Link: TraderFeed – What Makes a Professional Trader
Dr. Steenbarger recently discussed five major differences between professional traders and novices based on his experience in working with professional traders.
Here are a few highlights:
- Pro traders think about the big picture – they monitor intercorrelated markets and observe relationships between them (and trade them!).
- Pro traders also think ‘small,’ in terms of returns. Do you see any professionals who achieve consistent 100% or 300% returns? They carefully control their risk and know what to expect (hint: it’s more realistic than doubling your account in a year). They set goals and the goals are reasonable.
Dr. Brett: “The best traders I know spend significant time generating trade ideas, researching markets, and staying on top of developments world wide.”
The underlying point is to approach trading professionally, like a business and take a multi-faceted approach (one that goes well beyond picking great stocks).
Check out the entire article for deeper insights.
I think you are right about prof. traders, but the returns part. If you’ve been doing this for years yes you will accept smaller gains if the trade is changing, but you are more likely to do 100-300% gains more likely because you know what you are doing and where the market is going expecially in options.