How Long Does It Take to Become a Consistently Profitable Trader? 

Last Updated: February 6, 2021

By Rayner

You’re reading this right now because you want to know how long it takes to become a consistently profitable trader.

You’ve heard others say it takes at least 2 years.

Some would tell you it takes 5 years.

And there are a few who still suck at it after 10 years.

So, what’s the answer?

Well, here’s the truth:

All traders go through 4 stages in their trading career. And how fast (or slow) you get to the profitable trading stage depends entirely on you.

Let me explain…

Stage #1: The hyper newbie

This is the first stage of your trading career and you’re filled with hopes and possibilities.

You have hopes for:

  • A better future
  • Getting out of poverty
  • Getting out of the rat race
  • Trading full-time and saying FU to your boss
  • Becoming the next champion trader (Paul Tudor Jones? Pfff, get in line…)

So, you study everything that you can get your hands on like RSI, MACD, Fibonacci, Price Action, Chart Patterns, Candlesticks, ADX, Trendlines, etc.

At this point, your confidence level is high as nothing can stop you. You put on a few trades and even have a few winners in a row.

You think to yourself…

“Trading isn’t as difficult as it seems.”

“That 95% of losing traders are pathetic.”

“Let me show them how it’s done.”

This goes on until you hit a loss. But that loss is no ordinary loss because it wiped out your entire trading account.

Now, that’s when you realized trading isn’t all about trading strategies, indicators, patterns, etc. because there’s something called risk management.

That’s when you move onto stage 2…

Stage #2: The risk guru

This is the second stage of your trading career where you’ll have probably blown up a few trading accounts.

At this stage, you understand the importance of risk management and how it plays a huge part in your trading.

So you study things like how to calculate your position size, how to risk 1% of your capital on each trade, risk-reward ratio, etc.

Slowly, your huge losses disappear into oblivion (except for the time when you break your rules) and you’ve noticed a leap forward in your trading results. Yay!

So, you continue to practice risk management for every trade like having a stop loss, risking not more than 1% on each trade, having a minimum of 1 to 1 risk-reward ratio, don’t average into losers, etc.

But somehow, you’re not quite there yet.

Yes, your losses have been contained but, it seems your winners are still not compensating enough for your losses — and this still puts you in the red.

And if this goes on forever, you’ll eventually suffer death by a thousand cuts — not good.

This is when you get your next “aha” moment and realized risk management isn’t enough for you to be a consistently profitable trader.

So, you move onto stage 3…

Stage #3: The lone ranger

At this stage, you know a lot about trading like the different types of trading strategies, indicators, patterns, how to apply proper risk management, etc.

But still… you’re not getting the results you want.

That’s when you figured risk management, discipline, psychology isn’t enough if you want to be a consistently profitable trader.

Because your trading strategy must have an edge in the markets, without it, even the best risk management or trading psychology won’t save you.

So, what exactly is an edge?

This is something you do repeatedly over time that yields a positive result.

Here’s an example:

Imagine you have a special coin that rewards you $2 every time it comes up Head. If it comes up Tail, you lose $1.

Do you think you’ll make money in the long run?

Heck yeah!

Because you have an edge in the coin toss as your winners are greater than losers.

And it’s the same for trading!

So once you have an edge in the markets, combined with proper risk management, that’s when you move onto the next stage…

Don’t worry if you don’t know how to find an edge in the markets because, in the later section, you’ll discover tips & tricks to help you quickly level-up through the different stages. More on that later…

Stage #4: The business owner

The final stage is where you become a business owner.

At this point, you’ve realized a few things…

You need money to make money in this business

Trading isn’t a get-rich-quick scheme. Instead, it’s a get-rich-slow scheme.

It takes time and money to grow your business. Here’s an example…

$5,000 account that earns 20% a year = $6,000

$5,000 account that earns 20% a year for the next 20 years = $191,688

$10,000 account that earns 20% a year for the next 30 years = $2,373,763

Once you’ve understood the math, you’ll go all out to add funds to your trading account and look to compound your returns for the rest of your life — that’s where the magic happens!

