Who is Professional trader?

 

Perhaps one of the key questions that arises among amateur traders That is,

when will they become a professional? Always have questions like:

What should I read?

What is the best trading  techniques ?

What is the best educational videos?

After a while and a little progress !

What is the best indicator?

Which site gives better signals?

But what exactly is the answer to these question of whether I am a professional trader or not? A goal that you have to work on for years, but at least with the right direction you can avoid going wrong.

Basically, the trajectory of a trader has steps such as the following diagram

 

Expert
Upper Intermediate
Intermediate
Novice

 

Sometimes we see this sentence  from more professional traders or some books:

If we can keep our capital in this market, you will be a successful trader.

I agree with this statement and I will explain my reasons for this key sentence. Every day a lot of traders enter the market. The dream of success in the short term is really seductive. But many of these people leave the market very quickly. Let us explaining the above 4 steps for better understand the reality of the market .

1-Novice:

As a wealth seeker, you will be attracted to trading by seeing advertisements, definitions of friends and websites. Every day he reviews his dreams of success and enters the market with capital. This capital can be from a few dollar  to several million dollar . (My descriptions, regardless of the market, can be the ordinary stock market or the forex market. Only in the forex market are the risks much higher). This novice trader will face huge losses immediately after a few trades, although some of trades are closed with small profits. Here he will feel the meaning of being a novice and the need for knowledge will be fully felt. A more professional trader will tell you two things

  •  Completing technical knowledge
  •  Money management

So the main characteristic of a novice trader is not knowing the knowledge of technical analysis and not using money management. At this stage, he will basically lose some of the wealth he has invested. Usually, more than 60% of those who enter the  market and leave the market at this stage.

2- Intermediate trader:

At this level the trader starts learning and goes to different classes, reads the books of famous traders and sees various educational videos. In classes, he is taught to invest a certain amount of capital in each transaction. On the other hand, he learns new techniques every day and starts testing them. Although his losses have been reduced, he still in loses, but the smart trader has controlled losses and does not suddenly lose a large amount of his capital. At this stage, consecutive losses cause more than 30% of traders to leave. The trader who is still working at this stage has two characteristics

  • Has general technical analysis knowledge
  • Learned capital management (determining the appropriate loss limit)

Step 3:Upper intermediate trader:

In my opinion, this is the most important step for become an expert  trader. Because you have to use your creativity. First let’s see what this trader is like. These traders do not lose, but his account does not grow either! How can that be? Yes !. He usually equals his total gains and losses and only retains his capital. As we mentioned at the beginning of this article that if you can keep your capital ,you are successful. it’s because you passed through three steps, and that’s very valuable. Let us describe the characteristics of trader around this level.

  •  He has relatively good technical knowledge, but the key point is that he has his own strategy and trading method. He does not use any technique, although he knows almost of technical analysis technique . He has turned his strategy to a  law and execute that line by line .
  •  He continues to use the capital management he has learned from the previous stage and has even developed his knowledge and experience in it. The question is, what is the problem ? A professional trader here fully understands what I am saying. This trader does not allow gains to grow while adhering to losses. We allow losses to be lost in the wrong trade, but we close it for fear of losing a small profit before reaching the target of the trade. This problem is a psychological problem. Man suffers losses but is afraid to react to his success. Let us illustrate this problem with an example

A trader has done 10 trades, of which 6 are loss-making and 4 are profitable trades. The results are as follows:

If the losses and gains are set correctly, we should end up with a profit of $ 290 and a loss of $ 180, resulting in a profit of $ 110. But many traders close their trades manually for fear of losing profit. This trader has made a profit of $ 165. This is especially evident when several consecutive losses have been made. Here we see that instead of growing the account, the account is in place, and this is a cancer for traders, because on the other hand he has gained high confidence in his technical analysis, but psychologically it is completely contrary to market reality. These types of traders have behavioral and psychological problems, but they have no problem in terms of market knowledge. Only two to three percent of traders go from this stage to the professional trader stage