How To Trade Like A Professional?

Published by Sharekhan Education | April 20, 2023

By Sarvesh Patwardhan | Sharekhan Education

A professional trader is a person who works in finance and is engaged in trading and investing as a business or in a full-time role, rather than occasionally or as a hobby. If you wish to trade like a professional trader, then you need to understand the evolution of a professional trader which differentiates him from others.

Treat Trading as a Business:

The first step to being a successful trader is having a business plan in place. And for every business plan to take off, you need capital, technology, and a process of execution. Moreover, you need to understand that operating costs and losses are an inherent part of the trading business; hence, you need to manage them with efficiency to generate a better Return on Equity (ROE) at the end of the year.
Prepare a Trading Plan: Before entering any business, you need to evaluate whether the investment, time, and effort are worth the risk that you are going to take. To trade in the market, you are required to have a set of rules to tackle multiple aspects related to it.

Think of the exit before the entry:

As professional traders, we need to think of how we would exit the position before even entering it; this is one of the distinctions that novices do not follow on the other hand; novice traders, think of exiting after entering a position. A trading plan should include important criteria such as the risk involved in every trade, and the management of the trade after the entry. Post-closure analysis is also very important to keep striving as a professional trader.

Appropriate usage of Technology:

As a professional trader, one needs to make sure to keep updated with the changing technology every day. A professional trader nowadays can either design an algorithm to trade the setups or be on the other side of the algorithm; hence, the trader needs to prepare himself against new-age techniques like robotic trading and artificial intelligence. The professional trader should also know how to use the technology, as he needs to draft a plan to decide his next move in the market.

Knowledge base:

How to trade the market is a choice that one must make. No one can impose a defined formula that can make anyone successful. Everybody has their own unique personality, and they can be successful by trading a system that fits them. One can learn about these from any educational resource, but what will lead to success is a time-tested model that fits your personality.

Consistency:

One must follow all the risk management rules and ensure the setups he/she is using, e.g using the Hedgehog concept to trade the markets will eventually prove whether he can sustain himself in the capital markets. It means the trader must stick to his plan and continue with the same pre-decided setup to trade the market efficiently.

This was about how to trade like a professional. To learn more about trading, you may visit www.sharekhaneducation.com or attend our free Power Money Workshops.

Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing. For detailed disclaimer and registered office details visit link – Sharekhan_Education.