You reduce your risk when you trade multiple trading strategies

If your business only has one source of revenue, then you’re at risk of going out of business. Why?

Because if that revenue source “dries up”, then you’ve got no money to cover your expenses — and it’s game over.

That’s why the best companies in the world have multiple sources of revenue. For example…

Amazon has income from its e-commerce platform, a yearly membership subscription (Amazon prime), offers cloud computing (Amazon Web Services), etc.

And this is the same for your trading business!

You want to adopt multiple trading strategies so you can reduce your risk and have “multiple sources of income”.

And finally…

You must level-up your trading psychology

Now, the mental fortitude required to trade a $10,000 account is vastly different from a $1m account.

If you risk 1% on each trade, that’s about $100 (on a $10k account).

What about a $1m account?

That’s a $10,000 risk per trade.

Feel me?

As you can see:

Even though you’re at the last stage of your trading career, your learning is not over.

You’re still developing new trading strategies, adding funds to your trading account, and training your mental fortitude to handle larger sums of money.

Cheat code: How to quickly level-up your trading without going round in circles

At this point, you’re probably stuck in 1 of the 4 stages.

So now the question is, how do you quickly move onto the next stage?

Well, that’s what you’ll discover right now…

How to get out of stage 1 (hyper newbie)

The reason why most traders fail at this stage is due to unrealistic expectations.

So here’s the truth, simply put:

Trading is a get-rich-slow scheme. It takes years of effort, money, compounding, and discipline to grow your trading account into something significant.

So don’t expect to trade full-time after taking a weekend course, or with a $1,000 trading account — the odds are immensely against you.

Pro Tip:

Some of the best traders and fund managers make an average of 20-30% a year.

If you’re shooting for anything higher, you’re either the next Market Wizard or downright delusional.

How to get out of stage 2 (risk guru)

Getting out of stage 2 is all about understanding math.

No worries, it’s so easy that even a 10-year old can do it.

Here’s what you need:

  • The distance of your stop loss (in pips)
  • Account balance
  • The % risk on the trade

Then just plug those numbers into a position sizing calculator like this, and you’re good to go!

If you want to learn more, then check out The Complete Guide to Forex Risk Management and Position Sizing

How to get out of stage 3 (lone ranger)

This is a lonely stage because it seems like nobody understands what you’re doing.

Your family thinks you’re wasting your life away, your friends don’t get what the heck you’re doing, and doubt starts to creep in to whether you can pull it off successfully.

So here’s the deal, in this stage, only you can help yourself.

More trading strategies, techniques, patterns, or whatsoever won’t help you anymore. It’s time to discard 90% of the stuff you’ve learned and focus on the 10% that matters.

But how do you know what works and what doesn’t?

That’s where backtesting comes into play.

This is where you validate your trading strategy (using historical data) and find out whether it works, or not.

If you want to learn how to do it systematically, then check out The Essential Guide to Systems Trading.

Alternatively, if you’re a discretionary trader and want to do it manually, then check this guide out.

How to survive stage 4 (business owner)

In this stage of your career, you’ve beaten 95% of all traders out there.

Now, it’s time to scale up and diversify your risk.

Here’s how…

#1: Add funds to your trading account

As you know, you need money to make money in trading. So, to scale things up you need to add new funds into your trading account.

This could be money from your job, businesses, etc.

#2: Split your money across different brokers

Here’s the deal, no broker is 100% safe.

That’s why as a business owner, you must split your funds across different brokers.

Also, different brokers specialize in different niches like stock trading, FX trading, Futures trading, etc. So go with a broker that suits the markets or strategies you’re trading.

#3: Always be a student of the markets

Remember this, you’re forever a student of the markets even if you’re already profitable.

That’s because you can always improve your trading results.

For example:

  • Adopt an uncorrelated strategy to your portfolio so you can smooth out your returns over time.
  • Discover a new trading strategy that lets you profit in both bull and bear market conditions.
  • Tweak your existing strategies to make it even better

If you need ideas for new trading strategies and techniques, then check out the list of my recommended trading books.

#4: Create multiple sources of income

For example…

You can be an affiliate for products or services.

