Guide: Trader vs Analyst

There are many seemingly good analysts that do are not profitable in the market. The reason is that analyst and trader/portfolio manager are two different job roles. The reason being that they require two separate set of skills. Being a good technical analysts boils down to experience and knowledge. Whereas being a good trader is related to strong psychology and having a trader’s mindset.

Being an analyst requires a certain level of intellect, numeracy and mathematical skills. In crypto, fundamental analysts must go through a large number of data from white papers (add here what Amish wrote for fundamental analysis). Technical analysts must be able to distinguish support/resistance levels on a price chart, spot emerging patterns that can give a certain trade a winning edge.

Being a trader however, requires a strong personality, confidence, composure and patience. With little to no confidence an individual will not be able to let a certain trade breath and take its time towards targets because they’ll become busy doubting themselves. Similarly, with little confidence, a running losing trade would be difficult to close because that would shake their confidence about their analysis and their ability to be “right”.

Traders have to disassociate making money from being right being right. Losses are inevitable, and great traders understand it, as trading is a probabilities game. In the long run,  if the odds are in one’s favor (i.e. risk:reward ratio) that trader will become profitable, knowing that losses will occur over time.

“It’s not whether you’re right or wrong, but how much money you make when you’re right and how much you lose when you’re wrong.” -George Soros-