3 differences between a professional trader and a home gamer.

There are at least 3 differences between a professional trader and a trader who wants to be a professional.

Can look past current trade. Just like every move does not mean another trend neither does every movement in the P/L.  Satisfaction or disappointment comes at the end of a trading day, trading month, or never.

Entry price matters the least.  It is great to not take heat but it happens enough that it is important to learn from it.  Being in a trade gives a trader important feedback and a professional adjusts to that feedback.  A professional trader is not held to one price.  Where and how they enter the market is dependent on the market not a line on a chart.  They are in a hurry to exit the bad trades and patient on the good ones and the relationship between the entry price and current price is not a determining factor.

Professionals want it more. Working hard and producing are different.  A professional works with a purpose and a goal in mind.  They know that they have to do the little things in order to put themselves in a position to win.  It is easier for them to prepare, be discipline, follow their trading plan because they are tired of being on the other side.

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  • Griffin313

    I want it more but can’t enter a trade and take heat. I feel I am guessing, even when it’s at my levels. What is your suggestion to cure this?

    • I would look at how your define heat and how you define loss.  I would look closely at your trading plan (rules applied to strategy) and make sure you are confident in that.  This is something else on the subject. http://traderhabits.com/2011/06/pulling-trigger/ If you send me an email with more information about your experience and an overview of your trading plan I may be able to provide additional help. 

  • Unclear how exactly entry price matters the least.  What is entry being compared to that makes it matter the least?   Perhaps elaborating as well on your model of a “professional trader” will give clarity.  My belief is that entry price has immense ramifications regarding risk/reward potential and position sizing.  One aspect of my plan is consistency in positions sizing and to place between 20% to 25% of my account size into a trade, so there is a cap on the relationship between entry price and stop that I am willing to take or I’ll pass. 

    • There are three prices that you get from strategy; risk, profit potential, and entry price.  Entry price(s) changes based on current market conditions and how it has been reacting lately to your prices.  I define a professional trader as anyone whose main source of income comes from trading or full time trading.  Did not mean anything derogatory just needed the headline to pop. 

      Consistency doing the same thing can be dangerous in trading.  Doing the same thing despite different conditions can lead to unnecessary risks.  We trade according to risk price.  What is consistent is how much we risk per trade.     

  • Pingback: Getting out of the retail mindset. | traderhabits.com()

5 Responses to 3 differences between a professional trader and a home gamer.

  1. Griffin313 says:

    I want it more but can’t enter a trade and take heat. I feel I am guessing, even when it’s at my levels. What is your suggestion to cure this?

    • Eradke says:

      I would look at how your define heat and how you define loss.  I would look closely at your trading plan (rules applied to strategy) and make sure you are confident in that.  This is something else on the subject. http://traderhabits.com/2011/06/pulling-trigger/ If you send me an email with more information about your experience and an overview of your trading plan I may be able to provide additional help. 

  2. Michael says:

    Unclear how exactly entry price matters the least.  What is entry being compared to that makes it matter the least?   Perhaps elaborating as well on your model of a “professional trader” will give clarity.  My belief is that entry price has immense ramifications regarding risk/reward potential and position sizing.  One aspect of my plan is consistency in positions sizing and to place between 20% to 25% of my account size into a trade, so there is a cap on the relationship between entry price and stop that I am willing to take or I’ll pass. 

    • Eradke says:

      There are three prices that you get from strategy; risk, profit potential, and entry price.  Entry price(s) changes based on current market conditions and how it has been reacting lately to your prices.  I define a professional trader as anyone whose main source of income comes from trading or full time trading.  Did not mean anything derogatory just needed the headline to pop. 

      Consistency doing the same thing can be dangerous in trading.  Doing the same thing despite different conditions can lead to unnecessary risks.  We trade according to risk price.  What is consistent is how much we risk per trade.     

  3. […] want to preface that my post, 3 differences between a professional trader and a home gamer, is nothing against retail traders, first I am never going to intentionally insult a client and […]

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