Independent trader vs Retail trader

Retail rule #6: Ignore in-depth strategy completely. If a market’s going up, it will likely keep going up forever. After all, “the trend is your friend.” The chart is all that matters.

Professional and institutional rule #6: Traders who don’t use well-planned strategies are a god-send for professional traders. Such traders clearly have too much money and enjoy making donations to the winner’s club. Avoiding strategy is death to any intelligent trader. Setting a stop loss 2% below entry isn’t a strategy, it’s an invitation for professional and institutional traders to slowly erode your trading capital. Markets are evolving at such a rapid pace that the old cliché “the trend is your friend” can’t be relied on anymore. Don’t act like a horse with blinders on. What if the market makes a violent move against you? How have you protected yourself from catastrophic losses? What steps have you taken to make sure your account doesn’t slowly bleed down to zero?

To paraphrase Kenny Rogers, “if you’re going to play the game, you’ve got to learn to play it right.” In trading, this means having multiple strategies you can call on in different market conditions and developments.

Retail rule #7: Trading education is for suckers. You’ll learn everything you need to know by losing tens of thousands of dollars in your trading account. The fact that educated traders tend to have a higher probability of success is meaningless. If you do decide to take a course, make sure it only teaches you how to properly use all the technical indicators, because that’s the answer to all successful trading.

Professional and institutional rule #7: The saying “a wise man learns from a fool, but a fool never learns” comes to mind. Quality education is the single best thing a trader can do for himself. How do you define “quality”? The best way to assess any education is to ask yourself the simple question “how much time will this education save me?” Quality education should save you time that would otherwise be spent floundering around in the market, losing money, and trying to figure out how things work. Quality education firms don’t try to push weekend “solutions” which don’t work.

Trading is an incredibly complex arena. A good educator offers some kind of long-term education which will be to your advantage.

Retail rule #8: If you only trade in one direction, you eliminate 50% of the risk of loss. What better way to protect yourself? The fact that markets go up and down easily and you can get whipsawed is meaningless. Short selling is too complicated, so why bother?

Professional and institutional rule #8: Trading with any bias is a recipe for disaster. Professional traders understand that markets can move sharply in either direction and stop loss orders can’t always save you. The fact is that markets do go up and down easily, and you can get whipsawed and have your account drained. You can’t eliminate risk, but if you know how to position yourself properly, you can certainly minimize it.

Many traders fall into a directional bias. We are conditioned to believe that money can only be made if prices rise, so a lot of people have a natural long bias. To be successful you need to be able to trade from either a long or short bias. If you’re not comfortable or don’t fully understand short selling, talk to a top quality broker immediately.

Retail rule #9: Free information available on the Internet is pure gold! Why squander money working with a trading mentor who focuses on risk management, trade strategy, and trading consistency?

Professional and institutional rule #9: Anyone who can type can post information online. If you decide to rely exclusively on free information, save yourself the aggravation. Get the correct spelling of your broker’s name and send your money directly to him. At least he might send you pictures of him and his family enjoying your cash. The vultures who post information online will be right some of the time, but nobody knows when or for how long.

In late 2004, bloggers were posting predictions that the Euro would breech the 1.4000 level against the US dollar by June 2005. “Sell your car and go long the Euro at 1.3600,” they said. “The US dollar will NEVER regain ground.” By June 2005, the Euro was trading as low as 1.1661. The free information published had caused traders to lose millions of dollars.

The best rule for advice is “you get what you pay for.” Experienced trading mentors are one of the most valuable tools a trader will ever use. These individuals can literally shave years off your learning curve and place you on the path to profitability. A good mentor should be willing to work with you for at least 6 months.

Retail rule #10: Gamble freely with your profits. It’s found house money, so if you lose it, big deal.

Professional and institutional rule #10: Protect your profits at all costs. Professional traders know how difficult it is to consistently harvest profits from the markets. No trader who has seen any kind of return wants to watch profits evaporate right before his or her eyes. Profits are your payment for all the hard work, analysis, assessment, long nights, and early mornings. Anyone who tells you that it doesn’t matter because it’s “house money” has never been successful as a trader.

Top traders can generate profits and incomes well into the six figure range. To reach that level of success takes a lot of work and a lot of planning. One key step to your success lies in how you perceive the market and your place within it. The retail trader mindset is something that you should avoid at all costs. It is full of pitfalls and dead-end schemes. If you’re serious about your long-term success, you need to think and act like a professional or institutional trader. Once you master that, I look forward to seeing you at the top.

 

i think most of the difference is in the connotation. here is a definition from a trading website...

Definition:
A trader who uses retail brokerages and pays retail commission rates.

Tradestation and Interactive Brokers are examples of retail brokerages who offer direct access execution at retail commission rates.

A trader using a retail brokerage, as opposed to a clearing house, would be considered a "retail trader".


I would guess the majority of traders here are "retail traders" according to this definition.

Personally, i do not think the negative connation is accurate.. there are plenty of "retail traders" that can trade circles around many of the "institutional traders" out there..

 

To me if you are trading for a living you are a professional trader regardless of which broker you use however, Independent trader means a professional trader trading their own capital. Retail trader is someone with a brokerage account who executes some trade and not relying on that as their source of income.