Ask Colin

If it takes 5-10 years to become a proficient trader, what is one to do in the meantime?

Let me explain fully what the 5-10 years of learning means. It is similar to what you need to learn for any other profession:

1. You will have 2-5 years of formal study. Something like the Securities Institute of Australia's Graduate Diploma in Applied Finance and Investment.

2. Then you will need a similar period of getting experience. All this time and thereafter, you never stop learning. I recommend reading one book about the markets every month.

In the first stage you will need to have most of your money with a professional fund manager, because you will not know what you are doing.

Then, as you learn, you can start to trade very cautiously. Read Gerald Loeb's classic book The Battle for Investment Survival. One thing he suggests that I really like is that you start with one trade. Take it right through and close it out before you take another one. Continue with one trade at a time until you are making money. Then you can think of running multiple trades.

Until you can prove you can make money, most of your assets should still be professionally managed. As you prove your ability, you can gradually take more and more of your funds into your own hands.