An affiliate is someone who earns a fee (or commission) when someone signs up for a product they recommend.

Need some ideas?

Then here are some products (or services) that offer affiliate partnerships…

(Note: I’m not endorsing any of them. These are just examples for educational purposes.)

Brokers – ICMarkets, Blueberry markets, etc.

Platforms – TradingView, CQG, Trading Technologies, etc.

Tools – TraderVue, Forex Tester, etc.

The possibilities are endless.

All you need to do is reach out to the service provider and ask them if they offer any affiliate partnerships, and that’s it!

A word of warning…

Never promote products you don’t believe in just for the sake of affiliate fees — it’s not worth burning bridges for short-term gains.

At this point…

You’re probably thinking…

“Okay Rayner, so how long would it take for me to become a profitable trader?”

Here’s the deal:

I can’t tell you how long it’ll take to become a profitable trader because it depends on many factors like which stage you’re currently at, your attitude towards trading, etc.

For example:

Marty Schwartz, a market wizard, relied on fundamental analysis and lost money for 9 years. Then, he shifted to Technical Analysis and made millions ever since.

Now, you might think Technical Analysis is the answer, but it’s not. Marty Schwartz found success in the markets because of his winning attitude. Technical Analysis is a medium to his success, not the driver of it.

“I always laugh at people who say “I’ve never met a rich technician” I love that! Its such an arrogant, nonsensical response. I used fundamentals for 9 years and got rich as a technician.” — Marty Schwartz

Now here’s what I’d like to know…

What stage in your trading career are you at right now?

Leave a comment below and share your thoughts with me.

  • Trading for 180 days. Fluctuating between stage 1/2,
    5k cash account. P/L -452.00 to date bal 4554.00
    Risk management 10.00 per trade
    Trading 1200.00 per day. 1-3 trades per day.
    This business continues to humble me
    YourTube videos been a strong correction to my initial trading strategy, which was no plan!
    No money management, no stop loss.

  • Rayner have really gone far like I risk 2% I have a risk reward ratio of 1:3 what I see is I can actually make 20-30% return monthly.

  • Hello Rayner,
    I want to buy your book , pull back stock trading system but l want a soft copy , l mean in PDF format, how do l get it .
    I don’t want the hard copy.
    Just let me know so that l can access it as early as possible

  • Still at the first stage. This is quite expository, I could easily find myself in the mirror of these highlights. I still have a long way to go.
    Thanks for these nuggets Rayner

  • This is so mind opening, although I have blown of 4 accounts already. I’m sure this book would be a game changer for me and a start of great things.

  • I just finished stage three, I am now at stage four, where capital is what I am tryining to gather to grow my trading account,

    Thanks Much for the education Teo

  • Awesome article Rayner. Now, with the statement, does it mean a strategy may work on one broker and NOT work on another?
    “So go with a broker that suits the markets or strategies you’re trading.”
    Thank you so much

    • If you trade FX, then you’ll need to go with a broker that offers FX (not just stocks).

      If you have a high frequency of trades, then go with a low-cost broker.

      Etc.

  • Baby steps..Keep to one stock or whatever you r trading in its present mode like day scalping if there’s volatility
    change it when a change in activity occurs .multitasking different ones at same time is no good leveraging is no good

  • Hey Rayner, I have experienced stages 1-3 in almost 9 months since I started Day trading, I have blown my account twice so far, I am resting now

  • This article perfectly summarized what trading financial Markets is all about. My greatest discovery is that it is practically impossible for Market to behave in an irrational way, however one thinks about that, the opposite is true. Markets has its own rules and follows it in a disciplined way. It is a herculean task however for everyone to find that out for himself or herself. Market is highly disciplined. A lot of us joined the Market on a erroneous conviction of a get rich quick promises. Men!!! Too far from that. It’s a get rich slowly.

  • Stage 1. i totally agree with everything you said. I went into trading blindly and I had humble pie for breakfast, lunch and dinner and got served it as dessert also. Lost loads of money. But My uncle and Rayner gave me hope. Uncle retired at 50, went into trading and still at it at 80. Learning hard and fast. Thanks Rayner.

