The profits you can gain from financial markets are so tempting that it makes everyone worldwide think about being a trader. For instance, the forex market is a competitive market that attracts several people worldwide, but not all of them have the proficiency to survive in such a market. Note that more demands mean more effort is required. On the other hand, most financial markets are full of tricks that a tactless trader could not survive at all. That’s why only a professional trader could stay in a financial market like the forex market.
However, proficiency is not the thing that somebody could be born with it. Proficiency is something which you can gain basically through expanding your knowledge and experiences. There are also several tips that by following them it is impossible to be still an amateur. You can have access to these critical tips only by reading this article. Remember that success in financial markets comes from hard work and efforts to strengthen your trading skills, which come from knowledge. Remember that if trading were easy, everyone would do it, but it is not impossible to be a professional trader.
Obstacles to Overcome for Being a Professional Trader
The good news is that financial markets are profitable, and the bad news is that it is not easy at all. Indeed, you’ve heard the expression which says “No Pain, No Gain”; therefore, you are going to face obstacles in your trading journey for sure. But it is worth it to fight industriously to overcome all the trading hardships. Let’s look at trading in financial markets as a quest for freedom. In other words, being a trader means being free from any employers and become the master of your own. But still, no freedom has been achieved without pain.
In this sense, there are certain hardships that you must be brave and patient enough to overcome. Note that every exciting thing in the world comes from resistance at a time of toughness. Here are three ways to overcome the pain in the trading markets. Go through them and study each of them carefully and if you think they are not your type, turn your back to financial markets; because, in this sense, there is nothing at the end of this road except losses.
- Discipline – is a highly qualified trader in the financial markets cannot happen without penalty. Every trader will face ups and downs in their transactions; however, the only successful one that does not consider trading as gambling or something without planning and ethics. So, you can pass the obstacles by having incredible discipline.
- Study and strategy development – let’s explain this one with a simple example. All people who go to universities know that they are enduring the hardships of studying to achieve a decent income after graduating from university. So, it is true about financial trading. To become a professional trader, you must spend time for study and strategy development.
- Capital – one of the obstacles to overcome is the challenge of deciding the amount of money for starting your transaction in financial markets. All the professional; traders know that the amount of capital is heavily dependent on the place in the world that you are trading. So, they calculate to put the capital based on the worth of the currencies on their site in the world.
Developing Smart Trading Habits
Being a professional trader yearns for developing some trading habits which is intellectually different from the typical traders. If you want to achieve proficiency in financial markets, do all you can to be a trader with smart trading habits. In this regard, you can fasten the transaction process and achieve more profit by using creative strategy. In the following paragraphs, some of these habits, which are belonged to several tactful traders, are given to give you a hint to develop your own.
Acceptance of failure as a Professional Trader
Smart traders know that they will not be winners in all their trades; because they know that losses are integral parts of trading. So, you must know that like a mountain filled with ups and downs, you need to accept the downfalls and failures for reaching the peak of success.
In other words, do not be afraid of failures; because they are the exact thing that shows you the ways of success in the trading maze. Always do your best and consider the risks but remember that you don’t always have to win transactions. Because trading is not gambling, trading means finding some powerful strategies for success and stick to them with the acceptance of the possibility for losses. So that, you are going to make money and guarantee your profits for a long time.
Avoid Predicting Financial Markets as a Professional Trader
Genius traders are not the type of people who expect themselves to predict the future of financial markets perfectly. They tend to be a logician rather than some fantasy creature like magician, wizard or sniper. They look at the facts and statistics in their analysis to consider the possible chance of success or failure, but they do not forecast the whole financial market.
Embracing Profitable Risks
Those traders who are known for being professional are happy with some types of risks. They embrace the small risks happily for the sake of significant potential gains. That is because they know that a deal is always a deal. In other words, they are entirely aware of the fact of giving and taking. Therefore, they build a habit of accepting some type of risk to achieve better success. In this sense, if you want to be a professional trader, be clever and make a victory out of losing possibilities.
Taking the Positions when Probability is on Your Side
All the intellectual traders are taking risks only if the probability is on their side. In this sense, you must accept the positions or invest your capital only on the transactions you are sure are more on your side but not the other trader.
