Trading the financial markets has become one of the most popular topic in this era. Baby boomers at the end of World War 2, Generation X, Y and Z had experienced and are experiencing an era of prosperity. These generations have spare cash and they all turn to the financial markets to further grow their wealth. It's thru investing or trading the financial markets, everyone has the opportunity to make an extra money for big purchases or to have a comfortable life.{C}

Therefore there is a big market for investment and trading knowledge for these individual. Consequently, countless books, seminars, interviews and webinars popped out, telling and teaching why you should invest or trade the financial markets. To be honest, there are real traders out there who use their actual trading knowledge to build a brand or trading community. Unfortunately there are also fake traders who isn't really trading at all but selling high ticket items or expensive impractical courses. This leads to this important question: "How to do I separate the real traders from the fakes?" "So that I can learn actual knowledge!"

What does the real trader do?

P.s. Below are just my humble opinions after involves in financial market for almost decades 

Real trader #1: They will tell you Trading is very challenging, be prepared.

Real traders will tell you that trading is not easy. Do not let this statement rain down cold water on your passion. Trading is not easy but it can be simplified, as long as you are prepared. Preparation comes in two things.

Mental preparations.

You need to be prepared that trading is a serious long term business with uncertain income. It's not like the fake traders that say: "Just place an order and watch the money grows!"

"just keep pumping in money and keep clicking buy/sell"

Or even worst..."10 trades a day, each trade makes $200 profits, in 2+ years you will have $1,000,000 in your bank account."

Do not let these statements fool you. These are just powerful psychological techniques to lure into their "courses".

Real traders will tell you that you need to be prepared for some months that you will not be making money at all. If it's as easy as the fake traders say, then nobody will work. Genuine traders will tell you that there are risks of losing money in investing or trading. You have to be prepared to lose some money for the opportunity to make more money. So if you want to be a part time or full time; aggressive or passive trader, be prepared to lose some money.

Trading preparations.

Real traders will share with you that trading is not easy but can it can be simplified with proper preparations. You need to be clear on what triggers your entry, stop loss and take profit. That's it. This is because at the end of the day our entries, cut loss and take profit determines our trading performances.

Hence I always share new or experience traders the importance of having a clear and objective preparations. These preparations will help you know when to execute a trade, cut loss and take profit. It doesn't need rocket science or fancy and complex black box trading system that fake traders selling thousands of dollars to you. All you need is a chart and a few technical indicators or price action that is practical to use.

Real trader #2: Always Manage risks

I am sure you had heard that risk management is very important in trading. But how does it impact our trading? Risk management is basically knowing when to cut loss so that you have enough capital to catch another money making opportunity.

That's it. Every successful and real trader in this world manages his/her risks. By doing so, his/her potential losses will be small and easily recoverable. Best of all, they can afford to suffer a string of losses but just need a small number of winning trades to earn a net profit after fees.

Best way to manage your risks is to know what is your maximum amount you DON'T MIND to lose per trade. If you DON'T MIND losing 20 points per FKLI trade, then you immediately set the 20 point stop loss order once you have a trade.

Fake traders will not tell you about risk management, because if they do so, they cannot back up their promise of 90% or high accuracy. Risk management is not glamorous. Instead they will shower you with false promises and hype you up with get rich quick stories.

Real trader #3: They Dealing the unknown with probability

As a matter of fact, there are only 3 trends in the financial markets: uptrend, downtrend or sideways. There will only be these 3 trends, no matter how advanced technology, mathematics or human philosophy will be.

The only thing we don't know is whether price will go up, down or sideways later. This leads us to probabilities. As traders we need to have a trading system that tells us which direction price highly likely will go to and which direction is unlikely and then we plan for BOTH scenarios. You can do so by setting up both uptrend and downtrend setups. It's call planning ahead. All you to got to next is to wait for the market to trigger either setups then you follow thru with the trade.

Hence you often heard real traders out there sharing this timeless quote: "Plan your trades and trade your plans". A good trading plan goes a long way in helping you avoid emotional trading and start seeing money steadily growing in your account.

On the other hand, fake traders will only tell you one direction/analysis only. While it may look and sound confident, but you will miss out on another money making opportunity when the market moved the exact opposite. Worst, you will be making a rushed trading decision during stressful live market hours. In the end, your emotions will influenced your trades.

