Trader - a term that is perhaps unfamiliar to those who have been and are investing in the financial markets such as stocks, stocks, forex, gold, silver or most recently Cryptocurrency (cryptocurrencies, cryptocurrencies or digital currencies). But many new market participants do not understand the concept What is a trader? and what types of traders need to learn to become one Professional trader (Pro)? This paragraph Virtual money blog will share with you from A - Z offline.
What is a trader?
In the financial markets, Trader is an individual who trades / buys financial products such as forex pairs, stocks, indices, gold, silver, cryptocurrency, etc. on his own behalf or on behalf of other organizations / individuals. When it comes to Trader, it is about short-term speculation and seeking profit through price spreads, as opposed to the terminology. Investor (investors) are traders in a longer time frame.
Currently, many people, especially young people, choose Trader as their job. The work 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 types of traders are available?
There are many types Trader Different, but I can list some of the most common types as follows:
1. Day Trader - Trader of the day
Day Trader A trader of financial products with a tendency to buy / sell and close orders on the same day, before the market closes. Depending on the trading method, day trader can place several orders to hundreds of orders per day.
2. Floor Trader - Trader on the floor
Floor Trader is a member of a stock exchange or stock exchange and usually trades on its own account. Floor Traders are usually subject to the same rules as the Floor's Specialists, traders who represent other people. Want to be a floor trader, you must follow the process and have required qualifications.
3. High Frequency Trader - HFT Trader
These are famous words lately. HFT Trader Most of them use algorithms and trade with high speed and large volume to eat small profit and loss differences, but type many orders in a day and ultimately make a big profit. This tactic usually targets a much higher return / risk ratio than the classic strategies of buy and hold. These HFT Traders have often played an important role in creating flash crashes - rapid price crashes - in the recent market.
4. Rogue Trader - Fake Trader
Rogue Trader usually Traders hire and place orders on their behalf (according to a certain terms of work) but place orders beyond their authority. The term Rogue Trader is heavily used in the financial markets, where many Rogue Traders have once made particularly large deals without their company's consent.
There are also other types of Trader such as Stock Trader of stock people, or classifying Day Trader, Swing Trader, Position Trader…. Depending on the time to hold the order.
Whatever kind Trader Whatever it is, remember, our goal is to manage risk closely and earn long-term profits in the market.
How to become a professional trader?
Become one Professional trader (PRO) and success is the desire of many traders on the financial market. To become a successful Trader, a trader needs to pay attention to the following points:
1. Have a right mindset
When starting to become one Trader, traders will face many new elements of this profession. Trading on financial markets has never been so easy. Some statistics show that the number of Trader failures in the financial market ranges from 85-95%, which means the success rate is quite small.
Some of the right mindsets in becoming a Trader are:
- Trading on financial markets is not a way to get rich quick
- There is no method to guarantee a 100% success when investing in financial markets.
- To trade successfully, Trader must have a strict trading plan, specific, and especially must strictly follow trading plans.
- Be patient because the success of a Trader will come in the long run
2. Have an effective trading system
Any one Trader When trading on financial markets, there must be an effective trading system, proven over time. This trading system must help Trader identify some important elements of a trading plan, including
- How to determine a market trend to determine the current market situation (uptrend, downtrend or sideways trend)
- How to determine specific entry points to the market
- How to determine the specific stop loss of orders
- How to determine the final take profit position of an order.
Having a trading system helps Trader limit the impact of emotions on trading, ensuring the objectivity of investing.
3. There is a strict capital management rule
Investing in financial markets requires investment capital. Strict investment protection and management is a prerequisite for the success of Trader. In its capital management rules, Trader needs to identify a number of points
- Volume of orders for each order traded on the market
- Acceptable risk level of each transaction (consultants should only be from 1-3%)
- Risk level accepted for each trading day, each trading week, each trading month, ..
Above is the article "What is a trader? What are the types of traders and how to become a professional trader?"Hope to bring you the most useful knowledge. Trader is not a simple job. To become a professional trader and make money in the financial markets, especially cryptocurrencies, you need time and perseverance to learn more knowledge as well as practice, even spend. money. Good luck.
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