Difference between Proffesional and Amateur Traders

I hope the below helps amateur traders aspiring to be proffesional like us, I have been trading for over 20 years this November, take your time and read, it will help a lot.



You might be wondering what professional traders “have” that you don’t, or what it is that they know that you don’t. In today’s lesson, I am going to explain to you that whilst professional traders are doing things differently than how you might be, they do not “have” or “know” anything that you cannot obtain or learn.

Becoming a professional trader might seem like something that is still quite far away from being a reality for you. You might think that professional traders have some “insider” information that you don’t know how to get your hands on. I can assure you that neither of these things are true; you are not as far away from making money in the markets and ultimately becoming a professional trader as you probably think you are, and there is no big “secret” to trading success that you have to travel to the ends of the Earth to discover. In fact, I am willing to bet that all you need to get on the track to trading success is probably a slight adjustment in how you think about trading and a willingness to begin changing your trading habits.

There clearly are some differences between professional and amateur traders, but what are these differences and how can you learn from them to improve your own trading?

Professionals REALLY enjoy trading…the thrill, the hunt; they’re passionate about it
Amateurs are looking to ‘change their lives’ or for some ‘key to success’…they probably do not enjoy trading as much as a professional and see it more as a “tool” to make them money.

 The professional actually loves the challenge of trading, the challenge of mastering his or her own mind and they are interested in the entire trading process, from the psychology aspects, technical chart reading, to money management. If you don’t love what you are doing, you’ll never find the necessary dedication, mindset and habits to succeed at it, and that goes for everything in life, including trading.

Now, you might think that you “love” trading and that you are really into it, but you are still losing money and you are wondering why. Simply put; there’s a difference between loving what you do and doing it correctly. For example, professional traders enjoy trading and analyzing the markets, but they are not addicted to being in the markets all the time. They are not addicted to it because they know that part of being a successful trader is having patience to wait for high-probability / obvious trade setups and not becoming “obsessed” and emotionally attached to any one position.

Pros aren’t afraid of risk but they also know how to manage and contain it.........

FACT: Most people are afraid of risk. That’s why when you talk about trading to most people they either think you are a little crazy or they have no idea what you’re talking about. It’s in our wiring as human beings to be risk averse, and this clearly works against most people when it comes to trading.

Trading is essentially a big mental ‘game’ of taking and managing risk. An amateur is ‘afraid’ of risk while a professional understands it, accepts it and manages it, and is thus not afraid of it. Professionals are not afraid of risk anymore, they probably were at one point, like all traders, but because they have long since accepted that risking their money is part of being a trader, and they know how to manage it properly, they no longer fear the risk involved with trading the markets.

A professional trader does not flinch when his or her trading strategy is telling them to enter. The risk involved is just ‘part of the game’ to them, and because they know how to mitigate it, they are not afraid of it. Conversely, an amateur trader might struggle with the simple act of entering a position; taking a view and pulling the trigger. Many amateur traders are afraid to commit to a trade in the first place, because of the risk involved.

Also, most amateur traders become more risk averse after a losing trade, just like most amateur poker players will become more risk averse after losing a game of poker. However, in reality, the probability of winning or losing in the market or in a poker game does not change simply because your last trade or poker hand was a loser (or winner). Professional traders understand this and they do not become more or less risk averse because of the outcome of their last trade. Amateurs become far too influenced by their last trade and this is why you have probably experienced what I call the “euphoria blow-out”; this is where you blow out your trading account, or nearly blow it out, after a series of winning trades. Amateur traders tend to feel “euphoric” or over-confident after hitting a few nice winners, then their perception of the risk in the market decreases, causing them to illogically increase their risk per trade and take low-probability trade setups; which as you might know is a great recipe for losing money really fast.