Understanding How Long Does It Take To Learn Trading: Investing and trading are two different methods through which individuals attempt to make a profit in financial markets.
Both investors and traders aim to generate profits through market participation. More often than not, investors focus on fetching larger returns over an extended period by buying by holding stocks for the long term.
Traders, on the other hand, try to take advantage of both rising and falling markets by entering and exiting positions in a comparatively shorter time frame.
Investing focuses on taking a long-term approach to financial markets and often applies to purposes like retirement accounts.
On the contrary, trading aims to work on short-term strategies to maximize returns on a daily, monthly, or quarterly basis.
Investors focus on riding out short-term losses, while traders try to engage themselves in those transactions which can help them make quick profits from fluctuating markets.
The goal of investing is to gradually build wealth over an extended time period through buying and holding a portfolio of stocks, mutual funds, bonds, and other investment instruments.
As a result, they end up taking advantage of perks including interest, dividends, and stock splits which come along the way.
Since there is a notion that trading can help in making healthy profits in a short period of time, several individuals have started taking short-term training courses on trading.
Have you ever thought about how long does it take to learn trading? What are the advantages? If not, this article will help you in getting an idea! Read on to find out more!
Trading Versus Investing – The Difference
Before answering the question, how long does it take to learn trading, let us quickly understand the basic differences between trading and investing?
While discussing the money-making options in the share market, it is important to have the basics right. People tend to get confused between terms such as investing and trading.
An investor is one who focuses on holding a position or security for a longer duration of time and is a long-term player. On the other hand, a trader is one who is affected by frequent fluctuations in the securities market.
The critical difference between investing and trading is the type of approach that individuals use. In investing, an investor uses fundamental analysis to choose and select a company, and in trading, technical analysis is followed.
Investing focuses on studying the company closely and maintaining a position in it for a longer period. In investing, expectations are there for making profits in the long haul.
This type of investment involves lesser risk. In comparison to trading, investing is safe to market trends. A classic example of “investing” is mutual funds as it involves lesser risk due to the basic principle of diversification.
Trading involves studying companies closely with everyday trends to predict future change on the basis of which a trader can earn better profits.
Trading is a short-term strategy and it might involve buying and selling in a single day, week, or month on the basis of market situations.
Let us now study how long does it take to learn trading!
Planning To Learn To Trade? Make Sure You Read This!
Learning to trade is treated as a life-long journey, and every trader’s journey is unique and exciting. Several things are required to be mastered, apart from knowing when to enter and exit a particular trade!
So, how long does it take to learn trading? The question is quite common, especially for beginners and amateurs. Furthermore, this is a serious question, and it needs a serious answer.
On average, you can expect to learn trading in 1-3 years. Of course, this number tends to vary significantly with many factors.
One of the best things a learner can do to speed up his/her learning is to get enrolled in a good trading course. By doing this, he/she will be able to learn from the mistakes of other traders and they can avoid committing the same mistake.
Trading can be divided into 2 parts: swing trading and intraday trading. Swing trade refers to that strategy where a trader takes the delivery of a particular position for a few days to a few weeks.
This form of trading is often preferred by working professionals. You can easily expect around 7-8 months to learn swing trading.
The initial few months will be spent building a solid foundation for the stock market. You will get to know about the working of the stock market, Demat account, trading account, FIIs, DIIs, and other basic concepts.
Post that, you will come across the concepts of technical analysis. This is a vast subject and is NOT limited to candlestick chart patterns, Doji, bullish engulfing, etc.
Since limiting the risk is of utmost importance, next you should learn about risk management strategies, trading psychology, money management, etc.
Once you are through with these topics, you will come across futures and options (F&Os). Options are quite complex, yet the most important topic. You need to spend a significant amount of time learning F&Os and formulating strategies.
As you can see, these steps in learning swing trading will easily take around 7-8 months. However, you will not regret spending these months learning swing trading as it might prove to be beneficial in the long run.
Next comes intraday trading. Since most of the concepts are the same as above, you will be required to spend additional 4-5 months only.
So, totally comes out to be around 1 year. In the additional 4-5 months, you need to learn about time management skills.
Since intraday means squaring off the position by the end of the trading session, you really need to be quick in placing appropriate strategies as well as explore advanced trading solutions that can help you navigate complex market conditions effectively.
The stock market is dynamic, and it continues to change. Therefore, you will learn which trading strategy is required under which market scenario.
Deciding when to apply a particular strategy, how to cut down the losses, etc. are some of the most important concepts and should not be missed.
Also Read: Why Is Insider Trading Illegal In India? What Makes It Illegal?
Final Words
We hope that the question, how long does it take to learn trading, has now been answered. Ultimately, it all narrows down to the mindset.
You really need to be patient and ready to work hard. This is a new skill that you will learn and this will help you for the rest of your life.
If you master the art of trading, you can make money even in your retirement years as you can trade even from your home.
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