  • Very nice article. I came into the world of trading in 2014, now i am between 3 and 4. I have my daytrading with futures and my swing trading with forex on different brokers. I have my long term real stocks investment account with another broker. The article above is like a 1:1 mirror. I remember I came to a point where i wanted to quit trading like 2-3 times but i always knew there is something. Now i am here and its good to know that i am not alone going through this. I have learned alot about myself during that time and i know the best ist yet to come 🙂

  • Stage 3 …..i knw i have a system with edge but still doing some silly mistakes trying to improve them…..thanks rayner for your contribution in my trading carrier struggling from last 3 years bt now with you hope is there…Thanks to u

  • I think I might be fluctuating between 1 and 3. I bought few courses, indicators and then signed up with account management services for Forex trading. All of which lost me money close to 25K + plus the valuable time I missed with my wife and kids. I have been at this for 10 years now. Still not a single penny won. I demo traded for over 5 years and still doing it with live trading sometimes. Since I demo traded for too long, I am stuck between demo and live trading. I think I have couple of winning methods when back testing. When forward testing I loose money on them.
    This is where I find problems with back testing. See when you back test, you will be taking trades on all sessions (Asia, UK, US). However in reality, one cannot trade all sessions. So my forward testing fails due to think (I think). So I think my methods are good on all sessions but not on NY (I can trade only in NY session). So I am back to the drawing board to find something that works on NY session.
    If I can give one advice to others, put a daily time limit to your trading/ learning and don’t forget to enjoy spending time with your family. Otherwise, you will regret it one day.

  • Hi, Sir, I’m in the beginning stages. Been eye opener, not what I expected, but I’ve jumped in reading, watching, writing etc.
    Your comments are true, not an easy choice but it’s one I know I will succeed in. Having platforms like this is super. It expands ones knowledge, connects etc.

  • Thank you for sharing and putting all this learning material together of what you have learned over more than a decade of trading. I know the importance of risk management, risk/reward ratios, consistent trading of your plan, being patient for your setups that match your plan. I barely started forward testing my strategy with my son, so I guess that would put me in stage 3.

  • Stage 4. Part-time options trader now. Scaled account up to significant proportion of my total net worth. Became “consistently profitable” 5 months ago, traded 95 positions, but still building up track record. Main challenge is still training mental fortitude to be very comfortable with trading at this size and prepare to scale up in the future.

    I was at Stage 1 when I discovered you about 3 years ago! Thank you for getting me started and saving me lots of time/money by not falling into the common traps.

  • Dear Rayner
    Thanks for the nice write up. From the above i could say that i am in the end of the 2nd stage and entering the 3rd stage.

  • Rayner I have been trading live for 2 months and lost money in half my trades that outweigh my winnings. I have good money management and want to move up to the next level. I am very dedicated to becoming a profitable trader. My account doesn’t have enough money probably but I’m forced to use what I have due to COVID costing me almost everything I own. I really enjoy your training videos and hope to become a profitable trainer in the next year or so. Thank you!

  • just coming into Stage 3 after about 5 years, lost absolutely loads and realise ‘slowly slowly catchy monkey’. I only need about 20-25pts per day for the next 6-8 months to rebuild a small account to be earning what the same as I do in my full time job. I am not going large so as to not be tempted with too big a lot size.

  • Powerful stuff.
    Defs stage 3 – 4
    I needed to read that. Thank you.

    I’ve been getting alot of confirmation these past 3 weeks. Felt like a lone ranger for the past 3months using a new strat. I call it version 13.0 lol!
    Thought I was losing my marbles until I got a job offer because my analysis was spot on which was part of their test.

    Im finally getting out of the lone ranger stage and “my people” are also starting to believe in me. Which is a big deal mentally. I can see the changes on my entries and exits but for someone else to see your strat in action is rewarding #confluence

    I’m no trading guru but I do work my butt off everyday at least 3-4 hours at the charts.

    Covid hit me hard financially and I needed to up my hussle plus I have a wedding to pay for.

    “We learn everyday”

    Thank you for all your cool vids and tuts. Rayner
    Keep up the good work!

