bilbao wrote: ↑
Sun Mar 10, 2019 5:49 am
Difference between trader and analyst is huge, it is like riding a bicycle and driving a car, although it is necessary for a trader to b good analyst, but alone analytical skills doesn’t define his success in trading. Let’s talk about analysts first, well there are two types of analysts in the financial market, one is a technical analyst and other is a fundamental analyst.
Technical analyst’s whole study is based upon pseudo-science, they use this methodology for predicting the direction of prices through the study of past market data with the help of charts so that’s why technical analysts also called as the chartist.
Fundamental analysts do a wider research that is made up of the study of underlying forces and changes that can affect the current situation or productivity of an economy, a country, an industry or a single company.
So who is a trader?
A trader is who speculate on prices with the help of technical and fundamental basis and also gathering information by analyzing economic and political information which can affect the price of a particular asset and also by keeping in mind crowd’s behavior. He/she trades on his study by analyzing his/her potential reward, uses a perfect money management system and keep check on his/her emotions during trade period and generate a maximum reward from a particular opportunity.
So what is the difference between a Trader and an Analyst?
An analyst can give analysis at any given point of time on whereas a trader has to plan his trade, the right time to enter and exit considering the given
Analysts are mostly diplomatic when it comes to giving opinions, they generally use such words (if, but, then, possible, in case), where as trader is aware of the fact, if he doesn’t get it right, he has to pay the price.
Analysts are mostly rational in their approach, whereas trader becomes irrational in their approach with a particular trade. Irrationality generally makes the suffer in trading.
An analyst can pick up any stock or any other asset class and give his views but a trader has to choose best suitable stock or asset class.
Ana analyst can have easy and relax life but limited as well, but trader has to go through lots of suffering but he can lead to mind-boggling and limitless life...
So the conclusion is
A trader can be an analyst but an analyst cannot be a trader.
May I, as an entrepreneur who treats speculation in financial trading as my business, share my experience on conducting this business. It is no different from any product business.
FX market offers me various products and products I have chosen for my business are: spot, futures, OTC options and Futures Options. Knock-outs and Knock-ins and various types of exotic options are also there. I don't deal with them.
As a one person owner-cum-operations person, I provide
2. conduct self-directed trading transactions
3. understand nuances/concepts of the business like, margin, leverage, risk reward, pyramiding, averaging, risk control and money management.
4. Have a thorough knowledge of all the processes involved in conducting online transactions, analysis of markets and keeping records (like myfxbook)
5. Keep improving my knowledge about all these concepts through the study of how the Indicators and EAs are coded and used. Luckily, Forex-station and a few more forums provide free indicators and EAs.
5. Understanding Big picture is critical for me if I have to take my own trading decisions. So I have sourced a few websites and digital tools which can provide me on demand in a couple of minutes the information I need.
These chores occupy my time and mind . But I want to remain sane and be in a positions to take right decisions. So why should I clutter my mind by performing additional mind-taxing work?
In short, I want to remain the driver of my business and be in a position to take timely decisions. In a business fraught with uncertainty, I have to keep my mind free to make a few judgements as to trade or not. In a game of probabilities and uncertainty, you can't be always right or wrong. This is the major hazard of speculative business and there is nothing you can do about it.
For me analysis work is very important. Both Fundamental and Technical Analysis are essential if I have to succeed in my business. These are specialised fields
As a driver, I consider them as engineers and I don't want to be a driver-cum-engineer.
Since I am the operations man, I do need to have some kind of quality checking system in place to source analysts. I have established a criteria to employ paid or free services provided by the analysts like: how many years they have been doing this work, what motivates them to provide free services, and whether they have any performance history,
Luckily, brokers provide me free quality checking lab by way of free paper trading account and backtesting tools I do only forward-testing of their recommendations for a minimum of 6 months before deciding whether to use them or not. Again, keeping in mind, it's quite touch business and if they are right 60% to 70% of the time I go with them.
Signal copy service is of no use to me because they don't provide rationale for the trade. Just Entry, TP, SL and Breakeven information. Most of the signals again are copied from broker's free sites.
Products choice is key to my business profitability. I trade both fx and fx options. You have to explore different options to be an effective risk controller. This is the demand of my business. If I am losing in Fx , Fx options can provide me support in hedging or generating additional revenue.
I have nothing to sell, so I won't brag about how successful I am.
I would just say this: it is a very lucrative business, needs a lot of dedication, patience, capital and persistence. No different from any business, actually.