How To Learn To Trade Online In 2020

Learning to trade is a life long process as you modify and improve the trading systems and strategies you are using.

But there is a point where you become profitable more often than not and that requires work.

My question is:  How many hours do you spend on your quest with learning to trade?

From price action, structure, trading indicators, all the way to risk management and trading psychology.

When it comes to learning anything new (or to refresh what you already know), quality over quantity is key.


The Art Of Learning To Trade

There are two distinct ways we learn and both of them are needed to begin to not only understand but also master what you are studying.

1. Focused Learning

This type of learning is what you are doing as you sit and work through the charts or read up on market mechanics.  This is intense focus which is not to be confused with checking emails while you are studying.

Multi-tasking is not the preferred method of  studying anything seriously.

During this intense type of learning and digging into the material, you are using what is called “working memory”.  Think of working memory like a pad of paper that only has a few sheets left.  There is a limited amount of information it can hold.

The problem is that much like your pad can run out of paper, you can only store so much information in the working memory.

After a while, all your intense focused learning simply becomes wasted effort as what you began with at the beginning of your learning session, becomes scattered.

This is when the other stage of learning comes into play.


2. Diffused Learning

Diffused is the opposite of focused and this is where you allow your brain to piece together everything you are learning.  Think of it as closing down your computer and simply going for a walk or grabbing a coffee.

In the background, your brain is sorting through all the information you have been studying to learn to trade.

I’m sure many of you have experienced going to bed thinking what the solution to a problem may be and you wake up with the answer.

This is the diffused process of your brain going to work and this process has a huge impact on your ability to learn whatever it is you have set your mind to.

So what does this have to do with trading?

A lot.


Limit Your Trading Study Time

Sitting for hours in front of your screen or diving into trading books or trading tip blogs can be compared to cramming for the final test in school.

Cramming is not the way to go into the testing center ready and able to pass the test.  It is also not the way to learn what you need to know to enter the trading world


When learning to trade or anything else, you want to learn in bits and pieces repeated over time and not in one intense session.  Yes, you may understand the material but at this point, it is not an understanding that allows a practical application.

If you were designing a trading system, how long could you sit and evaluate these types of outputs before missing something?

learning to trade analysis

Too often in trading, people suffer from “illusion of competence”.

They think because they understand a concept, they can apply it.

This is one of the reasons many traders jump in with real money long before they are ready. The result usually does not end positive.

These bits and pieces all assembled is what makes up the knowledge of trading that we retain and are able to implement.

But to focus on “learning how to trade” is not the best route either.

That is the end result of what you are doing but in between the beginning and the end, there are many steps.

That is where your attention should be.


One Step At A Time

Let’s take an idea where as part of your trading, you want to learn all about certain trading patterns like chart pattern triangles or systems like the Golden Cross.

That pattern or moving average cross is just one piece of the puzzle and instead of focusing on the big picture, you dial down into understanding that particular pattern and each of the components.

  • You learn the why behind it.
  • You learn what a failed pattern looks like.
  • You learn about stop placements.

You learn bits and pieces of the trading pattern (chunks) and over time they come together in a cohesive structure in your mind where you will be able to point one out on a chart without much effort.

And you repeat the practice of finding them on charts over and over again in the days ahead.

When you find them, you set the chart in replay mode and you walk through trading them.

Think of the replay of the chart as testing yourself.  Find the pattern, set up the trade, and walk through bar by bar.  Constant testing of what you are trying to learn is another key to actually learning and mastering the topic.

Soon, you have a wealth of data to evaluate to discover if your approach to trading has any type of edge.

trading profits and loss

Over time, you become good at trading your approach where there is no second thought.

You learn all of that under the umbrella of learning how to trade.

It can be a daunting task if you look at all you need to learn in order to have a chance of being an effective trader.  Take it one piece at a time.

But no cramming.

Burying your head into the computer screen for hours and days on end is not the best approach.

There is where the Pomodoro technique comes into play.


25 Minutes Of Intense Focus

We can thank Francesco Cirillo for this simple idea.  Break your learning into 25 minute segments and then take a break.

Focused learning (what you will doing with the Pomodoro) is intense and is huge brain drain.  By committing to devoting 25 minutes of intense focus to a topic, you are only part way to getting the information into the longer term memory where it can actually be useful.

25 minutes and then take a break.

Or end your session and go about your day know that in the background, the diffused mode of learning has taken over.

So what to do with this information?

Understand that learning is a process that can’t be forced.

You must approach your trading education in a systematic way and ensure that when the time is supposed to be for learning, that is what you do.

But don’t do it for too long.

Use the Pomodoro timer to limit your focus mode of learning to 25 minutes of uninterrupted focus.

Leave your work space for a time to allow the diffused mode to begin to process and piece together what you have been focusing on.


Test yourself constantly throughout your learning.

Learning a new pattern you may want to trade?  Draw it out marking out all the essential components including where the pattern shows up on a chart.

Learning about biases that can affect how you trade?  Test yourself by writing out what you are learning after you have spent time studying it.

Walk-through chart step by step and watch what the behavior of price is around key zones.  For example:

  • Draw out support/resistance lines on key swings.
  • As price moves towards these zones, draw out what could happen.
  • Advance price bar by bar while adjusting your hand drawn chart and account for different scenarios.


Take Care Of Yourself

Do not neglect your health.

Studies have shown that during the day, metabolic toxins build up in your brain that are only flushed out during sleep when your brain cells actually shrink.

Running on empty for too long can cause less than optimal learning conditions.

Regular exercise can also increase your ability to learn.

Another thing you can do as you learn is to either set yourself up with a reputable trading company or find trading groups in your area.

Schools have study groups for a reason.

Often times we get so “hooked” on one process that we ignore others.

Group work can help you break out of one way of thinking and open the door to new possibilities.

Schedule your study time as a routine and seriously consider some of what has been talked about.

Don’t think that understanding equals mastery and give yourself plenty of time to really understand and be able to implement all that you are learning.

Learning to trade takes time. 

Give yourself time.

The markets will be here ready to give you profits when you are ready.


Author: CoachShane
Shane his trading journey in 2005, became a Netpicks customer in 2008 needing structure in his trading approach. His focus is on the technical side of trading filtering in a macro overview and credits a handful of traders that have heavily influenced his relaxed approach to trading. Shane started day trading Forex but has since transitioned to a swing/position focus in most markets including commodities and futures. This has allowed less time in front of the computer without an adverse affect on returns.