Tuesday, July 24, 2012

Thank God I’m a trader, not an analyst!

There is a huge difference between being a trader and being a market analyst.
Analysts are paid by being right. On this basis alone I am not smart enough to be an analyst. Traders are paid by managing risk. These two skill sets are a world apart. In my experience, people who try to be traders by being analysts usually lose their grip at both ends of the rope.
An analyst will be judged negatively by poor market calls. When wrong, a trader closes the trade and moves onto the next opportunity. Hopefully, little harm done! Being wrong is a fundamental assumption for a trader.
Analysts study industries, companies and economic conditions. Traders, at least most traders, study price and could care less what company the price represents.

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