore you need to do 10,000 of ‘deliberate practice’, as suggested by Malcolm Gladwell, which means that you need to study the markets in great detail, and try to develop your own strategies along the way trading your own capital.

This is the real key to success. Nobody is going to give you their winning strategies. The only way to become consistently profitable is to actually put in the work yourself, study how the price moves for various different pairs and come up with your own plan of attack.

Indeed if you ask many of the best forex traders, they will often tell you that it took them a good few years before they really started making money.

So although you won’t necessarily need 10,000 hours to fully educate yourself about the whole subject of currency trading, you have to be prepared to dedicate a similar amount of time to this subject if you are planning to make a consistent full-time living from this profession.