Trading style often correlates with the personality of the trader. It is important to reflect internally on personality and lifestyle before choosing a trading strategy and creating a trading plan. This is because employing a trading style contrary to your personality will cause difficulties down the road in sticking to your trading plan. When a trader finds the trading style that suits them best; the design generally endures future . A trader who isn’t comfortable with a trading style or has not found a range in a selected trading style is that the one who most frequently makes the foremost common trading mistakes.
Trading strategies, systems, and methods that aren’t compatible along side your profile and personality will drastically lower your chances of success.
- TRADING STYLE FOR CAUTIOUS INDIVIDUALS WITH TIME TO RESEARCH
Position Trading – this is often suitable for traders looking to carry positions for a protracted period (months/years), often basing decisions on long-term fundamental factors. Large capital is required to face up to any potential volatility during the lifetime of the trade order to avoid a call . Cautious individuals also will tend to trade smaller sizes, make use of stops, and avoid highly volatile markets.
- TRADING STYLE FOR DECISIVE INDIVIDUALS preferring INSTANT RESULTS
Scalp Trading – A scalp trader looks to open and shut a trade within minutes, often taking advantage of small price movements usually with high leverage. Profits and losses are realized swiftly thanks to the fast-moving nature of this trading strategy. Decisive traders that seek instant results often trade the news by formulating an opinion of how the market is probably going to react and plan accordingly.
- BEING CONSISTENT WITH YOUR TRADING STYLE
Consistency in trading style will cause consistency in results. Altering styles when trades aren’t favourable may be a common mistake with novice traders. Judgement shouldn’t be handed after limited trades, because not every trade is successful. If the trading strategy is sound with proper risk management, sticking thereto should provide the specified results.