I just realized that most people who want to start trading often get confused about how traders differ from investors and where to begin. Today, I want to share my understanding of this topic.

Simply put, a trader is someone who makes money by buying low and selling high on financial assets such as gold, currencies, or stocks, then profits from the price difference. It’s not complicated at all. Imagine you go to a market and see a T-shirt priced at 100 baht, knowing you can resell it for 200 baht. You buy it to resell for a 100-baht profit. Traders do the same thing, just replacing the T-shirt with gold or US dollars, and they do it through a mobile phone or computer.

What sets traders apart from regular investors is that traders buy and sell frequently to make short-term profits, while investors buy and hold long-term, waiting for the value to grow. To put it simply, investors are like people planting mango trees, waiting three years to harvest, while traders are like people buying mangoes from the orchard and selling them daily at the market for the profit margin.

But I must warn you: according to statistics from regulatory agencies, over 70% of day traders end the year with losses. This isn’t meant to scare you but to make you aware that if you want to start, you need to prepare well.

Traders make money from price differences in three ways. The first is buying low and selling high, like buying something to resell. For example, buying gold at $4,600, then selling at $4,650, making a $50 profit.

The second way is selling first and buying later. Sounds strange, right? Imagine your friend has an iPhone, and you borrow it to sell for 30,000 baht. A week later, the price drops, so you buy a new one to return to your friend for 25,000 baht. The difference of 5,000 baht is your profit. In trading, this is very easy—just press a button, and the system handles everything.

The third way is using leverage as a multiplier for profit. Suppose you have 1,000 baht; normally, you can buy 1,000 baht worth of assets. But with 1:100 leverage, you control 100,000 baht. Your profit increases 100 times, but so does your risk of loss. It’s like driving fast—if you crash, the damage is severe.

There are four main types of traders, categorized by how long they hold positions. Scalpers open and close within seconds to minutes, making small profits repeatedly throughout the day, like a vendor selling skewers, earning 2 baht per skewer but selling 500 skewers a day for 1,000 baht. It’s very stressful and not recommended for beginners.

Day traders trade within a single day, not holding overnight. Like a market vendor who buys in the morning and sells everything by evening. The advantage is no need to worry about tomorrow’s price, but the downside is you need to be available all day.

Swing traders open positions and hold for 2-3 days up to 2-3 weeks. They don’t need to watch the screen all day—just check in the morning before work and in the evening after returning home. This style suits people with a regular job who want extra income from trading without quitting their job.

Position traders hold for weeks to several months, focusing on the big picture and ignoring daily price fluctuations.

To start trading, you need to go through five steps: learn the basics, practice with a demo account, choose a trading app, plan your trades, and then start trading with small amounts.

The first step is learning the basics. You don’t need to study extensively—just understand the main concepts: what can be traded, how to read price charts, what is Stop Loss, and what is Leverage.

The most important step is practicing with a demo account. Good trading apps offer a “Demo Account” with virtual money that mimics real market prices. Everything is the same as real trading, just without risking real money. It’s like a driving simulator—practice for at least 2-4 weeks before risking your own money.

The third step is choosing a reliable trading app. A trading app is a trader’s tool for earning income. Choosing the wrong one could lead to scams or high fees. Select an app with a real license, easy to use, offering a demo account, no commission fees, and analytical tools.

The fourth step is planning before trading. Don’t trade impulsively. A trader without a plan is like someone buying lottery tickets without a strategy. The plan doesn’t need to be complicated—answer four questions: What will I trade? Where will I enter? How much am I willing to lose if I’m wrong? Where will I take profit if I’m right? The golden rule is to risk no more than 1-2% of your total capital per trade.

The fifth step is to start trading with small amounts. Practice on the demo until confident, then gradually move to real trading. Don’t risk a large sum right away. Start with an amount you can afford to lose without hardship, and increase your capital as you gain consistent success.

Being a trader offers freedom over your time and income, but it also comes with risks and pressure. The advantage is being your own boss—trading anywhere, anytime, with unlimited earning potential. The more skilled you become, the more you can earn. You can start with a small amount, without needing hundreds of thousands in capital, and profit from both rising and falling markets.

However, the downside is the high risk of losing money—70-90% of beginners lose their funds. It’s stressful to watch prices fluctuate all day, which can erode your mental health. Without a salary, if your trades don’t perform well in a month, you have no income. Continuous learning is essential—stopping learning means stopping earning. There’s also a risk of burnout from excessive screen time, which can harm your health.

Based on data from over 8 million traders over 27 years, 74-89% incur losses, but the remaining 11-26% survive by doing different things: having a plan, setting Stop Loss every time, accepting losses as normal, practicing with virtual money, recording every trade. Successful traders aren’t those who never lose, but those who lose little and profit much over the long term.

Becoming a trader isn’t difficult, but it requires three things: knowledge, practice, and discipline. There are no shortcuts or get-rich-quick formulas. The best first step is to open a free demo account and try trading—no need to deposit real money yet. Just see if you like it. If you do, continue learning; if not, there’s nothing to lose.