BTC
What distinguishes a trader from a gambler?
First and foremost - risk assessment and a systematic approach to each trade.
A trader must clearly define the acceptable risk before entering a trade, as well as the goal, so as not to ask oneself where to exit. Understanding technical aspects is not so important - any known strategy can yield results if one adheres to risk management per trade and the R/R ratio (Risk/Reward). Contrary to the misconception of inexperienced traders, in trading, the frequency of successful trades is not important; you can have 70% losing trades against 30% winning ones, but still make a profit due to a well-calibrated R/R. Thus, the R/R calculation should be based on a ratio of 1:2 to 1:10 and beyond, favoring the second coefficient (profit). That is, if you define the risk in a trade as 1% of the deposit, your fixation should start from 2% profit and above. Premature closing will lead to a violation of both the system and your mathematical expectation, which will not allow you to earn, even if you do not make mistakes often. For example, out of 20 successful trades, you may only have one that covers your efforts, and even being a successful analyst, you will incur a loss.
In addition, a clearly defined goal (achieved take profit) will reduce psychological pressure, as everything has gone according to plan, and then "the money is no longer yours," as the saying goes. At the same time, a position closed out of fear, having not reached either the take profit or stop loss, can throw you off track and plunge you into tilt - a series of compulsive and unsystematic trades, whereas the main trait of a good trader is the ability to wait, since the market in 70% or more of cases does not provide clear setups, thus there is no need to jump into chaos.
All the aforementioned mistakes are made not only by beginners but also by experienced traders with decades of experience. In fact, the most difficult part is working with oneself in conditions where the market tries to destabilize your nervous system. The strongest stresses in the market often arise among so-called scalpers who make dozens of trades a day, as there are many more chaotic movements on smaller timeframes. For this reason, many scalpers and intraday traders eventually switch to an investment strategy, meaning they work long-term on larger timeframes and increase their chances of preserving their deposits.
In summary, several tips can be given that will help you succumb less to emotions and avoid gambling.
