6 Characteristics that distinguish professional traders from novices


Regarding trading, we all have different levels of experience and knowledge. For some, the markets are a well-oiled machine that can be easily navigated with little understanding; for others, there’s still so much to learn. But no matter your level of expertise—novice or professional—specific characteristics separate these two groups.

If you’re looking to master the art of professional trading and make wise investments along the way, then read on as this article outlines six critical distinctions between professionals and amateurs to up your game.

Trading is not about luck

Despite what some might think, trading is not about luck; it’s about developing the skill and studying the markets to create successful strategies. Professional traders have many characteristics that set them apart from novice traders. They understand the risks associated with trading and plan accordingly. For example, they might use leverage to increase their potential advantages while limiting their downside risks.

Plus, they prepare extensively by researching historical market trends and learning how different economic conditions affect market movements. Professionals are also patient when making decisions; they don’t let emotion or urgency cloud their judgment; instead, they carefully analyse all available information before executing a trade.

Lastly, professionals remain disciplined when utilising a successful strategy – no matter how much insight or luck is involved, consistently following one’s strategy leads to you doing well long-term.

Professional traders are patient and disciplined

Professional traders understand the importance of patience and discipline when investing in stocks. They have a well-thought-out plan that they follow without fail, whether it be day trading stocks on a short-term basis or buying stocks for long-term investment.

Professionals also use stop-loss orders to reduce risks; these are predetermined points at which stocks are sold if prices dip too low. This strategy allows them to take calculated risks, knowing their losses will be minimal.

Finally, professionals have an emotional detachment from their investments – they know not to get attached to individual stocks and make decisions based purely on market trends rather than feelings.

They have a well-developed trading plan

Successful traders must have a well-developed business plan outlining their strategies and objectives. Professional traders take the time to consider factors such as market conditions, portfolio diversification, risk tolerance, and the amount of capital they are willing to invest to meet their goals.

This plan serves as a guide for their trades so that they don’t get caught up in emotion or make risky decisions; instead, they can focus on executing sound decisions based on thorough research and analysis. Additionally, professional traders document every trade to evaluate and improve their strategies over time, no matter how small or insignificant it may seem.

They’re able to take losses in stride

As much as professional traders understand the importance of making wise investments, they also understand that losses are inevitable and part of any trading strategy.

Rather than letting them discourage or hinder their progress, they use them as learning experiences to help inform their future decisions. Professional traders don’t take losses personally; instead, they accept them as part of the business and move on to the next opportunity with a clear head. By taking losses in stride, professional traders can focus on the bigger picture and use their losses to help them become better, more informed investors.

They’re constantly learning and evolving as traders

Professional traders continually strive to learn more about the markets and evolve as a trader. They read books and articles, attend seminars, and follow industry news to stay ahead of the curve.

They also use analytics tools such as charting software to analyse market trends and develop strategies for success. Professional traders are constantly staying up to date on the latest developments in their field so that they can continue to be informed, investors. Additionally, they use their knowledge and experience to inform their decisions, which helps them stay one step ahead of the competition.

They understand the importance of diversification

Diversification is an essential aspect of any successful trading plan. To spread risk, professional traders recognise the importance of diversifying their investments across various asset classes and markets.

This way, they can protect themselves from losses from investing in a single security or market sector. By diversifying their portfolio, professional traders can reduce overall risk and maximise their potential returns.

Professional traders also understand that diversification requires understanding different asset classes, such as stocks, bonds, commodities, currencies, and derivatives. They use this knowledge to inform their decisions when making trades to ensure they make wise investments.


The six characteristics above separate professional traders from amateurs – having a good understanding of these will help you gain an edge over your competition and increase your potential for success when trading stocks. Remember, it takes time and experience to become an experienced trader – but with dedication and hard work, you can do well in your trades and choose to make a living out of trading stocks.


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