A lot of traders do not understand the importance of building a trading strategy according to their personality. Most of them just collect strategies from the internet and others just copy them from other traders. As a result, they lose trades through the strategy they are following in working perfectly for the one who has built it. Taste differs from man to man, you cannot just impose one person’s taste on others. Almost 96% of traders face losses because of this copy-paste rule. So making a strategy that suits your personality is as much important as eating food for energy.
By reading this article you going to understand how one trader is making money and another one is losing money by following the same strategy.
There are 4 types of trader. They are:
- Anxious Trader: This type of trader often misses good entries even though they are in front of their trading platform.
- Aggressive Trader: They often break their rules to earn more.
- Greedy Trader: They often place their take profit level too far from where it should be to earn more. As a result, the market goes against them without touching the TP level.
- Safe player: They close their trades too early to secure money.
From these four types of traders find out what type of personality you have.
Now we are going to talk about finding a perfect trading strategy according to your personality.
Trading timeframe and number of trading
A trader cannot keep an eye on every time frame at once. If he tries to do that he will sure miss potential entries. Charts look different in every time frame and because of this traders become confused. In the 4 hour or daily time frame, you can find signals in between one or two weeks if you follow a lower time frame you may find a short time signal every few hours or days. But to ensure profit, you must find the best broker in Hong Kong. Look at this site and you will know what a good broker has to offer to retail traders.
A greedy and aggressive trader cannot wait for long, because they want to make money quickly. If they find trades after a 1 or 2-week gap, they probably going to be mad, because of this they will break their rules and go for some wrong signals and face losses. So longer time frames are not for aggressive and greedy traders, they should follow lower time frame. On the other hand for an anxious trader going for a larger time frame will be harmful because they often miss trades and if they can’t find a signal after missing a good signal they will lose hope and will start making the wrong decision. For them, there are no options rather than keeping an eye on a shorter time frame. For safe players, they are always good in any time frame.
Duration of a trade
How long a trader will keep his position open that also depends on his personality? The greedy and aggressive trader often places their take profit level at a much higher place because of the confidence from the signal. As a result, they often see the price going reverse and taking back there profit. An anxious trader always confused with his signal, as a result, they close a potential trade without keeping it open until it hits the TP level. So keeping your trade open for a longer period can be harmful because the market can go against you anytime, so finding a perfect duration for each trade is very important.
If a trader wants to keep his bank account alive, there is no other way than following a good risk management rule. From any source, you will hear that you should not risk more than 1%-2% of your account in any trade. An aggressive and greedy trader cannot stick to this rule, as they want to earn more money in less time. They often take higher risks. So you have chosen your risk per trade according to your personality.
In conclusion, we can say that, if you want to be a successful trader you have to make a strategy and making a perfect strategy is an ongoing process. By reading this article you may identify your personality and can start building a strategy that suits to your personality.