Trader? Self, property trading, trader for others or Investor?

We have received some emails asking how the world of trading property inside, their advantages, disadvantages, alternatives, etc … After a time one stares trading where he has spent and is coming to conclusions about everything involved in this world.

The key question is: How do I live in the bag?

As you can see from the title of the post, there are four main types of people entering the market (we could rush to a fifth type, the employee of a broker, but I will ignore this, since this does not work, he seeks the spread (commission) and operates in the market). As I was saying, there are four types of people in the markets:

  • The Investor
  • The Trader institutional employees or
  • The independent Trader
  • The trader Property

Let’s see a little definition of each:

The investor: I define as a person with some knowledge of economics and reading press. Of the three types is the one that has more personal capital initially and often delegate the management of their investments to professional third parties (Beware banks).

The trader employees or Institutional: A minority thus refers to the number present in comparison with the other, but being large institutional traders can move the market if this has little volume. Handle large amounts and are strong in the market.

The independent trader: This person is the one a priori has less initial capital. Few people earn their living directly in the market, to enter have to search high leverage and learn on their own, those who survive are really good. Currently have a weapon the automatic trading to be better, practice and effort are its hallmarks.

The property trader:. He works for companies that leverages its capital, and enjoys low fees are so low in fact that usually charge for operating and liquidity to the market. Your best weapon is the rebates (commission) in underlying high-volume lateral movements.


Once this classification we will see the features of each:


Institutional Trader

Independent Trader

Property trader

Initial Capital


Not needed



Spent time

Very Low / None

Labor Day (minimum 8h)

A choice

Working hours (minimum 8h)

Financial Education

Very Low

University (Master?) + Little Practice

Much Theory + Practice

Normally: Nula, but should be the most expert


Depending on the investment managers

Base Salary +% P & L

Variable (P & L)

Variable (P & L) minus fixed costs and% commission to the company


The most obvious and what everyone would want is to have at their disposal a large capital managed by a professional. Unfortunately for many, getting to have this capital is almost impossible, especially working for others and very rarely on our own (self-employed, micro …), so we can only be traders.

Trader institutional or independent trader, what is the most profitable?

What advantages has to be institutional trader l?

  • At the end of the month you win or lose wages. It is the only way to understand why so many stock market investment funds with negative returns.
  • “Only” have to have a college degree in economics and in some cases a master of finance.
  • Economic stability.
  • Socioeconomic Status.
  • “Learn” strategies that are already working, but do not know how they were created.

What are the disadvantages?

  • Working hours. Subject to company policies and your desires.
  • You boss.
  • Little room for error.
  • Scroll to the workplace.
  • Holidays: ditto working hours.
  • Not sure strategize, just wait a sign of a system that you have been taught.
  • Eventually this type of trader disappears. The trading robots are replacing. As we mentioned in the blog, more mathematical knowledge is required: mathematical expectations, normal distributions, statistical models … Today economists are not looking to manage funds, is seeking physical, computer engineers, statisticians, mathematicians, etc … And by the way, wages are around400-500 thousand euros per year , imagine the returns that are able to take the market.

What advantages has to be independent trader?

  • Your own hours, totally flexible and depending on the strategy day soon.
  • You decide the course, choose your strategy, your risk, you also choose which part of your benefits you stay where you invest, etc …
  • If you’re good you can expect to earn a lot. We talked about a few:  Dan Zanger , Indi Jones , Livermore …
  • You know how to create a strategy; you know you have to do and what not.

What are its disadvantages?

  • You are alone. No one will give a strategy, if you give it are usually missing strategies to refine details. You’ll have to make your the backtest and see if it is good or not.
  • If anyone pressures you’re wrong. This is a double-edged sword: on the one hand do not bother you but on the other you have to realize when we are wrong. Failing one day nothing happens, fail much force us to look for another job.
  • Many initial dedication, many hours of reading and practice. Sometimes it may be years of practice to no avail. Therefore, it is very clear that we must demand much and find those mistakes that rob us of success.

Personal Review and Vision of the Future

Seeing this picture and not disposing of a large capital to invest, (if we did maybe we would say Forex Investors, lol), we strongly believe that the future of trading through the automatic trading , reducing the time in front of a screen waiting to give a little button to increase it shift scheduling strategies. At the end of the day, once you know how to program, deploy many strategies and make a backtest, is a temporary cost much less than doing it manually.


If you have a large capital, the best you can do is find a good asset manager. Find out. Everyone knows how to win when the stock just keeps climbing. The vast majority of funds banks are negative numbers in recent years, is the problem of being forced to buy up not having a clue where.

If you’re lucky and doubts among independent trader or institutional trader, decides:

The least “difficult” is the institutional trader, and you do not have that pressure up.

If you want to learn what trading is pure and simple, do not hesitate, independent trader is your path. It is not easy, but with perseverance you will. Success in trading: positive mathematical expectation strategy + psychology + monetary management.

Related posts:

  1. Strategies practice: Trader or Investor? Why Not Both – part -3
  2. Strategies practice: Trader or Investor? Why Not Both – part -1
  3. Knowing the intraday trader
  4. Strategies practice: Trader or Investor? Why Not Both – part -2
  5. Trading strategy for those who work part time, part 2

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