    • Just recently blown my $1000 account for XAUUSD as I was trying to trade consolidation, and unfortunately a trend started against me, and I did not put a SL, and I picked the worst time to hedge.. etc etc. One problem snowballs to another.

      Initially I could’ve just been down by 20-30% even without the SL, but because I refused to admit my mistake early on, I aggravated the losses to 90% losses (considered as blown account). That’s when I realized I am very much lacking in technicals for XAUUSD and I am now spending weekends trying to create my own strategy, together with SL planning (risk management).

  • Thank you for everything you have been doing.
    Keep up the good works.
    I actually signed up to a company that will help train and coach me to be a successful trader, for close to 4months i didnt even know what to do when i open my MT4 or 5 demo account.
    Even where SL was i didnt know until i met you and gradually am getting more understanding of how forex trading is and all that.
    Thank you Rayner.
    God richly bless you.

  • Please who can help me with the book
    It’s been my pleasure to study it but I can’t afford it Rayner’s has been my outmost books I have ever been interested to study after seeing series of good return comments from people. Please if you be able to help me with the group I will be very much interested
    Godsonkelvinn@gmail.com

  • Teo I will say am on the 3rd stage after blowing 4 different accounts of 100$ each I have to go back to the risk management stage2 open another account and currently doing averagely 7$ a day as since January 4th 2021.Teo thanks for the materials you been sending God bless you and enlarge you the more thanks so much

  • I think I’m currently in stage 3 though I started trading less than one year ago but I’ve been able to leverage on people’s efforts(people like Rayner Teo and others) by learning from them. I really hope to become a very profitable trader very soon.

  • Full time subscriber…Rayner, firstly let me say that I always find your teachings and shared information are spot on. I am currently waking up from a short rest after staying up trying to scalp the market (2am to 5am) with little to no gains. I am mostly forward testing my strategy, which is showing very promising results so far. I also have many other intraday and swing trade strategies,

    However, getting or stamping “THE EDGE” is where I am currently working on. I would even say that I am already at stage #4, but hovered back the 3. I am working hard on this for many (at least 3) years now, and need to get it and get it very clear for long-term consistency and profitability.

    Any further advise and help to work out the kinks, I look forward to. Sorry about the long comment…thanks for asking though. This helps me in identifying where I am.

  • Thanks for this rayner please can u share with me the different strategies that I can adopt for me to become a profitable trader like 10 so that I should show what suit me the must then we can go from there I really need that please if u can just write 10 or 20 most best strategy of ours then I would backtest it

  • I have almost covered all the stagies but have yet organized my self I got strategies in my head but it still in dis order that’s why if u can just give me a hit of like 10 to 20 good strategies that I can choose from rayner

  • I am at Stage 3. Some days I get lost wondering if trading is really worth it because my family don’t see it as an income, my friends see it as a passive income. My mum spoke to me one day about taking a course to further my education so that I can get a real job and it really broke my heart that I am physically alone no one to talk to about it (except online, with people I don’t know)and I cried.

    I still have some learning to do though, having issues on how to know my risk/reward ratio on charts and how to let winners run. And thanks to you Rayner, I am learning.

  • Hey rayner this was really helpful! I’m slowly heading outta stage 3. I hope it all makes sense soon. Thanks alot for this piece

  • Thank you Rayner for this self insightful discovery. Now know I’m transiting into stage 3. I keep learning to move forward. But have a question: When can I quit my Full time job to dedicate my full time in trading when that job takes me all my time?

  • Very insightful and helpful for traders to understand these stages of growth in the life of a trader. Thank you for sharing this. Was immensely helpful.

  • Thanks Rayner for sharing your hard work. You are very knowledgeable, down to earth and a very generous person indeed. I am impressed with your work and had been reading your articles and watching your youtube off an on for 6 years. Last year i bought Price Action Trading Secrets and my trading returns had improved drastically by following your teachings. I would truly recommend serious traders/investors to give up a few cups of cuppacino and get a copy. It’s a very profitable investment on yourself.