As traders we want to be flexible enough in following the market trends and make money from it's volatility. Map out the probabilities and plan ahead with 2 scenarios. Try it out. I am sure your trading will be less emotional and more clear.

Real trader #4: Won't show off 1 big individual winning trade

Often you will see so call "traders" posting their huge winning trade on Instagram, Facebook or on their website. While they deserve some credit for that winning trade but it does not reflect their true trading performances in the long run. You should seek out or inquire their long term trading performances so that you can know whether their trading strategy truly works in the long run or just a one hit wonder.

Trading is a long term business. Hence when you approach real traders, you noticed they are more concern on their long term results. They understood that one winning or losing trade does not have a big impact in 1000s of trades. Unless of course you did not practice risk management in every single one of your trade. Then all it takes is just one silly big losing trade to burn down your entire account.

Back to what we are saying, real traders measure their business progress in yearly performances instead of calculating based on individual trade's ROI. So don't beat yourself down if you have a single losing trade. It does not mean that you are going to fail in this trading business. Losing is part of trading. In contrasts, do not feel that you are top of the world on a single big winning trade, or otherwise you may let your trading emotions affect your trading decisions going forward.

Real trader #5: "My system is not the best in the world"

This is what real traders will say to you, although it sound funny to hear in the beginning. Rest assured, it is nothing wrong. There is always risks and opportunity costs in trading. Hence there's no free lunch in the world. There is no strategy in this world that will make money 100% of the time. Real traders accept that every trading system has it's own natural flaws. As examples:

1. A retracement strategy will miss entry opportunities and trends if the market did not retraced enough
2. A breakout strategy will suffer a lot of false breaks
3. A range bound strategy will miss a lot of trendy opportunity if the market had a strong trend
4. A trend following strategy will lose money during a sideways market
5. Stochastic will gave us a lot of false bottom if the market had a strong trend
6. Moving average will gave a lot of fake signals if the market is sideways
7. Take profit on upper/lower bollinger bands may cause you to miss out on huge profits on a trendy market
8. A trend-line is stable but slow and you may miss out on strong momentum
9. if you trade price action on the lower timeframe, you may get a better entry price but at the cost of potential false signals
10. A gartley/bat/cypher/shark/butterfly trader will miss huge profits if the market turned from sideways to trendy
11. if you trade price action in the higher timeframe, you can catch huge trends but you have to withstand retracements
12. ....and the list goes on...

So you see, each of the examples above all have their unique competitive advantage but that comes with a bit of natural flaws (opportunity costs). Real traders will pick a few trading strategies that fit their style and manage their risks. Only fake traders with an agenda of making money thru their programs only, will promote their trading strategy is the best in the world.

Real trader #6: They always Find ways to further improve themselves

Besides admitting their trading strategy is not the best, real traders also take some time to find ways to further improve their existing strategy. While not every time can find a solution for further improvements, but at least these traders spend time and effort to look for it. This is because the market is dynamic and often there are rooms for improvements. The market is always teaching new things to those who are curious and open mindness.

Real trader #7: They put effort on Back test, Plan, Trade, Record & Review trades

Real traders invest a great deal of time and effort to backtest, plan, trade and record their strategies and trades. Sounds like a lot of hard work. Do not let that down you. The reward from these efforts are significant. You actually going thru the thought process of setting up and triggering a trade when you are backtesting. When you plan ahead, you are actually removing your emotions from trading. Besides that, you will noticed your trading system strengths, weaknesses and also gives you accountability when you record and review your trades. This accountability remove destructive trading habits. Only thru these process can a real trader discover one or few trading strategies that is profitable and suit their style.

On the other hand, fake traders hide these "hard work", and feed you with false promises that trading does not require hard work. Just press and watch the money grow.

Real trader #8: No sugar-coat or Bling-Bling

Real traders won't often show off their luxurious lifestyles, fast cars, fancy restaurants or holidays on their social media. In contrasts, the reason why fake traders do so is purely for marketing gimmick.

A real trader is a good risk manager of themselves. They know how to budget and keep their finance health in order. They will only treat themselves once a while; not often.

Conclusion

By now you will know how to identify real and fake traders. Surround yourself with actual traders who are keen to help you in terms of trading and give you a positive learning environment. Do not be misled by fake traders who out there just to impress you or just want to make money from you.

Trade well and take care my friends.

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