You should be aware of the major distinction between a “professional” day trader and a “retail” trader. The real definition of a professional trader is an individual who is licensed, has experience, and has a full-time position at a trading firm trading the firm’s money. A “retail” trader trades his own money at home or in a private setting.
“Professional traders work for investment/brokerage/trading organizations as employees or possible as independent contractors obtaining a percentage of the profits from their trades. Most of these companies electronically monitor their trader’s performance throughout the day to ensure compliance with their trading policies as well as to protect the firm from a trader going astray and carrying a big losing position. This monitoring must be ongoing or else the firm can be hit with a huge disaster
There is another definition of a professional trader out there. An individual who trades full-time for his or her own account can also be considered a professional day trader, trading either at home or an office setting.
These traders use their own capital and are often referred to as “retail” traders, since they are clients of online brokerage firms. Therefore, you should be aware of the different meaning of the term “professional” and who is using the term. Where you see the term “professional,” it will most likely refer to “retail” traders unless otherwise specified.