  • I’m still at stage 2. It’s tempting to trade higher in the hopes of getting a higher return but that would also mean your breaking your risk management plan. In the long run you will definitely blow up your account. So stick to your plan. Do your thing slow and steady. Thank you, Rayner!

  • I can say I am at Stage 2-Risk Guru.

    My story is that I learnt a really good trading system that taught me things like position sizing, risk management, etc.
    But years later, when I was working and had saved enough to start trading, I somehow abandoned all my theoretical knowledge and took some random trades. This was in 2020 when the market was extremely bullish. I had a string of winners but I knew this was just beginner’s luck. So then when I decided to actually follow my system in 2021, I went deep in the red. While the market started going sideways, I started getting stopped out and incurred a large amount of small losses. Then I just decided to make up for it by taking a huge position in GameStop/AMC at the WRONG time and ended up making a big dent in my account. The only thing that prevented me from losing all my money was my knowledge about position sizing. While I did break my risk management rules on GME and AMC, I did that only to some extent. After that huge loss, I promised never to take trades based on FOMO.
    Right now I am just working on mastering the process without looking at profits or loss. I religiously follow my risk management rules. I am still working on polishing my exit strategies so I don’t leave too much money on the table. It has been a bit difficult because the market has been kinda sideways (at least the tech sector) over the past several months. So, I am learning to spot better trades and take them. I am realizing that naked charts have a lot of info and that indicators like moving averages are only to supplement my decision making.
    I am seeing some progress but I do have a long way to go. Thankfully I have a decent account for someone who has only been in the market for a little over a year (nearly $40k).
    But yes, my goal right now is to make sure I have a sound exit strategy to let my winners run and to know when it’s time to book my profits. I believe it’s all a part of managing how to manage/trail your stop loss along the way so that as the price moves on, you keep on trailing your stop loss and hence book the profits in case the price comes down.

  • Hello Team Rayner
    Alasan here, from The Gambia. Thank you so much for the useful knowledge that you pass on. I think the lone ranger is my next move, i am having wins but its not enough to cover.

  • Currently at stage 4(business owner)
    Struggling with capital buh I’m gonna fix that very soon
    The most important thing is that I have the skill and I’m good at it
    Wanna use this opportunity to say a very big Thank you to Rayner Teo, my trading journey started out when I joined your channel watching your free content which some people are suppose to pay thousand of dollars for buh you decide to give it out for free . A very big Thank you for the selfless attitude
    though I’ve been trading for 3 years and my trading skills comes from which I learnt from you and I will recommend anyone getting into the business of trading to submit yourself totally to Rayner Teo and trust me , your trading journey will change forever …

  • Stage2 after 1.5 yrs. #RAY! HOW SHOULD ONE EXIT MARKET AS NEWBIW UNTILL SUCCES. SEE GOOD ONLY TO TURN LOSS AFTER A WHILE..THANKS 4 YOUR INTITUTION

  • Hello Rayner I think I am in stage two. I noticed most times when I am a little bit in profit I just close the trade without waiting for it to reach TP target. Is that OK Ray?

  • I get to know which of the strategies that works ,I use support and resistance , Candlesticks patterns ,breakout trading strategies, reversal patterns ,Chart patterns and trendline…And I don’t know backtest all this if they are all working

  • I think I’m still in the super newbie stage right now. Because I trully believe I can turn a $1000 account into a $200.000 account in as little as 10 months. I even set up a well planned strategy for that with risk management and everything. I’ve been testing and learning with less than $50 account so far but will probably start at 1st of August. I will keep you posted of my outcomes

    • Hello, Vasco!

      The reason why most traders fail at this stage is due to unrealistic expectations. Trading is a get-rich-slow scheme. It takes years of effort, money, compounding, and discipline to grow your trading account into something significant.

      Just manage your expectation and continue to learn more. Good luck on your trading journey! Cheers!

      • Thank you Rayner!! For your support and all the knowledge you already gave to me. I’ll be around posting my successes as well as my losses, as I’ll climb the 4 stage ladder. One thing I have in my favour is the absolute commitment to this and fighting will to overcome the big struggle ahead

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