4 Statements a Professional Trader Would Never Make
  1. “My strategy never fails”: Hubris within trading can cause even the giants in the market to topple. There is a fine line between confidence with your trading execution and naivety. A professional trader knows he must constantly review and develop his strategy in order for it to maintain its legitimacy.

Trading-strategy

  1. Making a loss is unacceptable”: Moving on from the first irrational statement, this remains just as untrue for professional traders. If no strategy is full proof, then losses are an unpreventable aspect of trading. The key is to understand that risk management is equally as important as taking profits from the market. A trader’s strategy must be able to predict losses and manage them in order to achieve consistent growth. Stop losses, trailing stops as well as judging market corrections calls are all necessary components when dealing with a trading loss.
  1. I must trade everyday”: Profitable trades are not forced. A successful trade is one that meets the requirements of your strategy. Therefore insisting on trading every day and setting a minimum volume of trades as part of your strategy could lead you into entering positions that are prone to higher levels of risk.

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  1. I only invest in well established companies”: Investing in stocks of corporations with a rich history of providing great returns to shareholders is a risk adverse strategy and can provide consistent returns in both dividend and increase in share price. However, as an investor you should always be on the lookout for undervalued stocks that are due to increase their market share, especially those new up and coming startups we all hear so much about.

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Diego Victorino

 

Diego Victorino
Business Development Manager
dvictorino@tvmarkets.com