By: Jay Norris, Senior Market Strategist and Forex Educator
1) Mind Set
The first big difference between professional traders and those that aspire to be pros’ is mind-set. The pro knows that over a particular period of time he is going to generally make X amount of money. He has a positive mind set, and understands that his risk to not making his money comes, not from having losses, but from not taking trades.
2) Stops
The professional views stops completely different than non-profitable traders. The pro’s attitude is “why even trade if you think you are going to get away with risking 20 or 30 pips”. The pro will use what are called “catastrophic stops”, and rarely gets stopped out via those stops because market conditions will shift and give the trader a heads up to take the position off, or reverse it long before that catastophic stop gets hit.
3) Experience
The trader knows what kind of market he is in at all times because he has experienced it before. He knows what the current trends are because that is all that matters — being in the now. He shows up every day with his lunch bucket in hand. His positions shift with the market and he gives himeself enough room to be an hour, or even a day early. And he is never late.
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DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from B.I.G. Forex, LLC and Brewer Investment Group, LLC or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as “spread” or “straddle” trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.
