Every trader is talking about what are the characteristic of a professional trader are and perhaps some of them vary from trader to trader, this is an important aspect that every trader should understand because this is the key to successful trading, this opinion can be in a general level.
I am not going to talk specific strategy here because for sure every professional traders has its own strategy. What I want to discuss here is the approach that successful traders have, the kind of edge every profitable trader follow. The list can be helpful to newbies and experience traders as well that aspire to succeed in trading and become a professional trader.
Here we go!
Most professionals do not lose their time in trying to trade on small time-frames. They concentrate their attention on the analysis of a broader and longer-term market picture. The basic time on their monitors is occupied by charts from 4-hour time-frames and up. Large time-frames contain more market information, it is more accurate and practically is free of market noise.
Frequency of trading
The advantage of analyzing high timeframes is also a positive effect on the frequency of trading. The most common mistake made by traders, which prevents them earning money, is the misconception that the more often they interact with the market, the more one can earn. This is far from the case. The truth is that frequent trading often does not have a positive impact on trading results.
Precision of trading
In the world of trading, everyone knows the metaphor that a professional trader is a kind of hunter, hiding in ambush and waiting for his prey. The meaning of the statement is that the hunter-trader knows what he is waiting for and what he is looking for in the market. A professional is able to wait patiently until the market presents him with his capabilities. Such traders spend time in anticipation of "ideal" conditions for market entry.
All professional traders have their favorite market. Over time, such market is more understandable and become somewhat "clear". Besides, the time becomes known when the main movements take place in the particular market. Sticking to favorite market helps to stay more focused and clear, reduces confusion and excessive analysis. An attempt to analyze many markets leads to congestion and confusion, which usually leads to losses of capital.
The most important is the emotional control
The main difference between a professional and an amateur is the ability to work with his emotions. Anyone who has ever "been in the market" knows how important it is to be emotionally and psychologically ready for trading, how important it is to avoid emotional overstrain. In fact, the main work of the trader occurs within the trader, in the fight against himself, with his fear and greed. In this sense, a healthy lifestyle and constant mental development is a necessary condition for successful trade outcomes.
And finally how professionals analyze markets
Contrary to popular but mostly mistaken view, most professionals do not use fundamental analysis or other economic news flow. In fact, the news is already useless in the current moment and is "outdated" (if this is not news algorithmic trading). All movements occur within the framework of market expectations-this is what controls the price. Global political news and economic data are estimated in advance by the markets. Professional traders price in these events in advance, as the financial markets are working for the future. When this or that event take place, very often the price reacts contrary to the meaning of the news, sometimes even contrary to common sense. This is because the market has priced in the published news in advance and now there is nothing more to expect from this event. Thus, professionals analyze the dynamics of market prices, basic market mechanics (important market levels, overbought / oversold markets, volume distribution, "open interest") as well as short-term / medium-term upcoming market background.
Good luck in your trading!Thanks to FortFS