The odds of traders losing, in the long run, are much higher than winning. What the professional day trader does that rest of us don’t?
A general belief among novice traders is that professional day trader spends a lot of time starring on the screen. This is not true. You cannot expect to make lots of money by reading charts all the time. Markets are unpredictable, especially in the case of crypto. It can seem both bullish and bearish on the same day. Successful traders struggle to stick with the strategies, come hell, or high waters.
In this article, we will discuss five rules that a professional day trader follows.
Discipline is the elixir of life. Professional traders don’t trade on the basis of whim and fickle. They have plans for entrance and exit. Spending a good amount of time devising a true and working plan saves you a lot of frustration. Besides, clearly defined goals help you not fall into fear or greed.
In crypto trading, the markets are too volatile. Subsequently, the loss is inevitable no matter how good the strategy is. Nonetheless, professional traders have confidence in their plan which keeps their ship sailing.
Also Read: 9 Tips for Crypto Traders
2. Avoiding Bandwagon:
While following the trend is a cool strategy but professional traders avoid bandwagon. If you want to make consistent profits then you need to lose the crowd. Many new traders come in with the dreams of making millions overnight. That stroke of luck does happen for a few but it is uncommon and not dependable. You should make your own path and stay on it regardless of where the crowd goes.
Another reason for not following the crowd is that often times crowd is misled by the opinion leaders. They have ulterior motives for causing a market movement that might help them. Therefore, you should completely ignore advice that comes from fishy resources.
3. Analyzing Competitor’s Moves:
A professional trader knows that winning is not easy. There are people equally smart and intelligent working their way towards grabbing the holy grail. So, in order to become a better trader, you need to do better than everyone else. Keep an eye on your competitor’s strategies. Check the resources they are using and tweak your plan accordingly.
In crypto trading, automated trading software or bot users have an edge over others. Automated software identifies a trading opportunity much faster than a manual trader. Therefore, a good bot can give you an extra push in the game.
4. Professional Traders Invest Less:
This is the rule followed by all successful traders. You can treat trading with rationality only when you don’t have your life at stake. Don’t overinvest or put in the money that you cannot afford to lose. We often repeat this tip on our blog for newbie traders. Investing your insurance money in trade will make your heart sink on every unfortunate swing. The crypto market is especially notorious for unpredictable turns. Therefore, minimize the risks by investing less.
Traders can also put stop-loss and do other sorts of measures to protect what they earn. This gives the courage to stay in the trading business.
5. Stay Focused:
A professional day trader stays focused. The main goal is to earn profit over a longer period of time. As previously mentioned, some people get lucky but professionals have to make their own luck. Keep the bigger picture in your head. This way you will not fall for small profits or short-term benefits. Winning and losing is part of the trading business. If you want to earn consistent income then become a student of the market. Learn along the way and you will never have the short end of the stick.
The goals must be achievable and realistic. Break them down into small milestones and move step by step. Hoping to make millions in a week is an unreasonable goal.
The rules for trading business are quite simple. Behave like a well-rounded man in the market and success will be yours. However, following these rules is not easy. When your hard-earned cash is involved and markets are volatile then any man can lose his cool. That’s why 80% of the traders end up leaving the business. Nonetheless, a professional day trader has the ability to keep moving with the perspective of the bigger picture. Therefore, he/she ends up successful in the end.