How Do Professional Traders Trade?

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How Do Professional Traders Trade?: Professional traders are not magicians. They also start their journey as a beginner but as they get the experience they learned from the past adopt a trading plan and strategies that are worked for them.

Let’s have a look at the different qualities that keeps professional trader apart from amateur trader.

What Separate The Professional trader From The Amateur Trader

A professional trader does not have more screens to watch charts, better equipment, or better strategies.

A professional trader is defined by how he approaches his mindset while trading and how he maintains discipline and manages his trading routine every day.

Therefore, every amateur trader can easily obtain important factors by following a few steps and changing his approach.

The following principles will help you to understand the actual difference between an amateur and a professional trader.

1. Distractions and focus

Amateur Trader:

Spends time watching YouTube videos, using social media like chatting on Facebook or watching Instagram reels, or spending time on TV while trading.

The amateur usually doesn’t have focus and does multiple things when there is no setup in sight or markets are sideways. Therefore, they miss opportunities easily and make mistakes when they execute trades.

Professional Trader:

When the professional trader starts trading, he has 100% focus and does nothing else, he only watch his charts.

He may get real-time news updates by tracking news websites or news channels.

 They know focusing while trading is more important than anything else and when there is nothing to do when markets are sideways and there is no trading setup in sight, he turns off their computer and starts working on their trading skills or just takes the day off.

2. Wasting screen-time

Amateur Trader:

Amateur traders watch charts for hours at a time and randomly change through timeframes to search for a trade. The myth is that spending more time on screen will help a trader to become better and it is still believed among amateur traders. Watching charts for a long time has no value whatsoever if you don’t know what exactly you want.

Professional Trader:

Before going to trade, the professional trader has a detailed trading plan and at that time he knows what he is searching exactly.

He does not switch timeframes but just waits patiently until his trade setup comes.

He does not waste his time by just sitting in front of his screen and watching charts all day long when there is nothing much to do.

When they don’t get any trade according to their trade setup, they go back to his trading records and review his past performance to find his edge to become better.

3. Overconfidence after a winning trade

Amateur Trader:

The amateur trader believes that after a few winning trades in a row, he has higher-level skills or that his trading strategy is very strong, which makes money easily and cannot fail anymore.

The problem starts after a few winning trades, amateur traders start taking too much risk and take trades that break their trading rules because they know and can feel what will happen next.

It is common that after 4 or 5 winning trades, amateur traders lose all their profits on only one trade just because they are overconfident.

Professional Trader:

The professional trader knows that he will not become a super trader suddenly only with 4-5 successful trades and he cannot forecast what is going to happen next in the market. A winning trade is normal and will be done time after time; it is just how trading as a professional works.

A professional trader always follows his plan very strictly, and every time he knows his risk and money management rules and never lets one single losing trade wipe out a big amount of his capital.

You also read: How To Become a Professional Trader in India?

4. Loss of confidence after a losing streak

Amateur Trader:

When his trade is in a losing position, he loses confidence in his trading strategy and skills.

An amateur trader tends to change his trading strategy when he gets a loss or ignores his trading rules because he wants to make up for his losses.

Losing trades are dangerous for amateur traders because it leads to big losses when they try to cover up their lost money.

Professional Trader:

For the professional trader, winning and losing trades don’t matter. They are unavoidable and will happen over and over again.

 A professional trader knows that his trading strategy will make him money over the long term. A professional trader follows his rules strictly and never loses his mindset if he loses.

5. Taking losses personally

Amateur Trader:

For amateur traders, It is hard to accept that their trading strategy was wrong, and because of that, they are going to lose money.

Mostly new and unpracticed traders can not accept being wrong and when they find that their stop loss order is about to hit, they change their mind and do one of the following things

  • Setting a stop loss further away to avoid the actual loss
  • They hope for the price to turn around so they add more to the losing position to get rid of the loss faster.
  • Removing the stop loss order because they assume that the price will have to turn around

All these plans will lead to big losses and wipe out the account. A trader who is going with one of the three mentioned cases keeps far away from becoming a professional trader as possible.

Professional Trader:

The professional trader stick by the following two rules:

  • One trade is just one trade and it doesn’t matter what will be the outcome.
  •  The stop loss order is the price level where you completely agree that your entry was wrong and you have to exit the trade.

The professional trader knows that the outcome of one losing trade is wrong and it can finish his trading career.

Whether a single trade is green or red does not matter because there will be thousands of trades coming soon where he can make a profitable trade.

A professional trader is also ready to take a stop loss because he knows that it is the point where his trade is wrong and that he will exit the trade happily. After all, he knows that it is not going to make him big money.

 6. Do you need money fast?

Amateur Trader:

What is your trading goal?

Do you think that trading is a way to make a lot of money in the short term?

Research shows that traders who believe that they can get rich faster with trading will lose the most amount of their capital.

Professional Trader:

For Pro. traders, trading is a business. The professional trader does not trade for fortune with a few lucky trades or doesn’t trade just to play it like a thrilling game.

Trading is not an easy profession and it requires patience, hard work, and a long time before you can make consistent profits. In the end, being a trader is a business like others. We hope that you like our blog “How to Do Professional Traders Trade?”.


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