Lesson #70 All about different types of Forex Traders

How to Discover Your Trading Personality

There is a good variety of forex traders in the foreign exchange market. There is an assortment of different kinds of traders that are interested to attain a handsome profit from the Forex market. Each and every trader has a unique personality and a dissimilar schedule than each other. They have decided a specific risk level for themselves and even an upper limit for their bankroll.

How to Find the Trader

It may happen that some qualities of several traders may seem similar. However, their success is determined by your personal preferences, situations, trading techniques and personality. You must explore your trading personality with the aim of figuring out your trading techniques. Your trading personality is a deciding factor for a suitable method and style for trading. It must be carefully borne in mind that there is not one kind of plan for each and every trader in the market.

You must have a trading journal with you that would assist you in the task of discovering your trading personality. This would be helpful in identifying your strong and weak points in the trade. You can also examine your thought procedure. Comprehending your personality while you are trading is totally different to normal personality assessment. You can review your wins and losses in trading with the aid of a trading journal.

Different Types of Trading Personality

Steve the position trader:

Steve is a busy person and the wife of Steve is very demanding. Steve has 8 kids, three cats, four dogs, one pet Komodo dragon and he also had two hamsters. Steve was not able to look after such a big family. The salary of Steve is meager. Steve is a doctor.

Steve does not like to sit in the front of computer for whole day. But he loves to read the news about the world economies and would keep a list of economic data releases that would come out every day. Steve would like to do position trade. This means that Steve does trading whenever he has holiday. He would trade several times in a particular year. At the end of the year he would count the numbers of trades that he has done.

Steve uses discretionary fundamental analysis to find his profit. He would examine the news reports for two weeks or he would examine it for an hour and then would try to find the indication of the market. He would work according the analysis that is made by him. The nature of Steve’s are long and he aims at making huge profit in this long duration of time. The stop loss of Steve would range between 100 to 500 pipes and the targets for profit would range from 5000 to 1000 pipes or it can be more then this. His rewards are large and the risk factor is low as compare to the rewards. This way he would be able to make minimum losses and he would try to hit the jackpot at right time.

Steve enjoys being a position trader because it allows him to take full fun of the trade and enjoy his life. Steve is not able to become the day trader because he has certain responsibility towards hi family and profession. The trading method that he had adopted allows him to take the decisions at right time and he does not require looking at the long – term trends. As a position trader Steve is able to look after his family and full his duty too towards his family members.

Martyn the Swing Trader

Martyn is a bachelor. He has a coffee shop that is around the corner and this is the place where he is doing a part time job. He also a trader and he able to watch the market for an hour or he is able to keep a watch on the market for a day or two.

Martyn would hold the trade for short duration of time. Steve would try to make the prediction about the changes that take place for short term. You would also be able to find the changes that take place in the currency pair price and would hold the trade for a day or he would hold the trade for few days. He would try to record the changes that take place in the market and would catch hold of the additional momentum that takes place in the market. Martyn would position the trade for a week.

In evening Martyn would keep a keen watch on the changes that are taking place in the market. He would spend half an hour in reading the economic news and would make predictions about the changes that would take place in 24 hours. He would then decide whether the currency in which he is planning to invest is volatility or not. He would keep a keen watch on two to three currencies and would then read the reports for the day.

After this Martyn would take the major decisions about the trends that would take place in the market. He would go through the charts and would use the technical methods for examine and to find the best deal for himself. He would find the support and it would include resistance like channels, Fibonacci retracements, moving averages and various other factors. After this he would set the limit for order and would also try to find the details about the profit. This way he would be able to take the best advantage of the best deal at right time.

Martyn is a successful trader. He is able to maintain the daily swings that a swing trader requires to maintain. His limit for loss is between 50 to 100 pips and his profit would range between 100 to 500 pips.

Martyn would check his position twice in a day. He would make sure the external factors would not have any effect on his position and the rest of the day he would dedicate towards hi work

Different Types Of Traders

If you want to become a successful trader then you need to spend much of the time in finding the details about the different types of currencies. You should know the duration and the position of the trade that you are willing to enter.

Timeframe can help you to identify the different types of the trading personalities. The following are the different types of trading personalities:

Scalping:

Scalpers trade for the short duration of time. They would come in and go out in limited time only. The forex brokers do not use these types of trading to trade in the forex market. The factor of risk is quite high in this type of trading. It would also aid you to make huge profits in short duration of time.

Day traders:

Day traders would open and close down during the session of trading.

Swing traders:

The swing traders can hold the trade for a day only.

Position Trading:

This type of trading is beneficial to the long term traders.

The following are the types of methods that are used for examine the market:

Technical Analysis:

This type of analysis would help you to find the future price of the currency and it would also help you to know the future movements of the market.

Fundamental Analysis:

It can be used to examine the economic news reports. You can take the help of the indicators like GDP .CPI and various other indicators. This would have an effect on the economy of the country and the currency.

How To Become Successful In Forex Market

You have to do a lot of hard work in order to become successful in the forex market. A huge amount of time is invested along with terror, weep and blood. You should be realistic from the very beginning if you are a beginner. You must invest a small amount in the forex and then repeatedly evaluate the trades that proved profitable for you. You must also track down those trades that failed.

Know your strength and weakness

You must do a proper homework before you trade on the forex market. You have to polish your strengths and work on your weaknesses. Your schedule should also be appropriately assessed.

You can also refer to the trading journal to answer the questions that arise at the back of your mind. This would give you a brief idea about your trading on the forex market under favorable and unfavorable circumstances. This will assist you to select a trading personality which will be extremely attuned with you.