Opening so many trading screens and the software does not prove that you are an expert trader. You will be an expert when you are mentally strong to manage your trading plan day by day. Using a few techniques or understanding the basics, anybody can claim that he is a professional. But reality shows us the different pictures of professionalism. Here we will discuss the most crucial difference between a professional and an amateur. These differences will be helpful for you to mend yourself.
An amateur investor will pass his day surfing online on YouTube, Facebook, or other social media platforms. The amateur is always distracted, and for not being focused on the market, he loses trades. He starts gossiping or chatting without calculating the position of the price.
On the other hand, an expert keeps his concentration on the movement without being distracted. He focuses on his charts and maintains a website to see the upcoming news. He knows the compensations that he may face if he loses his concentration.
2. Time management
A beginner looks at the chart and spends hour after hour without making any decision. He flips the timeframes based on the myth that watching trading charts will make him better. But in reality, wasting hours after hours like this has no value. Stop making things complex and start learning to trade in the demo account. Those who are looking for a professional demo trading platform, get it from here. Use it to develop a strong trading plan so that you can deal with the complex price movements without having any major issues.
The professional always makes a better plan from the beginning, and he knows very well when to make a decision based on the trading charts. He waits for the trading to come and does not flip through the timeframes repeatedly. He knows very well that flipping the time frames will not change the situation. To utilize the time for profit, he goes and analyzes his trading journals or revisits his past trading history.
After winning a few trades, a newbie believes he will never lose. This type of tendency of overconfidence reduces his chance to win a trade later because he cannot make any wise decisions. Newbie takes a risk without any second thought, and as a result, the chance for losing trades increases. Study shows that after winning four or five trades, most beginners lose all their money in one trade.
On the other hand, an expert businessman knows well that he cannot be a super trader overnight, and he cannot be an astrologer to predict his trading fortune. He takes patience as the ultimate key to his success and consistently buys trades. He leads his business based on money management theory, like analyzing risk to reward ratio, setting stop-loss and take-profit order. Adopting these money management techniques helps him to minimize financial losses.
4. Taking lessons from mistakes
Amateur investors do not accept their mistakes easily, and they are very reluctant to learn from their mistakes. Because of their inexperience, they set up their stop loss farther and think it will delay the loss. Ultimately, they lose all their capital because of this bad practice.
The experts take lessons from their mistakes. When they find their trades on stop-loss order, they accept their mistakes and take their exit only for that trade. They believe every trade is different, and one trade cannot affect the other trades in their trading career. Experts also believe that the upcoming trade can be potential and help them earn more money.
To be a professional, one must take everything positively, and it is not required to use any expensive software to determine their success rate. To be an expert, you do not need expensive software or huge capital. Experts always suggest the beginners use their conscience rightly.