Mind your personality
I believe as people we are different, we have different ways of doing things. Our personalities play a big role in the type of businesses or careers that we end up choosing . I am fully aware that as traders, we are all different in our personalities and needs, therefore we ought to have or prefer different styles of trading.
Questions become answers
The simplest way to find out the type of a trader that you are, is to ask yourself some questions such as, are you impulsive or nervous, or are you a calm person in general, do you get anxious when things don’t go your way? These kind of questions can actually give you an idea of what style you should be adopting when it comes to Forex trading. I have found my own and I have been sticking to it for years. I had to unlearn some personality traits to make it work. That can also be done.
Below I will list a few Forex personalities that I think you can be able to identify your own style and be able to choose the trading style that can best suit you, your personality and your lifestyle. Understanding your own needs is key to identifying your preferred method. Some of the personality traits can be unlearned as long as you are allowing yourself to unlearn them. A good mentor/coach is able to assist with such behavioural issues, because some of them can be changed by adopting new habits.
Simplicity and effectiveness is what this type of trader looks for. Complicated systems confuse this type. They are just cool with a simple yet effective system, steadiness is also important to this type, BUT unfortunately the markets aren’t as straight forward. Some reading will surely be required. This is the fact that we cannot dismiss. Looking at the current markets conditions, one cannot just rely on a “pluck & go” system.
This type of person is nervous by nature, this trader becomes so nervous to handle multiple open positions, has a low risk tolerance and does not feel comfortable taking long term trades. If this type happens to enter a long term trade, they will have sleepless nights thinking of what might happen in the markets.. So in short, this trader is best suited for small volumes, and should be staying away from systems that rely heavily on leverage, because all this can cause negative emotions. short term trades is best suited for this type.
This type prefers to have a very little contact with the system and isn’t really a fan of computers. They prefer a system that is able to run on its own. I think this type can do well on autopilot trading or just copying other traders because they will not have to worry about which trades to take and when and why. If you are this type, I suggest that you start some learning. I was once this type and that also led me to copying other traders and later sourced out signals. I can’t say much about how it all ended, you can find out from this post HERE. I did pen it down. This type is also likely to just want to trust other people to trade for them, which is never a great idea in most cases. I believe that there is no one who can take care of your money better than you can.
This type of trader is up for variety, not only looking at trading currencies but CFD’s as well , like Gold spot, Dow Jones, FTSE 100, Dax, Nasdaq, BrntCrude Oil and many more. This type is the one that is “heads up” with what is happening as far as economic events, geopolitical, Central Banks and their Interest Rates and monetary statements are concerned. They are in the know when it comes to the fundamental reasons why the markets move. Any system that does not including reading and understanding the reasons why the markets move, will probably frustrate this type and it won’t make sense. I am definitely this type and I love being this type. It has saved me from from a lot.
This is the type of trader who prefers high frequency trading (HFT), and the risk appetite for this type is quite high. This type looks for higher gains due to an increased risk. Slow trading systems are too ”tame” for this type. They want to be there, hands on and prefer to do things on their own. This type is the one that sometimes fails to see the thin line between trading and gambling, they can easily gamble because trading high volumes is not an issue for these ones. Their eyes are only set on profits, driven by greed and the need to make it big, forgetting that what they can make reflects what can be lost as well.
Now that you can at least identify yourself and you can see which category best describes you, you can choose wisely and act rationally when taking trades instead of acting emotional. In closing, respect the market and it will return the favour. You may love to read this post about Forex trader Vs Forex gambler. That should also help you to identify your personality traits. Thank you for stopping. To help spread the tips, kindly share this post. If you would like to be notified whenever I publish a new post, you can subscribe to this blog. Look for the subscribe button on the sidebar, enter your email address. An email will be sent to your email address (it may be in the spam/junk folder) click on the link to confirm subscription. You can also download the App on Google Playstore for a quick read and weekly tips which are only posted on the App.