The allure of big profits often leads people to associate them with being a great trader. It’s easy to think that anyone who makes significant money in a short period of time must have superior trading skills. However, this assumption overlooks the fact that big profits don’t necessarily equate to consistent profitability or strong risk management, both of which are true indicators of a great trader.

In reality, big profits can sometimes be the result of luck, risk-taking, or market conditions that may not be sustainable. The best traders focus not just on making large profits, but on achieving consistent returns over the long term with a strong emphasis on capital preservation and risk management. Let’s explore why big profits alone don’t define a great trader.

Why Big Profits Don’t Define a Great Trader

1. Big Profits Can Be the Result of Luck

• While successful traders can certainly make large profits, many traders achieve big gains due to fortunate market conditions rather than superior skill. For example, a trader might make a huge profit during a bull market or off of an unexpected price movement that aligns with their position.
• In such cases, the trader may not have made an informed decision based on a robust strategy but simply benefited from favourable circumstances. This does not necessarily mean that the trader is a great strategist or consistently skilled in navigating the market.

2. High-Risk, High-Reward Strategies

• To make big profits, traders often take significant risks. This can involve leveraging positions, trading volatile assets, or using speculative strategies. While these strategies can lead to big returns, they also come with the potential for large losses.
• Great traders understand the importance of risk management and don’t rely on high-risk strategies for consistent success. A trader who achieves big profits through reckless risk-taking may not be able to replicate those profits in the future, and their overall success could be unsustainable. Capital preservation is a hallmark of great trading, and a trader who survives long-term through sound risk management is more skilled than one who occasionally hits big gains with high risk.

3. Consistent Returns Matter More

• The best traders are not focused on one-off big profits, but rather on generating consistent returns over time. A trader who makes small, steady profits month after month, while controlling risk, is far more likely to be successful in the long term than a trader who chases big profits without a well-thought-out plan.
• Successful traders aim for a steady compounding of profits over time. Big profits may provide a sense of immediate success, but consistent, disciplined trading that leads to gradual wealth accumulation is the true mark of a skilled trader.

4. Emotional Control and Risk Management

• Great traders focus on maintaining emotional control and managing risk. They don’t let the emotions of greed or fear dictate their decisions. Traders who make big profits might feel the urge to take excessive risks in an attempt to replicate their success, but this often leads to emotional decision-making and can result in large drawdowns or losses.
• The ability to trade objectively, follow a structured plan, and use risk management techniques such as stop-loss orders and position sizing is a defining characteristic of a great trader. By focusing on risk management and emotional discipline, great traders can sustain profitability over the long term.

5. Big Profits Can Be Short-Lived

• The nature of financial markets is that they are constantly changing. A strategy that produces big profits in one market environment may fail to work in another. Traders who rely on a “winning streak” of big profits can easily be caught in a market reversal or changing conditions that result in heavy losses.
• The most skilled traders adapt to market conditions and are not focused on replicating the same success every time. They understand that markets are dynamic, and what works in one scenario may not work in another. Consistency and adaptability are the true measures of a trader’s ability to sustain success.

What Defines a Great Trader?

1. Consistency Over Time

• A great trader focuses on consistent returns rather than looking for big profits. Success in trading comes from being able to adapt to market conditions, maintain discipline, and generate steady returns over the long term. Even if those returns are modest, the ability to be consistent is what separates great traders from those who experience temporary success.

2. Sound Risk Management

• Great traders understand that protecting their capital is just as important as making profits. They focus on managing risk by using tools such as stop-loss orders, position sizing, and maintaining a diversified portfolio. By managing risk effectively, they ensure that losses are limited, and they can continue to trade and grow their accounts over time.
• Risk-adjusted returns are what truly matter in trading, and successful traders prioritise risk management over maximising profits.

3. Emotional Discipline

• One of the most defining traits of a great trader is emotional discipline. Emotional control allows traders to avoid making decisions driven by fear, greed, or frustration, all of which can lead to poor judgment and erratic trading behaviour.
• Great traders have a calm, patient mindset, sticking to their trading plans even when faced with temporary losses or market volatility. They avoid chasing profits or engaging in impulsive trades, focusing instead on making logical, objective decisions based on their strategy.

4. Ability to Learn and Adapt

• Continuous learning is another key characteristic of a great trader. Markets evolve, new tools and strategies emerge, and even the most experienced traders must be open to adapting. Great traders reflect on their mistakes, adjust their strategies, and stay informed about market trends.
• They see mistakes and losses as an opportunity to learn and improve, rather than as a failure. By continuously refining their approach, great traders maintain a long-term edge in the market.

5. Realistic Expectations

• Great traders set realistic goals for themselves. They understand that they won’t always have big profits and that losses are part of the process. They don’t chase after perfection but instead focus on steady growth and risk-adjusted returns.
• They avoid the temptation to compare themselves to others who might be boasting about their big wins. Instead, they focus on what works for them and their individual trading style.

Conclusion: Big Profits Aren’t the Same as Great Trading

Big profits may make headlines, but they are not a definitive measure of great trading. The best traders focus on consistency, capital preservation, emotional discipline, and risk management rather than chasing big wins. While big profits can come from skillful trading, they don’t always reflect the long-term sustainability of a trader’s approach.

True success in trading comes from being consistent, managing risk, and adapting to the market over time. A great trader doesn’t need to make massive profits on every trade, but instead strives for steady, reliable growth that aligns with their personal goals.

If you want to learn how to build a sustainable trading strategy, manage risk, and improve your trading psychology, explore our Trading Courses. Our expert-led courses will help you develop the skills necessary for long-term trading success, without relying on the illusion of big, one-time profits.