A trader is a market participant who opens and closes transactions to buy and sell assets for profit. The process of becoming a trader today can be divided into three stages:
- A “student” – who has not yet lost his deposit but is investing in his education.
- An “experienced trader” – who neither loses nor wins money.
- The “professional” – who trades with some kind of profit.
Of course, if you are reading this article, it means you are wondering how you can get into the third category and join the “pros”. In this article we are going to talk about those they are trying to replicate and those they are trying to imitate.
Historically, an important part of a trader’s job is to try to understand what has happened, is happening, and will happen in the future with the price of an asset. After all, it is on this difference that market participants try to make their profit. Everyone has their own methods and tools to do this – not only objective but also fantastic. But if the past and the current price can be dealt with somehow, then the chances of dealing with the future price are close to zero.
It is also worth correcting that it is not enough for a trader to simply “predict” what will happen to the price. Thousands of such predictions are made every day by various “analysts” in the market, often changing their opinion more than once to the opposite.
Just for an experiment, google: “How much will bitcoin be worth?”
According to the general concept of trading in the market, the trader must regularly determine the future price. They must also determine the exact time and price level at which the expected changes will occur. However, traders firmly believed that this can be done with any asset at any time.
From the above, it is possible to create a portrait of a trader that most people have in mind and strive to achieve.
What is he?
Do you recognize yourself in this vision of the "perfect trader"?
During our time in the market, we have come to the conclusion that this misperception was formed in narrow, non-professional circles and then spread to the masses and became firmly entrenched in people’s minds. And to change it, we need to change our approach to market analysis.
The first thing to understand is that price is not primary, it is driven by supply and demand. Once you understand this, you will know that you need to learn how to determine supply and demand in the present, not price in the future.
Price is the direct result of changes in supply and demand, not the cause. Even if the price falls sharply but demand never appears, it will not rise. No matter what the charts, indicators, figures, and other mechanics that do not take demand into account show.
If you want to trade if not perfectly, but at least profitably, you have to ask yourself the question: how do you determine supply and demand in the present and in the future? Nobody knows the future. Unless…
We don’t know what’s going to happen to us tomorrow (even though it’s our lives), let alone what’s going to happen to the price of an asset we don’t even own. So, the most logical and correct way is to learn how to determine supply and demand in the present. And then to learn how to find those assets where there is a large preponderance of one of the parties.
Resonance tools help to determine such situations.
In our opinion, the successful trader to aspire to is different from the conventional one. But we are confident that it is the exemplary one.
Share this article with your friends and other communities so that as many people as possible can think about an alternative approach to the market. Maybe it will help someone to stop losing in the market and make their trading more profitable.
The key to the success of a trader is not only unquestioning adherence to the rules of trading but also using some special techniques of successful traders that will help you manage your emotions, follow discipline in trading and avoid unexpected losses.
Trading, like any other job, can be stressful and cause emotional reactions. However, in trading, emotions can have a direct impact on financial results, so managing stress and emotions in this area is especially important.
Data analysis is not so important, strategy and tactics are not so important, what is happening in the market is not so important. But the most important thing is to competently manage risks. In this article, we explain the basics of risk management, as well as give practical advice on managing your risks in trading.