How to find a perfect trading strategy according to your personality

by Dwayne Buzzell Forex

Many 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 some copies from other traders. As a result, they lose trades through the strategy they are following is working perfectly for the one who created 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 according to your personality is as important as eating food for energy.

By reading this article you going to understand that how one trader makes money using a strategy whilst another 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 in an attempt 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 trade too early to secure their 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 time frame and frequency

A trader cannot keep eye on every time frame at a time. 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. Explore different strategies for Forex trading so that you can choose the perfect time frame.

A greedy or 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 are probably going to be mad. Because of this they will break their rules and go for some wrong signals and will face losses. So longer time frames are not for aggressive and greedy traders, they should follow higher time frames. On the other hand, for an anxious trader going for a higher 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 is no option rather than keeping an eye on a lower time frame. For the safe players, they are always good in any time frame.

Duration of a trade

How long a trader will keep his position open also depends on his personality. Greedy and aggressive traders often places their take profit level 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 is always confused by his signal, as a result, they close a potential trade without keeping it open until it hits the TP level. Keeping a 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.

Risk management

If a trader wants to keep his bank account safe, there is no other way to do so than by following a good risk management rule. From many sources, you will hear that you should not risk more than 1%-2% of your account in any trade. An aggressive or greedy trader cannot stick with this rule, as they want to earn more money fast. Because of this, they often take higher risks. So you have to choose 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 making a strategy that suits you.