6 Things that separate the pro from the amateur trader Part 2

4. Loss of confidence after a losing streak
Amateur: When having a losing streak, the amateur trader loses confidence in his skills and his trading strategy. An amateur trader tends to change his trading strategy when he enters a losing streak or breaks his trading rules because he wants to make up for his losses.

Losing streaks are dangerous for amateur traders because they often lead to even bigger losses when traders try to make up for lost money.

Pro: For the professional trader, winning and losing streaks don’t matter. They are inevitable and will happen over and over again. A professional trader knows that over the long term, his trading strategy will make him money, no matter what. A professional trader sticks to his rules and never loses his mind.

5. Taking losses personally
Amateur: It is hard to accept that your trade idea was wrong and that you are going to lose money. Especially new and inexperienced traders can’t accept to be wrong and when they see that price is about to hit their stop loss order, they will do one of the following things:

– Setting a stop loss further away to delay the loss
– Adding to a losing position to get out of the loss faster when price turns around
– Taking off the stop loss order completely because eventually, the price will have to turn around

All these tactics will lead to large losses and to margin calls. A trader who is engaging in one of the three mentioned scenarios is as far away from becoming a professional trader as possible.

Pro: The professional trader lives by the following two principles:

– One trade is just one trade and the outcome of one single trade does not matter
– The stop loss order is the price where you fully accept that your trade idea was wrong and where you WANT to exit the market

The professional trader knows that the outcome of one trade is totally irrelevant to his trading career. Whether a single trade is a winner or a loser does not matter because there will be 400, 500 or 800 trades coming soon where he can make money. A professional trader also accepts that a stop loss is the place where his trade is wrong and that he is happy to exit the trade because it is not going to make him money.

6. Do you need money fast?
Amateur: What is your trading objective? Do you believe that trading is a way to make a lot of money in a short period of time? Research showed that traders who believe that they can get rich quick with trading lose the most amount of money.

Pro: For the professional trader, trading is a regular job. The professional trader does not trade for the excitement or because he wants to make a fortune with a few lucky trades. Trading is not an easy profession and it requires time, hard work and a lot of hustling before you can make money. In the end, being a trader is a job like many other jobs.

Conclusion: Fake it until you make it
To become a professional trader, act like one. Behaving like a professional trader does not require a lot of capital or expensive equipment. You can trade like a professional trader RIGHT now. Analyze your trading behavior and then see how you can make the adjustments to take your trading to the next level.

You should also read Part 1

Junior Trader Stefan Panteleev

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