It does not take a lot for an individual to think about FX trading as a future career path. The reason for this is that forex trading is well known for its lucrative nature even amongst people not involved with the industry. The stories of George Soros and Warren Buffet are prime examples of how the foreign exchange has become famous.
While becoming interested is easy, what is not easy is to actually decide to enter the market. This is possibly why so many individuals decide to experiment with forex trading on a part time basis before actually quitting their jobs and entering it on a full time basis.
Just like entering the FX market is more difficult than becoming interested in it, succeeding in it is significantly more difficult than entering the market. There is a clear career path that most forex traders follow in the forex market. This career path can be broken down into three stages.
For a new FX trader, it is important to know these stages because such knowledge would also increase the trader’s self awareness. In fact, if you are aware of these stages then you would also be aware of what you need to do to move on to the next stage. Effectively, you will always be looking to improve yourself as an FX trader.
The Novice Trader
When you enter the foreign exchange market for the first time and begin live trading, you enter the stage of novice trader. Novice FX traders are always trying to learn something new and if they are not careful then they make a lot of mistakes.
Thus, it is common for a novice trader to lose everything he or she puts up towards forex trading. This is epitomised by the fact that 90 to 95 percent of novice traders end up leaving the foreign exchange market. This is why it is recommended for novice traders to start with small account equity.
The Decent Trader
After a trader has learned everything basic about the FX market then he or she is capable of handling most of the processes inherent in forex trading. At this point, it can be said that the trader’s competence has reached a point where he or she is making profits from the forex market.
However, just because the trader has become fairly good at FX trading does not mean that he is going to end up making so much money that he can retire early. If you are at this point in your trading career then you should know that if you keep improving and refining your understanding of the foreign exchange market then you can become an expert.
The Expert Trader
Expert traders are extremely good at what they do. They can make money from most market conditions albeit being surprised by the occasional forex rate reversal. Moreover, expert traders have such a sound understanding of the market that they can diversify into selling signals as well as teaching beginners.
Once you reach this point in your FX trading career, all you have to do is keep pace with the changes in the foreign exchange market and forex industry to make enough to retire early.