Trading is one of the most competitive professions in the world.
It can be intimidating as a day trader to know that you’re going up against professional traders with access to cutting-edge technology and the best analysis and information in the world.
Fortunately there are simple ways that day traders can emulate what professional traders are doing to match or even exceed the performance of professional traders.
Here are the top 5 things that professional traders are doing that most day traders aren’t. By following these simple guidelines you can eliminate the advantage that professional traders have in the market, and then outperform them in your chosen niche area.
Identifying Trading Opportunities
Professional traders don’t randomly pick something new to trade each day or place a trade because they ‘have a good feeling’ about a certain stock. Professional traders use highly sophisticated trading systems honed through years of experience to identify similar profitable trades day after day.
While for some professional traders this may mean fundamental analysis of the global currency market, for others it will mean technical analysis of small-cap stocks.
The point is that they develop and hone a consistent system for identifying potential trades in areas of the market that they are knowledgeable of and intimately familiar with.
Developing your own personal system for finding potential trades takes time and effort, but it is an essential step to trading like a professional trader.
Review Your Results
Many day traders simply accept their profits or losses after closing a trade and move on to the next one. Professional traders know that this is one of the biggest mistakes that a trader can make.
Professional traders take the time to track and record each trade in detail so that they can analyze the results of their current trading system and make appropriate adjustments when necessary.
This process would be impossible based on a simple ‘gut-check’ of how they feel past trades went. Only by carefully logging and reviewing past trades can you truly understand what you’re doing right and what you’re doing wrong.
Start recording and reviewing your trading results like a professional trader, and you will be amazed at how quickly your trading performance improves.
Utilizing the Latest Technology
Even 10 years ago professional traders had access to technology that was light years ahead of anything a day trader could use. This gap has closed dramatically with the on-going boom in retail trading and the services geared toward them.
With enough time and effort there is effectively nothing that a professional trader can do that a day trader can’t emulate from the comfort of their own home or office.
From professional news feeds and data-tracking apps to the latest in artificial intelligence and machine learning, day traders have access to everything that professional traders use to gain a competitive edge in the markets.
Make use of all available technologies to squeeze every last drop of performance out of your trading strategy to eliminate any edge that professional traders may have over you.
Become the Master of a Market
Professional traders know that the markets are too massive and complex for any one person to fully understand.
That is why professional traders focus in on one or a small number of market areas where they become absolute masters. This means learning everything there is to know about a market area and tracking it day after day until you are intimately familiar with how it works and what drives the price action there.
Becoming a master also means honing a perfect system for trade execution that minimizes exposure to risk and maximizes profits from any changes in price.
To trade like a professional trader you need to constantly be perfecting your knowledge of a certain area of the markets and honing your execution skills in that area to a razor’s edge.
Never Stop Improving
Professional traders know that the markets are constantly changing and evolving and the competition is always getting better and more fierce. That is why professional traders wake up each day and push themselves to be better than they were the day before.
Accept that you can always do better and improve your trading performance, and you will maintain that same competitive edge that allows professional traders to excel day after day consistently throughout their careers.