Why FX Traders Never Stop Learning

A good sign that you are not growing as a trader is when you think you've got it all figured out.
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We have a quick question here from a new subscribers saying that they’ve been trading and learning for a while now, a couple of months, but still feel that they know so little about the markets and wants to know whether a trader ever stops learning and reaching a place where they can just trade without feeling out of their depth so to speak.

Thanks for this question first of all. It’s a very important one that we need to unpack.

The thing about the market is that there’s always going to be something new happening in terms of sentiment drivers. Every day brings fresh catalysts. It brings fresh fundamental news flow, and those catalysts are not always going to move the market in the same way. And it will largely depend on what the market’s expectations was going into those events. So just from a day to day sentiment point of view, the market will always be able to give you something new to learn and new to analyze in that sense.

Now, apart from the day to day sentiment changes in the market, also consider the fact that the market is not only currencies, right? You have different asset classes that react in different ways to changing situations and scenarios.

So even if you reach a place where you feel you have currencies all figured out, so to speak, there are more asset classes that you can explore for additional opportunities.

Now, apart from Forex, there is commodities, there’s the bond market, there’s the equity market. So the opportunities to learn more things will never go away for a trader. And even if you don’t study and learn about these other markets to, to trade them, all of them really relate to Forex in some way or another, as all markets are intertwined and interconnected with each other. So even if you learn more about them just to help you to trade currencies better, that’s fine, but the point is you’ll never reach a place where you’ve learned all there is to learn and can basically just trade without sharpening your skills and broadening your knowledge.

So just take something like central bank policy meetings as an example. These are some of the most profitable events to trade, but they can also be some of the most confusing and frustrating at times due to all the qualitative elements involved in these meetings with the markets, trying to decide whether a banks tone was more damaged or less damaged than expected or more hawkish or less hawkish than expected.

So it gets easier to trade and track these type of events with practice, of course, but keep in mind that you won’t be able to just sit back and relax, so to speak. They are always going to be new changes and new developments that you need to stay on top of and learn about to be able to trade these events better.

For example, right now, in the current environment, something like yield curve control is getting a lot of focus for something like the federal reserve. So if you don’t know what yield curve control is then you would need to do some additional research and make sure that you are up to date with what it is and why it’s important and more importantly, how it might affect the currency market that you are looking to trade so that you can trade it accordingly.

So to your question, I don’t think there will ever be a place where you will stop learning new things about the market. Of course, as you grow in your experience you will no doubt get better at analyzing and trading different environment.

But I think the moment you reach a spot where you think that you’ve learned enough and can just sit back and trade, I think that is a place to be very cautious of because not having that constant development in your trading and in your knowledge will eventually mean that you get left behind, so to speak with some of the latest development in the market.

So hope that helps with the question. Any other questions as always, don’t hesitate to let us know.

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