Trader is a term that is unfamiliar to traders involved in investing in financial markets such as stocks, securities, forex, gold, silver, cryptocurrencies, digital currency. However, many newcomers do not understand what a Trader is and how to become a professional trader? In this article, Kienthuccoin will share details with you.
What is a Trader?
What is Trader? In the financial market, a Trader is an individual who conducts transactions (traders) to buy/sell financial products such as trading pairs on the forex market, securities, indices, gold, silver, electronic money, in my name or can also represent other organizations/individuals. When it comes to Trader, it usually means short-term speculation and seeking profits through price differences. This is in contrast to the term Investor, which trades in more extended time frames.
Currently, many people often choose Trader as their job, especially young people. The position of a Trader requires high pressure, requires a lot of knowledge and experience, but in return is the ability to get high profits and bring financial freedom.
What Trader Patterns Are There?
There are many different types of Traders, but Kienthuccoin can list some of the most common as follows:
- Day Trader
Day Trader is a trader of financial products who tends to buy/sell and close orders on the same day before the market closes. Depending on how you trade, day traders can often enter several orders to hundreds of orders per day.
- Floor Trader
What is a Floor Trader? Floor Traders are members of stock or commodity exchanges and usually trade on the floor with personal accounts. Floor Traders often have to follow the same rules of participation as floor specialists, who trade on behalf of others. To be a floor trader, you need to follow the process and have the required qualifications.
- High-Frequency Trader – HFT Trader
This is a famous term recently. HFT Trader mainly uses algorithms and trades with high speed, large trading volume to make a minimal profit and loss difference, but type many orders in 1 day. In the end, they made significant profits. This strategy typically aims for a higher risk/reward ratio than the classic buy-and-hold tactics. These HFT Traders have often played an essential role in creating flash crashes – rapid price crashes – in the recent market.
- Rogue Trader
What is Rogue Trader? Rogue Traders usually hire and place orders on behalf of their employer (under a specific term of work) but place orders beyond their authority. The word Rogue Trader is commonly used in the financial markets, where many Rogue Traders have made huge trades without the consent of their company.
There are also other types of Traders, such as Stock Trader of stock traders, or are classified as Day Trader, Swing Trader, Position Trader, etc., depending on the time of holding the order.
Whatever the image of a Trader, our goal is to manage risks closely and earn long-term profits in the market.
How to Become a Professional Trader?
To become a professional and successful Trader, as expected, traders need to keep a few points in mind as follows:
- Having the right mindset
When starting to become a Trader, traders will be faced with many new factors of this profession. Trading in the financial markets has never been an easy task. Some statistics show that the number of traders who have failed in the financial market ranges from 85-95%, a relatively small success rate.
Some of the right mindsets in becoming a Trader are:
- Trading in the financial markets is not the way to get rich quickly.
- There is no way to guarantee absolute success when investing in the financial markets.
- To trade successfully, a Trader must build a tight and specific trading plan and especially must understand and strictly adhere to the trading plan.
- Must be very patient because a Trader’s success will come in the next few days. long time
- Have an efficient trading system
When trading on financial markets, must have an effective trading system, proven over time. This trading system must help the Trader to identify several essential elements of a trading plan, including:
- How to determine the market trend so that traders can evaluate the market at the current time (trend) Uptrend, downtrend, or sideways)
- How to determine the specific entry point of the market
- How to specify the stop loss of an order
- How to specify the take profit point of order.
A trading system that helps Traders limit the impact of emotions on trading, ensuring objectivity in investment.
- There is a strict capital management rule.
Investing in the financial market always requires investment capital. Strict investment protection and management is a prerequisite for Trader success. In their capital management rules, Traders need to define a few points clearly:
- Order volume for each trade order in the market
- The acceptable risk level of each trade (advisors should only be from 1 -3%)
- Good level of risk for each trading day, each trading week, each trading month, etc.
Conclusion about Trader:
Above, the article Kienthuccoin shared about “What is a Trader? How to become a professional trader? Hope to bring readers the most useful knowledge. Trader is not a simple profession. To become a professional trader and make money from the financial markets, especially cryptocurrencies, you need time and perseverance to learn more knowledge and practice, even spend a lot of money. Good luck.
What are frequently asked questions about traders?
What is Forex Trader?
Forex traders are foreign exchange traders operating on the currency market with major currency pairs (Forex Majors), minors (Forex minors), and Exotic currency pairs.
Trader is the job where?
With Trader, the main work everyone does will be on the phone or computer, so flexibility in the workplace can be: at home, library, cafe, or the forex, stock exchange, etc. Depending on the job position of everyone, whether it is a freelance trader or a professional trader, it will decide where to work.
What is a Trader? Who are Traders?
Trader is used to referring to individuals who trade, exchange, buy and sell financial products today, such as:
- Cryptocurrencies/virtual money/crypto
- Commodities: gold and silver, crude oil, etc.
Trader is not called a profession, but now many young people prefer to choose this job because it gives high income, the job is not too stressful or difficult. In particular, this is a freelance job to do anywhere when there is no time constraint.