common-mistakes

Experience Trader vs Amateur Trader

In this post, I am going to share with you the difference between an experience trader and an amateur trader. Do note that what I am writing here is purely based on my own personal opinion. 1) Number of Trades – Amateur trader have the urge to get into trades and therefore tend to crave […]

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    In this post, I am going to share with you the difference between an experience trader and an amateur trader. Do note that what I am writing here is purely based on my own personal opinion.

    1) Number of Trades – Amateur trader have the urge to get into trades and therefore tend to crave for trading everyday. In fact when I am new to trading a few years ago, I am looking to trade every single day which eventually leads me to force trading that ended up with more lose than win.

    An experience trader understand that the key to making profit from trading lies in the risk reward of their strategy and not the number of trades. Therefore an experience trader can go without a trade for days.

    2) Capital Protection vs Profit – Experience trader tends to be more concern about their capital while amateur trader tends to be more concern about their trading profit.

    Personally I have the habit of shifting my stop loss to breakeven whenever my trade accumulated certain amount of profit. By doing so, I am protecting my capital even when the market later reverses and stop me out at the breakeven point.

    As a new trader, they tend to be afraid of shifting their stop loss fearing that the market will stop them out and then move in their direction of trade. However this expose your capital to potential losses when the market eventually reversed.

    3) Discipline - An experience trader have the discipline to stick to their trading plan even if it means a few days without a trade. An amateur trader tends to enter a trade even when there are no setup according to their trading plan.

    The lack of discipline is what causes most new traders to lose their money. If you are serious about making money from forex, you must have the discipline to stick to your trading plan and never enter trade that are not accoding to it.

    I bet that some of you must have the same experience like what I have shared with you above. However if you want to become a profitable one day, you must fulfil the above 3 criteria first.

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