I just thought about how many people ask me what exactly a trader is and how to start from scratch in this. So let me share what I’ve learned.

A trader is basically someone who buys and sells financial instruments seeking profits. It can be a person like you or me, or a large institution. We operate with currencies, cryptocurrencies, stocks, bonds, derivatives, commodities... everything. What sets us apart from investors is the time horizon: we look for short-term movements, while investors think long-term. And of course, nothing to do with brokers, who are intermediaries.

Now, if you want to become a professional trader, there are key steps. First: education. You need to understand how markets work, what factors move them, how to analyze charts and economic news. It’s not optional. Second: develop your own strategy. Which assets do you focus on? What is your risk tolerance? This defines everything.

Then there’s technical and fundamental analysis. Technical analysis is based on price patterns and indicators. Fundamental analysis examines the real financial health of what you’re trading. Both are important, although some traders specialize in one.

Now, what type of trader are you? There are several styles. Day Traders close everything before the end of the day, seeking quick gains. Scalpers make many small trades during the day. Momentum Traders follow strong trends. Swing Traders hold positions for days or weeks. And technical/fundamental traders simply rely on their preferred analysis.

Regarding which assets to trade: stocks, bonds, currencies in Forex, stock indices, commodities like gold or oil, or CFDs that allow you to speculate without owning the asset. CFDs are interesting because they offer leverage and flexibility.

But here’s the critical part: risk management. This separates traders who last from those who disappear quickly. You need tools like Stop Loss (to limit losses), Take Profit (to secure gains), and Trailing Stop (which adjusts automatically). Never invest more than you’re willing to lose. End of story.

Let’s put a practical example. You’re a momentum trader watching the S&P 500 through CFDs. The Federal Reserve announces a rate hike. Usually, that pressures the indices. You see the market reacting bearish. You open a short position, set your stop loss above the current price, and your take profit below. If the index falls to your target, you profit. If it rises to your stop loss, you limit the loss. Simple but effective.

Now, the harsh reality: according to studies, only 13% of day traders achieve consistent profitability in six months. Only 1% keep winning after five years. 40% quit in the first month. This isn’t to scare you, it’s to be honest. Trading requires discipline, constant education, and emotional control.

Another thing happening is that algorithmic trading now dominates 60-75% of volume in developed markets. That means individual traders compete against machines. It’s not impossible, but it requires your own advantages: better analysis, better psychology, better timing.

My advice: start viewing trading as a secondary income, not your main source. Keep your stable job. Study seriously. Practice with demo accounts. And when you feel you’ve mastered a strategy, then risk real capital, but always small at first.

Those who achieve consistency in trading are those who understand it’s a continuous learning process. Markets change, strategies evolve, your experience grows. That’s what truly defines a serious trader.