The Story of Amateur and Professional Trader

The stock market is one place where making money is not as easy as it seems. To make money in the market you have to be an active trader. The lifestyle of a trader is very different from that of the investor. He has to continuously monitor the price movements and take positions accordingly. One wrong move of the trader can erode his capital. In this article, we shall have a look at how a professional trader is different from an amateur trader.

Difference between Amateur and Professional Trader:

# Emotions

Emotions play a significant role for a trader. A trader must know how to control his emotions during volatility. Decisions taken out emotions result in a bad trade. A professional trader very well knows how to keep things calms and not panic during volatility. However, an amateur trader panics during volatility and takes bad decisions. Therefore, an amateur trader does not have control over emotions and makes losses due to wrong decisions.

# Managing Stress

Trading in the stock market is not everyone’s cup of tea. It involves a lot of stress. A professional trader handles stressful times with ease and does not let the stress to lead to bad decisions. While an amateur trader may find it difficult to cope with the stress levels of trading and close his positions in the loss. Therefore, the first and foremost requirement to be a successful trader is being able to manage stress. Often stress hampers the personal life of amateur traders.

# Profitable Trades

A professional trader takes any position in the stock or commodity after conducting various studies. He might look at the charts, option chain data, etc. before taking any position. Due to such analysis, the chances of a professional trader making good profits are very high. While on the other hand, an amateur trader takes positions on the basis of his instincts. It does not involve any study. This makes the trade taken by the amateur trader very risky and chances of him making losses are very high.

# Distractions and Focus

A professional trader is 100% focused into trading during the market hours and does not do anything else except reading stock charts. He keeps a track of news on various stocks and watches the news on TV continuously. While on the other hand, an amateur trader does multiple things while trading. He is online on Facebook, Whatsapp, plays games on mobile and so on. The amateur trader loses his focus easily leading to bad trades. Such habits of amateur traders lead to multiple mistakes. Therefore, only a professional trader makes profits because of his 100% commitment towards trading.

# Wasting Screen Time

The professional traders come to trading with a plan. They know what to trade and when to trade. They wait patiently for the right trade to come to them. The professional trader does not waste time in front of the screen looking for a trade. When there is nothing to trade, he reviews old trades and makes future strategies. On the other hand, amateur trader looks at the charts for long and waste his time hunting for trade. An amateur trader believes in the myth that by wasting time by just seeing the screen will give him experience and make him a better trader.

# Overconfidence

A professional trader understands trade very well. He knows he is not successful suddenly and he cannot predict what will happen next. The professional trader knows that profitable trades are normal and will happen again. He will stick to his plans and never invest too much in one trade that can wipe out a major part of his capital. But on the other hand, an amateur trader starts believing himself to be a professional and great trader when his trades are profitable. This is where the problem arises. The amateur trader becomes overconfident and starts taking big risks. He breaks the money management and trading rules leading to wipe out of his whole capital.

# Loss of Confidence after Bad Trade

For a professional trader, a streak of good trade and bad trade does not affect his confidence. He understands that winning and losing is part of the trade. The professional trader knows that with his strategies he will surely make money in the long run. He follows his money management and trading rules confidently. On the other hand, the amateur trader loses his confidence when his trades go wrong. He changes his strategy when he faces continuous losing streak and ends up wiping his whole capital.

About Us

Nifty Trading Academy helps in making amateur traders into professional traders. We are the leading stock market education providers in the market. Our professionals and experts help you to understand the technical charts of the stocks and trade accordingly. With our classes, you can gain knowledge about chart reading and taking intraday trade. You can become a successful professional trader by learning with us. You can reach us via email or call if you have any query. We would be glad to serve you.

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Prashant Raut is a successful professional stock market trader. He is an expert in understanding and analysing technical charts. With his 8 years of experience and expertise, he delivers webinars on stock market concepts. He also bags the ‘Golden Book of World Record’ for having the highest number of people attending his webinar on share trading.