Process and psychology

Does experience make traders better?

Retail forex traders mostly do not improve with time. They learn whether they are good, and many quit.

Well documented

Found repeatedly in peer-reviewed work or regulator data.

Consistent with other work on learning by trading.

What it is

A study of retail forex traders found no evidence they traded better with experience, but they responded to their results by leaving or trading less when unsuccessful.

What it suggests

Time alone does not build skill. A record that shows what is working can.

How to check it

Compare early and recent results with the sample sizes shown.

Common mistakes

Assuming more hours means more skill.

Sources

Hayley and Marsh (2016), What do retail FX traders learn? Journal of International Money and Finance 64 (citation and headline finding only)
Seru, Shumway and Stoffman (2010), Learning by trading, Review of Financial Studies 23(2) (citation and headline finding only)

Related lessons

Written in our own words. Education only, not financial advice.