The Difference Between Professional Traders and Amateur Traders
1. Heavy Positions: With small capital, the only way to quickly double your money is through heavy positions. Some amateur traders have been trading for over a decade without ever doubling their capital; this indicates a problem with their trading system. Market trends are linear, and there are only brief periods where significant price movements occur; the rest of the time, the market is ranging. There is typically an opportunity for heavy positioning about once a week. If you can capitalize on it, you could potentially double your capital within a month.
2. Holding Positions: Most people are afraid to hold trades for long periods, especially winning trades. The correct approach is to hold winning trades longer than losing ones. Amateur traders often struggle to hold onto trades due to inadequate risk management, and they might even check their phones at night to monitor the market. In reality, you should establish a safety cushion for your capital; once you're in profit of over 20%, you can consider holding overnight positions, thus allowing for passive income.
3. Timeframes: Many people are reluctant to follow daily charts, even less so weekly charts, believing that it's too slow. They prefer to watch 5-minute, 3-minute, or even 1-minute charts. However, I want to emphasize that even if you are day trading, you should still pay attention to weekly and daily charts because the major players are engaged in battles on those timeframes. I determine the trend based on the weekly chart, look for direction on the daily chart, and enter and exit based on the 15-minute chart. This approach allows you to align with major capital movements. After all this, have you learned anything?
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