Many people are under the impression that trading is like gambling. Obviously, non-traders have no way of knowing how much dedication goes into a proper risk and reward assessment of stock picks. On the other hand, the traders themselves are well aware that, unlike gambling, they should never engage in a trade unless they have a clear and obvious advantage (at least, obvious to them).

It is well known that in almost all cases of gambling, the house has the upper hand. In the few cases where this is not the case, the advantage the player could have is slight at best and is generally discouraged by the casino. I have heard of some successful professional gamblers, but they treat the game like a business and have incredible discipline.

Let’s dig a little deeper and see what it is that gives a trader an edge over the “house”. Although a good trader and a good player have systems, a trader’s system is usually much more robust and puts the odds more clearly in their favor than a player’s system. Traders also have more clearly defined risk management because any experienced trader knows that a stop loss is essential to improve their trading account balance. Also, a good trader generally evaluates the worst-case and worst-case risk in a situation before deciding to trade.

In fact, good traders always make sure they understand the worst case before considering a trade. It is not the winners who destroy your account. Instead, it’s the unexpected (and often) big losses that do.

Most players seem to be much more focused on the payoff and completely ignorant of the risk of going bankrupt. A good trader is always on the lookout for the fact that it is much easier to lose money than it is to make money. He leaves nothing to chance, thus minimizing his losses.

Traders can develop an advantage through their system by having, for example, better detection techniques than most market participants. They can also develop ยูฟ่าเบท  this advantage by having carefully studied and perfected the techniques for entering and exiting trades. Of course, as mentioned above, traders pay special attention to loss management.

So are you a trader or a player? It really depends on how clearly defined you have a system and how disciplined you are in adhering to that system. So the next time you are tempted to deviate from your written trading plan, remember this: once you do that, you are no longer a trader and just another player.