There is often a correlation between the personality of the trader and their trading strategy. Before deciding on a trading strategy and developing a trading plan, it is essential to do introspective self-reflection on aspects of one’s personality and way of life. This is because using a trading style that is at odds with your personality will, in the long run, make it more difficult for you to adhere to your trading strategy.
When a trader discovers the best trading approach for them, that approach will often be maintained over the long term. A trader who isn’t familiar with a particular trading style or who hasn’t established themselves as a member of a particular trading style is the kind of trader that most often commits the most common trading blunders.
TRADING STYLES FOR HIGHLY ORGANIZED INDIVIDUALS WITH LIMITED TIME
Consider the following strategies:
Trading with Swings Swing trades is categorized as medium-term investments since positions are often maintained for a period ranging from a few hours to a few days. The time commitment is relatively low, making it appropriate for investors with limited availability. It is possible to utilize orders to open and close, which will automatically take effect whenever a certain price level is reached.
Automated Trading is an additional method that may be used by traders who are either pressed for time or trade in their leisure time. Traders are only responsible for determining their entry and exit criteria, as well as the number of their trades, and then they leave the rest of the decision-making to the market.
TRADING STYLE FOR CAREFUL PEOPLE WHO HAVE TIME TO RESEARCH
Consider the following strategies:
Traders who want to maintain their positions for an extended length of time (months or years) and who often base their trading choices on fundamental variables with a long-term horizon may consider position trading. To prevent receiving a margin call throughout the life of a deal, you will need a significant amount of money that can withstand any possible volatility. Individuals that exercise extreme caution often trade in lower quantities, use stops, and steer clear of highly volatile markets.
TRADING STYLE FOR CONSCIOUS PEOPLE WHO PREFER IMMEDIATE RESULTS
Consider the following strategies:
Trading on a Small Scale A trader who engages in scalping anticipates opening and closing a position within a matter of minutes, often capitalizing on insignificant price shifts while using a high degree of leverage. Because of the rapid pace at which this trading method operates, profits and losses may be realized very quickly. Traders who are decisive and looking for fast returns often trade the news. They do this by forming an opinion about how the market will respond and then planning accordingly.
BEING UNIFORM IN YOUR TRADING STYLE
Trading using the same approach consistently will provide the same outcomes every time. Beginner traders often make the error of switching trading strategies when the market conditions are unfavorable. Because not every transaction is successful, judgment shouldn’t be given until after a sufficient number of deals. Maintaining adherence to the trading strategy should provide anticipated outcomes if the approach is robust and includes effective risk management.
A SUMMARY OF HOW TO FIND YOUR TRADING PERSONALITY AND STYLE
The foreign exchange market is open to participants with a wide range of characteristics, including personality and way of life. It doesn’t matter whether a trader is most comfortable with a hands-on longer-term swing or position trading strategy, a hands-on shorter-term day trading or scalping method, or even a hands-off automated trading technique; Trading offers something for everyone!