Become a full-time FX trader before you’re ready
This is probably not the most common advice given to people that want to become full time-fx traders. Hell, I used to argue that it was great to have a job, you get to cover all your living expenses and still have the free time after work to get some work done. Basically a no stress situation.
But that was before COVID hit.
I haven’t been traveling for 5 months, instead I’ve been lucky enough to stay with my parents to make sure all is well with them and get to spend time in the country side.
Since I’m not traveling but in a quite boring location – I’m able to get an insane amount of work done. I’m all in.
I don’t mean go all in and just sip Perrier next to the beach while looking at charts by the way.
Hell no, that’s cool for an hour or two per day, but having a proper place to get work done is even more important
I tend to spend around 5hours per day working on my FX on average would it be doing back testing, reviewing data, updating this blog, thinking about how to invest my time and what I should work on, talking to other traders etc.
Which leads me to work around 35 hours per week, but to make it simple, let’s say I’m smarter than I look and I take the Sundays off – so 30 hours per week. (To be faire, when I’m really digging into something I work a hell lot more than 5hours per day but that’s not sustainable over a year)
If I was working a 9-5 job, I’ll probably be getting one hour, maybe two per day right? So that’s 10 hours per week day, and let’s say 5 hours on Saturdays and Sundays because you really want to succeed and you’re damn serious about it too – so 20 hours per week.
If you’re spending 20 hours per week working on your FX – that’s already amazing! You’re doing way more than someone that only does 10 hours work per week.
But how much more? Well over a year that’s 520 hours more, which is kinda insane!
But, I truly believe that learning is something that is also compoundable, it’s not only a question of money. You keep adding to what you’re doing to make it grow more and more.
This graph is an easy one, I assume that 10 hour work week will improve your skill by 10%, working 20 hours per week will improve your skill by 10% over a year you go from 1 to 142 if you spend 10 hours per week
If you spend 20 hours per week you reach 13 104 after a year. That’s 92 times more than if you had worked 10 hours per week.
Let’s have a look if you’re doing 30 hours a week compared to a 20 hours week.
If you work 30 hours per week, and assume a 30% compounding rate it will make you reach 841 500 instead of 13 104 if you spend only 20 hours per week.
That’s 64 times more than if you had worked 10 hours less.
That’s 5 924 times more than if you had worked 10 hours per week instead of 30hours.
That being said… It takes time.
It takes time to build some serious skill.
Here’s one of the best representation of compounding.
In the two previous graphs you could see it took 27 weeks before we could even notice a small candle – it took half the year to be noticeable.
The amount of progress you can do this year is insane.
The more time you spend working over the year the more it will pay off.
Now that we’ve made it clear that progress will take time, let’s explain what I mean by going all in.
Quit your job, cut all expenses, move back to your parents.
You’ll probably be able to find another job quite quickly if you decide trading isn’t for you.
If the argument is, I need to work to have a large trading account, then I’ll just mention the fact that you can become a trader at a prop firm OR get funding with a company such as 5ers or FTMO (there’s loads of different ones).
You’ll be able to live, comfortably if you are lucky enough to have parents that live in their own home with enough room for you.
You parents are older, there’s going to be a day when they won’t be there.
Spend time with them and enjoy the time you have with them
Let’s say you’re able to spend a year back at your parents, spending 30 hours per week working on your trading competence, 10 hours volunteering and the rest of the time helping out your family and reading.
Wouldn’t you be a better person than if you just kept on working 40 hours + per week for a job that doesn’t really have a meaning and isn’t aligned with your longer term goals?
If you could spend a year, or even half a year living with your parents or even on your savings and really putting the work in, the growth you’ll see will be amazing.
It’s hard, society will be against you.
Hell, I felt like I was admitting defeat going back to my parents after the confinement, I should be staying in an airbnb somewhere cool to remain the cool digital nomad I had built my identity around.
But now, I have no regret. It was so worth it. The amount of work I’ve been able to put in, and the competence I have now built is so much stronger than what I had before hand.
It feels like moving a step back, but it’s worth it, you’ll probably jump a few steps ahead after six months / one year.
It’s all about having the right FX foundations to be a good trader
The foundations of your skill are the basis of your competency.
The skills that you have built up, the knowledge you have assimilated, the understanding that you now have at an unconscious competence level will enable you to build your success on it.
I’m going to use the same illustration I showed above to talk about it 🙂
Here’s beauty of it.
We all know, a house needs a solid foundation otherwise it would probably crumble. Hell I’m not going to go too deep about the architecture of houses and buildings, because I don’t know anything about it.
If we imagine that all those small bars are weeks spent building the foundation of the house, the medium size bars building the ground floor, the big ones the 1st floor and 2nd floor. You’d accept it>
It’s the same with trading, once you have a solid foundation you are able to really scale a lot more quickly both in terms of learning / skill / returns.
It took 20 months to build the empire state building, which I think is insane – I would’ve expected a lot longer
You can see the building was finished on November 10th 1930, it was already a few floors up in June 1930.
All the time between June 1930 and August 1929 when it was announced was spent making sure the foundation was correct, that’s 10 months of work before the building was a quarter of its final height when it had already been half the time it took to complete.
That’s how important foundations are to the success of any endavours.
The more you commit to something, the more time you work on the foundation the more they will be solid which will then allow you to sore to new heights..
Go all in.
Focus on building the right foundations
Then be patient.
It takes a time, longer than you think. You need to show up and put in the work until the effect compounds, 27 weeks of 30hours work will give you the foundation you need to build the skillset required to reach new heights.
The sad reality is that many give p before they reach the threshold where compounding kicks in meaningfully