Trader – a term that is probably no stranger to those who have been involved in investing in financial markets such as stocks, shares, forex, gold, silver or most recently Cryptocurrency (cryptocurrency, cryptocurrency or digital currency). But many new entrants to the market do not understand the concept What is Trader? And what types of traders or what do you need to learn to become one? Professional Trader (Pro)? This paragraph Cryptocurrency Blog I will share with you from A - Z.
What is Trader?
In financial markets, Trader is an individual who makes transactions to buy/sell financial products such as currency pairs on the forex market, securities, indices, gold, silver, cryptocurrency, .. in his own name or represent another organization/individual. When it comes to Trader, it means short-term speculation and seeking profit through price differences, as opposed to the term Investor (investors) are those who trade in longer time frames.
Currently, many people, especially young people, choose Trader as their job. The job 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 There?
There are many styles Trader Different types, but I can list some of the most common types as follows:
1. Day Trader – Day Trader
Day Trader is someone who trades in 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 traders can enter several orders to hundreds of orders per day.
2. Floor Trader – Trader on the floor
Floor Trader are members of a stock or commodity exchange and usually trade on the exchange with their own account. Floor Traders often have to follow the same rules as floor specialists, who trade on behalf of others. If you want to be a floor trader, you must follow the process and have the required qualifications.
3. High Frequency Trader – HFT Trader
This is a famous word recently. HFT Trader Most use algorithms and trade with high speed and large trading volume to eat a very small profit and loss difference, but enter many orders in 1 day and finally make a big profit. This strategy typically aims for a much higher reward/risk ratio than the classic buy-and-hold tactics. These HFT Traders often play 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 behalf of their lessee (under a certain term of work) but place orders beyond their authority. The word Rogue Trader is used extensively in the financial markets, where many Rogue Traders have made exceptionally large trades without the consent of their company.
There are also other types of Traders such as Stock Trader of stock people, or classification of Day Trader, Swing Trader, Position Trader... depending on the time of holding the order.
Whether it's the type Trader Whatever it is, remember, our goal is to manage risks very closely and make long-term profits in the market.
How to become a professional Trader?
Become a Professional Trader (PRO) and success is the desire of many traders in the financial markets. To become a successful Trader, traders need to note some points as follows:
1. Have the right mindset
When starting to become a Trader, traders will face many new elements of this profession. Trading in the financial markets has never been an easy task. Some statistics show that the number of Traders who fail 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 the financial markets is not a get-rich-quick way
- There is no method that guarantees 100% success when investing in the financial markets.
- To trade successfully, Traders must have a strict, specific trading plan, and especially must strictly adhere to the trading plan.
- Be very patient because a Trader's success will come in the long run
2. Have an efficient trading system
Any one Trader When it comes to trading in the financial markets, it's important to have an efficient, time-proven trading system. This trading system should help the Trader to identify several important elements of a trading plan, including
- How to determine the market trend to determine the current state of the market (uptrend, downtrend or sideways)
- How to specifically determine the market entry point?
- How to specifically determine the stop loss of an order
- How to specifically determine the take-profit point of an order.
Having a trading system helps Traders limit the impact of emotions on trading, ensuring the objectivity of investment.
3. Have a strict capital management rule
Investing in the financial markets requires investment capital. Careful investment protection and management are prerequisites for the success of the company Trader. In his capital management rules, Traders need to clearly define some points
- Order volume per market order
- Acceptable level of risk of each trade (advisors should only be from 1-3%)
- Acceptable level of risk for each trading day, each trading week, each trading month, ..
Here is the article "What is Trader? What types of Traders are there and how to become a professional Trader?"Hopefully, it will bring readers the most useful knowledge. Trader is not a simple profession. To become a professional trader and make money from the financial market, especially cryptocurrencies, you need time and perseverance to learn more than knowledge and practice, even spend a lot of money. money. Good luck.
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