PranamGhagare
Education

Professional Traders Vs Amateur Traders

NSE:NIFTY   Nifty 50 Index
There is a big difference between successful traders and amateur traders. Successful traders know how to allocate capital, calculate their risks, and move on after losing money. Ultimately, it is not what the trader knows, but who he is. The consistently profitable traders can ignore or subvert their natural tendencies to do what feels comfortable, and instead, do what is necessary, to be optimally profitable over the long run. I have mentioned just a handful of differences between professionals and amateurs.

A trader’s goal should be to move from the red group (amateur trading) to green group (professional trading) as early as possible. Remember "amateurs focus on anticipating returns, professionals focus on the process and managing risk".

Comments

Hey, Good points. But not sure I fully agree with 3:1 Risk reward though. I think its not in power to choose stop loss and Target. But we can choose trades based on preferable R.
I don't encounter a trade setup which gives me 3:1 very often.
I settle for more than 1.8 - 2.0. Less than this is not worth the efforts.

Is there anything I am missing?
Reply
@kap.sni,
Hi, if your trading system is providing you with good results with 2.0 Risk to Reward than you are doing a good job, It all comes down to the underlying results in the end. What is more important is the amount of Risk that you put for each trade in monetary terms, if that risk is lower than your wins you can start seeing good results, provided that you stick to your system for a longer period of time. Personally, I am a swing trader, with my system, I get most of the trades with a higher Risk to Reward than 3:1, so my profits take care of my losses most of the time.
Reply
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