Trading Strategy as a Reflection of your Personality

By | August 15, 2022

Look deeper into your trading profession

If you have been following our articles recently, you must know all about the pitfalls of trading, especially when it comes to turning it into a rich business career.

We have told you that it is one of the most difficult professions to succeed and has an inordinately high failure rate. Most traders who jump right in after their education return to their structured work style, having been unprepared for the demands and rigors that trading requires.

A big reason many potential tradespeople aren’t ready for this profession is that they go into the job with a tunnel view ahead of them. They jump into the market because they want to make money. The only desire to make money prevents many novice traders from delving into the commercial profession to discover that there are many more layers than just buying and selling for profit.

The layers and complexities beyond this binary fantasy give way to unique and challenging ways for each and every trader to craft custom trading strategies and trading methods according to their own strengths and weaknesses.

How to find your perfect trading strategy

If you step back from the desire to make money and look inward before diving into the market, you will have a much more accurate view of the market. This means that in order to understand the marketyou need to understand yourself, specifically your personality. This means understanding the workflow that will work for you and allow for your preferred lifestyle.

There are many variables in the composition of a comprehensive trading strategy that takes into account all of your strengths and weaknesses. Remember that no matter how small the details of your preferences are, include them in your master plan (the right chair could be just as important to you as the right trading platform).

In this article, you will find the important factors to consider in order to understand our business personalities.

Negotiation period

Are you a night owl or a morning person? The good news is that it doesn’t really matter when it comes to trading. Unlike other professions, which have rigid schedules and set work hours, if trading while everyone else sleeps is your style, you can do it. The downside here is that you will have to be your own disciplinarian. Without a pre-established rigid framework imposed by external forces, the discipline to place restrictions on yourself is tremendous. If you can’t regulate yourself, trading on your own may not be right for you.

Note that it is important not to consider money when determining the best time to trade. This designation should be based solely on what works for your body clock. You have to do what’s right for your body, not just your idealized income level.

trade setup

The next variable to understand and define within the context of your skills and personality is what trading setup works best for you. We’re not talking about chairs, computers, or monitors (although that’s important), but about how much of technical trader you are and how much of a fundamental trader you are.

The two are not mutually exclusive, so whatever formula you ultimately choose will have elements of both skins at different levels to complete a complete build. For example, you may realize that you are 90% technical and 10% fundamental.

However, before you start adjusting the levels of the settings, it is important to master at least one of the types. From that mastery, you can complement with what is perhaps your weakest setup. The two combined will be your total trading setup.

Business risk tolerance

We have written extensively about the importance of recognizing risk and tailor the amount of risk you are willing to take to your specific strategy. Now the question is how do you determine what the right amount of risk is for you?

A good way to find out your tolerance is to open a small live account with $100 and trade nano lots. Use a reduction calculator to show you how much you need to risk on each trade to avoid a predefined drawdown. If you’re okay with losing 9% of your account but not 10% on a trade, give yourself those parameters. After this, input the rest of your stats and play until the risk of hitting a 10% reduction is as close to 0% as you can get.

The commercial strategy as a reflection of your personality: the final result

When you combine these three elements into a comprehensive trading strategy, you’re well on your way to trading in conditions that are ideal for your personality and style. By following rules and parameters that have been tailored to your unique needs, you have created an environment in which you should be able to thrive. But just because you built it based on your needs doesn’t mean you shouldn’t constantly check to see if it needs to be updated. It can change in subtle ways and therefore constant attention should be paid to your strategy to ensure it is up to date with your latest needs and desires.

As always, remember that trading successfully will ultimately rest entirely with you. In the end, your mentors, teachers, and guides can only give you the tools to learn what is ultimately right for you. Trading doesn’t work on imitation, and no matter how good an example you have, it will always be just that. Success in the marketplace will come when you chart your own sustainable course based on your strengths. Don’t stop at what you can’t do. Instead, build yourself around what you can. There are no failures as long as you are always learning and building towards your perfect trading ecosystem.

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