If you want to be an intelligent trader, you must accept that for trading; you need an edge; because trading is not something like gambling. Against gambling, trading in financial markets needs strategy and following rules. The chance is something ridiculous in trading. So, you must find a realistic plan for your trading and stick to it. Note that a good strategy brings more profits rather than losses. Again you need to turn your back to the financial markets if you do not believe in the importance of approach.
The importance of an Edge in Financial Trading
A professional trader is entirely aware of the importance of an edge in financial trading like foreign exchange transactions. Therefore, you need the advantage to be a professional trader. This is the only way that you can gain profits more than losses; because, as mentioned before, you know that steady profits come from logically small risk to gaining big profit over time rather than gaining a huge one all at once, which could end to a massive disaster of failure. Therefore constantly profits come from sticking to an edge and developing a solid strategy.
Thus, it would be best to stick to a single strategy that guarantees your success for being a trader with noticeable proficiency. Some traders jump from one strategy to another, and they don’t know that they are in the trap of cycle of doom. Maybe at the beginning, they gain great profit, but over time they won’t earn money and lose more than usual.
So, stick to a single strategy with its all downfalls and strengths. Do not be afraid of the downfall streaks in your strategy because all strategies bring losses from time to time. The point is that you must find a Strategy that is more on your side.
Avoid the Amateur Traders’ Mistakes
According to many studies, which have been done with financial experts, there are some common mistakes that new traders are making them. For being a qualified trader, you must walk in the path which is the opposite one that the amateur traders are passing through it. Here are some mistakes that have been made several times, so there is a possibility that you make them too. Read them carefully and do your best to avoid them:
Some traders think it is a good idea to focus too much on entries and exits. Thinking constantly about the time of entries and exits is not going to be profitable. Try to find decent entries and, as mentioned before, accept that losses are going to happen, as well as get that not all of your trades will be sniper entries.
The second mistake, which is the one that you must be extremely careful about, is: moving a stop loss endlessly. If you think you should carry a stop loss endlessly, you are playing a really dangerous game. Do not insist on a failure over and over. Sometimes you have to accept the loss and moving on.
Believing the show off in social media and chasing social media hype is another trading mistake. Demo ballers and those who call themselves the god of trading or showing off with their luxury cars and lifestyle mislead new traders and make them far away from the facts of financial markets. Runaway from them because real traders are modest and know that the real need is not always full of profits and success.
Stick to an Asymmetric Strategy
An Asymmetric Strategy is an objective trading strategy for achieving a profit from rising price trends and reducing the number of losses when prices decline. When you are going through this strategy, you must also focus on an asymmetric risk management strategy defined by using techniques that are objected to limit the risks of the loss. This strategy is a kind of reliable method to reduce the losses and allowing your profits to run. This aim is called an asymmetric return that focuses more on decreasing the failure to save the profits.
Risk management is another key factor for being a professional trader. One of the biggest common mistakes that the new traders are making is that they risk large amounts per trade, and the result of such an action is nothing except blowing their trading account. As mentioned earlier, professional traders are the ones who risk small for big profits.
Most of the time, beginners make such mistakes because they have a thirst for being rich quickly. However, qualified traders know that the basic rule for managing risks is getting rid of such emotional dreams.
Backtesting and Forward Testing
All professional traders are aware of the importance of backtesting and forward testing for success in financial markets. Generally, backtesting is an investment strategy to see how a trading strategy has performed during economic history. The main backtesting metrics are divided into maximum drawdowns, the possible percentage of winning, and the average amount of win and loss.
On the other hand, forward testing is checking an investment strategy to see how it performs in a live environment. The primary forward testing metric is whether the forward test matches the backtest or not. If yes, then good job; if no, go back to the trading board and look for another strategy.
The Bottom Line about Professional Trader
Being a professional trader could be a painful process that needs a lot of endeavor and patience. There is always hardship in all traders, and those who bear the burden of those obstacles and use potent strategies will be successful. In this regard, they must build smart habits and avoid some common mistakes that the other traders are making.