Each and every profession is reviewed by others. When I want to buy a fishing reel, I wonder which shop is better; should I ask the shop owner what a good shop is? Is it that it generates a generous income? That people feel good when they pop in? That the shop has light and bright colors? Or that the salesman provides entertainment and free leaflets?
The point is that anyone considering a profession as a regular activity, whether part or full time and for a certain duration, will need to be “good” at it.
The perspective of a customer, a patient or any type of beneficiary of a service, is generally very different from a member of the profession. And one member of a profession is allowed to have a different view on the profession – because he is a professional.
In trading & speculation, there are no customer. A trader to an extent is the customer of one or more brokers. Apart from this, he has a number of partners, but doesn’t know them at the time of trading.
The private trader is a bit alone….
A good professional
Is it possible to state that a trader is good? If good means a positive income or cash flow, then it is hard to say. First, the majority of traders have started very small. Most of them have kept going with very small returns, and in fact a large number also has lost a lot of money in the road. Making errors remains a good reliable way to improve. Secondly, having made a million today doesn’t mean to have one million or more tomorrow. The core nature of trading being around risk, there is no warranty. An investor thinks positively, takes reasonable positions on markets with an expected, if possible predictable, return. A trader operating on the same markets has a negative approach whose goal is to both protect his capital and take advantage of probabilities.
There is one thing however that remains for sure. A trader must be serious.
Any healthy business will emerge only from clear, clean, solid grounds. In this context, it means to research, to fill in the gap for any lack of knowledge, ask, question, watch markets, read (a lot), and then design a system, think of personal requirements, to ultimately design plans.
Being successful in one trade is certainly not experiencing success. It’s a short one-off positive return. Growing an account comes from repeated, systematic entries and exits which, after a certain number of trades, may result in a total profit higher than the losses.
One aspect of this is also the expected profit.
As already mentioned the primary objective is the centre of a plan is the protection of the capital. We want to risk this money repeatdly, so we’d better keep it first!
Whether a trader has done a fantastic 50% monthly return, or a shy 5%, or lost 3%, the trader might well be good or bad!
The % of profit is unpredictable.
Newspapers love “successful traders”. “Mr Beautiful is a young boy and has made 300K in the London Stock Exchange last week”. Are you sure you can publish the same tomorrow?
So what's a good professional trader?
A good professional might well be someone who:
- does not show off,
- is serious,
- thinks before acting,
- establishes a number of success assets – a good system with good tools, a good plan with a good risk management.
From the accounting perspective, this will result in a good professional who first controls his money and risk.