The Path to Become a Successful Forex Trader

Ted Capwell

Trading Forex is an interesting but difficult job. As you already know, only 10% of Forex participants can make a profit from this market.

Many people believe that success in trading comes from luck: profitable Forex traders are born to trade Forex. This is a very wrong notion. In fact, successful traders are not born – they are made. They have gone through a very long process of learning and practicing.

So, the question is: How long will it take you to become successful in Forex trading? This article will give you an answer.

Learning to Trade is a Psychological Process


How to become a successful trader in the forex market


When newcomers learn about Forex trading, they advance through the stages of thinking development.

According to Gordon Training International, a trader must go through 4 stages to perfect his thinking and become successful. This model of learning was later adjusted with another phase added – an awakening moment.

Below is the complete model that explains the stages a new trader must go through when learning to trade:

● Unconscious incompetence

● Conscious incompetence

● An awakening moment

● Conscious competence

● Unconscious competence

Stage 1: Unconscious incompetence

The first stage that every new Forex trader goes through is called “unconscious incompetence”. The characteristic of traders during this period is that they do not know that they are lacking knowledge. What they know is just downloading trading platforms, opening accounts, and placing orders.

However, they were influenced by emotions. What they think about Forex is that it can bring them a large amount of money in a short time.

Traders in this period will often face one of two things:

● Their positions turn against them immediately. When this happens, traders either sit and watch, or close their orders and open new ones in the opposite direction with the hope to get in the right direction of the market. Unfortunately, no matter what they do, trading results will not be as expected because they simply lack experience to face market fluctuations.

● Their positions work well initially; however, because of being driven by emotions, new traders will often perform inaccurate actions such as opening orders with very large volume. This will drive their profit away, or can even “burn” these traders’ accounts.

The result of stage 1 is either new traders will move on to the next step, or they will stop trading altogether.

Stage 2: Conscious Incompetence

When traders come to this stage, they realize the importance of learning. They think that the more knowledge they have, the better they will trade; therefore, conscious-incompetence traders will seek to learn to trade through ebooks, articles, videos, or in forums. They then practice trading with their knowledge.

Traders can also seek help from financial experts. However, they will often be lured by phony experts and spend a lot of money buying systems from these people.

In this second stage, traders will often continue to experience bad results, and instead of being aware of the mistakes coming from their own behaviors, they will blame the market, the trading tactics, or the “bad” information they have learned.

Stage 2 is the most dangerous for beginner traders. It can last for weeks or even years, depending on each trader’s perceived ability.

To check if you are in this stage, ask yourself the following questions:

● Do I have a strategy and stick to it?

● Do I use a trading journal?

● Do I review my old trades?

● Do I know why I entered or exited an order?

If your answer is no to any of these questions, then you are stuck in this stage.

Stage 3: Awakening Moment

Traders in the Awakening Moment stage will realize that success in trading mainly comes from psychological and risk management.

The basic understanding that they will never be able to anticipate what will happen in the market, starts to form. They begin to realize that success in trading must be measured by a series of trades, including winning orders and losing ones. Besides, they also start realizing the importance of following a system, minimizing risks and maximizing profits with discipline.

Awakening-moment traders will begin to enter and exit orders when their systems give signals without paying attention to their emotions.

Stage 4: Conscious Competence

Traders in stage 4 have nearly reached the threshold of success. They stopped trying to pick the winning orders. Whenever their systems give signals, they will enter the market without paying attention to how they feel about the signals.

During this period, traders were still influenced by emotions; they will still have to try to become disciplined. However, losing orders are no longer a concern because conscious-competence traders understand that those orders are an indispensable part of trading.

Traders in this period highly appreciate risk management. In addition, they are aware that Forex is not a way to get rich quick, and profit must be built in the long-term.

By continuing to accumulate trading experience, traders will reach the threshold of success: stage 5.

Stage 5: Unconscious Competence

Traders in stage 5 are successful ones. They have traded so much that they can trade almost automatically now, and discipline has become second nature.

The Bottom Line

Above are the 5 stages that all Forex traders have to go through.

Time to reach stage 5 will depend on the ability of each trader. Some people only need from 1 to 2 years, some people need between 5 and 10 years, and there are those who never reach this stage.

However, one thing is certain: without knowledge, you will never be able to reach stage 5. Having solid trading knowledge is an integral part of successful traders. So, never stop learning.

At Finmaxfx, you have everything you need to be a successful Forex trader. You can access a lot of Forex educational materials, from basic to advanced knowledge. In addition, we provide you with other effective learning methods such as webinars, videos, and analytics.

Trading at Finmaxfx, you will have access to advanced market analysis tools (including an economic calendar, technical indicators, market sentiment measuring tool, and social trading). Furthermore, you can also be supported directly by our financial experts who have many years of experience trading in the Forex market.


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