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The 3 Differences Between Professional Trading and Gambling

Copyright (c) 2013 TRADE IN - TRADE OUT

In this article, we will distinguish the main characteristics between the activity of a Professional Trader and a Gambler.

1. The Professional Trader knows his plan will work out if he sticks to the rules; The Gambler just has no clue that a proper risk management and an adequate methodology could embrace the results he aims for;

2. The Professional Trader knows that it is just a matter of time untill he reaches his financial freedom; The Gambler thinks the next trade is a winning lottery ticket;

3. The Professional Trader trades according to the time and lifestyle he desires; The Gambler is a Market's slave and spends all his time looking at charts.

In short, the gambler is someone who opens a very small account, risks it all, funds another account, and busts it again. This means, he / she is the one that lives on the excitement the Market will give you whenever a Trade is triggered.

He's also the one who won't accept he's making the same mistakes every single time while he's waiting for that one trade that will compensate all the pain and suffering from the previously taken trades.

He's also someone who does not realize that, even if he gets that one trade, due to his lack of Risk Management, the Market will claim it all back. He will continue to Trade exactly the same way and the losing streak will go on and on until either the funding money comes to an end, or he simply gives up.

Now, Trading shouldn't become a way to get excited - it's supposed to be boring.

Let us now take a closer look at the Professional Trader's beliefs:

- Trading is just a way to make money - it's my 'job'; - Every Trade is done according to my rules and is just another Trade; - The most important thing is that this Trade is in agreement with my Strategies; - I'm sticking to the Plan while I'm taking this Trade; - I record all my Trades on my Trading Journal so I keep a close track and I can improve my strategies constantly; - Every Trade implies the same predefined Risk, as I feel confortable with it and it is according to my Plan; - I only place orders when the charts present the opportunities identified in my strategies.

If you ask any Professional Trader that makes money on a regular consistent basis, he will tell you that there is no emotion involved. He knows exactly that what has to be done is following the daily routine and applying his strategies with military discipline. All the excitement is postponed to the end of the year when he enjoys the well deserved vacations at the beach, or when he buys that supercar he always wanted, or when he can finally help his relatives or sponsor his favourite social cause.

In conclusion, the main difference between a Professional Trader and a Gambler is only a matter of disciplined attitude based on a backtested methodology that is put into practice everyday by creating a smart routine...

Happy Trading.

About Author Jorge Moutinho :

Learn more about the Trading Tools that Professional Traders use while entering the Forex Market. Visit our website at <a href="" target="_blank"></a> and enjoy a copy of our FREE PDF Course on how to read the charts and understand the Forex Market price action.

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Article Added on Friday, June 20, 2014
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