You all know that only 5% of people are successful in trading, known as professional traders, and 95% of people, known as amateur traders, trade only to give money to 5% of the people. But why is it that only 5% of the population is counted as professional vs amateur trader?
Anyone who enters the markets loses money at first, but what does a professional trader do that he makes consistent money in the market, whereas an amateur trader gets stuck in the financial markets?
1. Your WHY:
As Jim Rohn says, when your “WHY” is stronger, “how” becomes easier. A crucial stage in developing your trading plan is determining why you want to trade and how much time you’re ready to invest. Write down your answer to the question, “Why do you want to become a trader?” In conclusion, figure out your motivation for trading.
2. Burning Desire:
In the beginning, when you are new to trading, you have some dreams in your mind. There are some wishes or there is hope, but it is not the desire that I am talking about.
A burning desire is something that never lets you sleep, and you cannot live without the desire that you have in your mind until it becomes reality. In the book Think and Grow Rich by Napoleon Hill, there is a complete chapter about burning desire.
3. The main difference between a Professional vs Amateur Trader is Consistency.
As I mentioned above, pro traders make consistent money from markets because of their consistent action. And always remember that consistent action is equal to consistent results.
Consistent action = consistent results.
4. Trading Mindset vs. Skillset:
A mindset is your beliefs (limiting or empowering beliefs) and attitude. A growth mindset that helps you to achieve what you want to achieve.
And a skill set is your abilities and strategies that you master.
You will hear that in trading , 80% of the trading mindset and 20% strategies matter. Yes, it’s true . This simple quote differentiates professional vs amateur trader.
In the above guide, we learned the comparison between professional vs amateur trader in a simple manner.
Let’s combine all 4 steps:
2. Burning desire
There is a loop/connection in between the above steps.
To begin with, you must have a clear “WHY” in trading. That motivates you in your trading career.
Then the second step is having a burning desire, and this can only happen when you have your strong WHY.
The next step is consistency, which means sticking with any setup or system until it becomes second nature. And you can be consistent in trading only when you have a burning desire to be a pro trader.
The fourth step is trading mindset. This combines all three steps into one picture. So, you have to work on your trading mindset before you put real money into the markets.
I hope you’ve enjoyed this information as much as I loved writing it for you. If you have some doubts or queries, ask in the comment section.