| | CTA | | Individual Trader |
| Definitive Strategy | Follows a long-term plan based on extensively tested research. Attempts to limit losses on losing positions, while letting profits run on profitable positions. This patient, disciplined approach can pay big dividends: though, with any investment, risk of loss exists.
| | Usually in the markets seeking instant gratification. Because he lacks a definitive game plan he often changes his approach midstream, resulting in impatience and chaos. |
| | The CTA requires what he believes to be an acceptable minimum account size for his trading approach. Knows that an account properly funded may help enable him to absorb losses while waiting for profitable trades.
| | Often undercapitalized and can only absorb a few losses before his trading capital is depleted, usually in just a short period of time. |
| | Often has diversified trading positions covering as many as 25 markets or more, while typically committing only 10-25% of his account's equity to the market at any given time. | | Often commits 100% of an account’s equity to the markets. He commonly trades only one commodity resulting in an overly concentrated position. |
| Timing | Commits attention to following a definitive system, which may look at market prices and trends, and therefore acts immediately upon signals and market knowledge. | | Usually can pay only part-time attention to the markets. He misses news, often acts on impulses that lack proper timing. |
| Discipline | Expects his fair share of both winning and losing trades. Neither result will influence him to deviate away from his preset buy and sell signals. He attempts to cut his losses short while allowing profits to run. Knows market conditions may prevent him from limiting losses to a specific amount. | | Believes his destiny is to predict the direction of the market rather than manage risk. This win-it-back at all costs mindset inevitably could lead to his downfall. He hangs on to losing positions hoping they will come back. Conversely, he will take profits prematurely to validate his prediction. |
