By: Terry Allen
Have you already noticed how much your trading personality affects your Forex performance and results? You must realize that you will be able to select the best way for you to trade if you can define your trading personality. However, how can you perform this task and locate the optimum match of your main attributes to the major trading styles?
First, you need to be aware of the major Forex trading styles.
Do you prefer to open and close all your trades within a day? Do you have the time available to make all the trading decisions necessary to achieve this type of intense trading? If so, then you should consider yourself as a day-trader.
Is your time precious and you can ill-afford to spend it constantly monitoring your trades? Are you prone to long-term planning and analyzing and prefer to action just a few quality trades over longer time-frames such as a couple of days? If so, then you can classify yourself as a swing trader.
Perhaps you are even more selective and only consider opening positions for extensive time periods of up to weeks if not months. If you do, then you can label yourself as a position trader.
Perhaps you just enjoy the adrenaline rush and excitement of placing many trades within minutes. You fall into the scalping category, if you do.
In addition, your personality will also dictate how you prefer to analyze your Forex positions.
Do you like to study global fundamental news and release? Does the economic well-being of your country and others ring your bell? Do you get a buzz when major figures are released such as interest rate changes; unemployment figures and Gross Domestic Products, etc? If so, then you have a tendency towards fundamental analysis.
In contrast, if you enjoy utilizing technical indicators and studying technical charts, then you have a preference towards using technical analysis as your main technique for evaluating Forex currency positions.
You need to understand just how much your behavior can influence your chances of Forex success. For instance, your ability to cope with stress and other psychological characteristics can have a significant effect on the emotional state of your trading mindset.
Do you think that you possess super powers that enable you to forecast future Forex events? You will be able to recognize if you suffer from this mindset because you will feel that you do not need the use of any analytical tools at all.
Do you have difficulty dealing with your losses? If you spend significant amounts of time mulling over your bad trading decisions and subsequent losses, then you suffer from this condition.
Do you utilize a gambler’s mindset when Forex trading? After all, it sometimes works in casinos so why not with Forex? This is a very dangerous psychology to possess and could cost you dearly in financial terms.
In summary, your personality can play a big part in determining if you will achieve Forex success.