It is pretty tough to believe that being an amateur has distinct advantages. But, we all know, the pro traders own a lot of money, have access to research and information, industry contacts, and better technology. But the fact is that the average amateurs do better than the pros all the time. Let’s find out why you have the upper hand in trading profession being an amateur trader.
The Pros Even Make Mistake
The pros even lose money, and when they measure the yearly performance, they are on the profitable side since they trade with a high risk to reward ratio. On the contrary, the rookies trade with a low risk to reward ratio and thus they fail to make money at the end of the year.
The Pros Are Conservative
Professional traders never listen to market rumors. Because if the traders do so, they will not last long in the game. Most traders focus on the long-term trend and use the indicators to judge the best time.
The professional traders are good at managing the risk factors. However, professional traders face real pressure at the end of the year because their funds and banks must be profitable to collect their bonuses. This drives force for the experienced trader, and the amateur can ignore it.
Within a certain period, the professionals have to make money, and this is the first pressure. The second is distinguishing individuals from the traders. You might think that the distinction may do through the profit, but the reality is a little bit complex. Read more about the conservative trading approach at Saxo and try to enhance your trading knowledge. Once you develop your skills, you should be able to manage the trades in a much-structured way.
Most Pros Hedge
The pros are often required to hedge because it can limit the risk, especially when there are colossal OPM (Other People’s Money) sums; the upside also faces a limit because of it. That is why hedge fund managers celebrate with champagne when they produce 30 percent in a year. But, compared too much short time, some amateurs make the same result regularly. Moreover, amateurs enjoy greater flexibility in their accomplishment while many professionals face constraints in institutions and the market.
The Pros Needs to Satisfy their Bosses
Even if the pros enjoy some special facilities, but they have to answer to their bosses. Moreover, large position trading is impossible without informing the world. The only time the bosses help the trader is when people do not support their position or view.
Managing other people funds
You do not need to trade or manage the money every day on behalf of clients, or you do not need to shuffle every day in a corporate office. Though in a highly regulated US-based environment, it is a bit challenging. Before you start managing other people’s funds, make sure you have adequate knowledge about the market. Unless you have strong trading skills, you should not trade the market with discipline.
Forex brokers offer traders MAMM and PAMM accounts which helps the trader act on behalf of the clients. Essentially, the traders can promote their skills and collect funds from the investors to the public. However, the fact will be favored in several emerging markets when the incredible performance of amateur trading stars attracted investors.
The nonprofessional dealers are independent, and they don’t affiliate with any institution or bank. Therefore, several accounts quick scan on brokers websites implies that amateur compared to the famous traders are doing better consistently. Moreover, the nonprofessionals account size is smaller compared to the professionals. This advantage the amateur enjoys from the issue.
Some traders gain a solid reputation and face challenges in attracting capital to maintain their independence. Miniature account trading is much faster and more straightforward compared to large accounts. In some sense, the stealthy one is the amateur trader.
Without telegraphing intentions, they can trade efficiently, while the professionals sometimes have to follow the telegraphing intentions. Thus, the amateur follows the fundamental most, and the apprentice have greater relevance to the financial news. Moreover, the professionals make the moves, and the nonprofessionals take advantage of them.