Pro vs Amateur Forex Traders
One may imagine a professional foreign exchange trader sitting in a big office with a lot of fancy equipment and making a big number of transactions every day, but the real difference between a professional and an amateur FOREX trader is that of approach. A professional trader is always focused and knows what he (or she) is doing all the time. On the other hand, an amateur trader may spend hours in front of charts and screens, but without any real motive and understanding of different elements of these charts.
Another important difference between the two is that a professional trader is always aware of his or her risk appetite. They know how much risk is appropriate. On the other hand, an amateur trader may take a too risky approach at times and end up losing a lot of money. Similarly, their approaches are usually different at the time of a big victory or a defeat. A professional FOREX trader will not be demotivated by a loss or become over confident with a single victory. Instead, a reasonable balance will always be observed in a professional trader approach.
However, it is common among amateur and inexperienced traders to take losses personally. Amateur traders become impatient in such circumstances and often end up increasing their overall losses.
According to a research, a big portion of amateur traders wrongly considers FOREX (or any other financial market) as a source of making big money in a small time. This may be true on some occasions, but it is usually not the case.
Amateur traders having such kind of thinking end up making wrong decisions and ultimately losing their money. Professional traders, on the other hand, are always patient and aware of the fact that a reasonable time is required before they can make a huge sum of money.