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Which Forex Trading Style Matches Your Personality?

What is your trading style? Have you ever thought of a Forex trading style like something that is supposed to meet your mindset and personality? Well, these criteria can define success in the long run, while the majority of beginners opt for Forex strategies that are trendy rather than techniques that fit their trading personality.

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Becoming a successful trader is hard work. It means not just tons of learning and practice but also means that a chosen Forex trading style is supposed to correlate with your personality and reflect your internal set as well as a daily lifestyle. This is actually the basics when creating a trading plan, which is an essential tool for every beginner trader looking for greater results.

What If not Matching a Forex Trading Style

If you decide to apply a plan that is contrary to your lifestyle or mindset, it will result in a more complex approach that can eventually turn into a daily struggle with yourself. One may find it hard to overcome specific obstacles or utilize proper decision-making.

The mind may tell you “Buy” while emotions beg you to stay cool and sometimes miss bigger profit opportunities. Finding techniques that meet your trading personality is the same as finding a home or a place where you always feel comfortable no matter how the market moves. By the way, the term “trading personality” has been thoroughly investigated by specialists from Utrecht School of Economics.

What Is Your Trading Style?

Now, let’s try to identify specific techniques and strategies that can meet a particular type of character. It is some guide to a trading personality test that will let you select the best-matching tactics or check if the existing strategy is the right one to use.

High-Organized Traders

If you like it when everything is in its place, you can consider yourself a highly-organized person. The following strategies will suit you the most:

  • Swing Trading – a great option for those who want a more flexible approach that combines both short and medium-term trading. The positions are generally held from a few hours to several days. All you need is to track specific price levels that trigger appropriate actions.
  • Automated Strategies – the tactics consider using different software and trading robots to execute trades for you. Self-organization here can play a vital role as you may need to monitor the results and configure strategies appropriately. Automated trading is not about performing on autopilot but consistently scaling automated techniques to work out a winning approach with the help of machines.
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Accurate and Cautious Traders

Being too cautious is not bad. In fact, it reduces trading risks although individuals can miss some great profit opportunities considering market volatility and rapid moves. Luckily, some strategies can suit this specific type of character. They involve:

  • Position Trading – if you prefer not to take actions on impulse, this strategy will be a perfect match. It supposes holding positions for a longer time frame taking into consideration fundamental factors, parameters, and company metrics. Besides, the approach comes with smaller size trading to avoid the risk of losing 100% of funds. Risk management is the key feature of this trading personality with stop-loss orders and other tools actively utilized in a highly-volatile market.

Decisive Traders

If your Forex trading style calls for instant results right here right now, the following approaches might be a good fit:

  • Scalping – the strategy offers minutes to make a decision and open or close a trade. As a rule, scalpers benefit from smaller price movements considering higher leverage. The approach has a fast-moving nature, which is a great option for decisive characters able to promptly react to unexpected market movements.

The Bottom Line

Your trading success will depend on how consistent your trading style is. Some traders try to combine different styles and approaches without taking into account their individual trading personalities, which is a huge mistake. The main idea is to select the approach that will make you feel comfortable all the way despite small losses or huge gains.

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.