How to find your own trading style
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Thread: How to find your own trading style

  1. #1

    How to find your own trading style

    Hi traders!

    Today I want to talk about very important thing – how to find your own trading style. Why is this so important? There are tons of trading methods over there and few of them can really be employed by trader. Each of us has very individual level of risk tolerance, specific daily routine (allowing or not allowing to use some trading method), temper and other individual characteristics.

    Finding your own trading style is a journey where you explore yourself, it’s not actually about the markets, it’s about you.

    Trading system vs Trading style.

    First of all, let’s distinguish trading styles from trading systems or «strategies». Too often traders believe that finding perfect trading strategy will solve their problems and they will collect profits very easily on a daily (weekly) basis. But if such mechanical systems would exist, there would be not enough money in the world to purchase them. So, there’s no free money on the market. I’m not saying that it’s impossible to earn money trading with mechanical trading strategy, but it’s not «set and forget» trading. It requires constant monitoring, evaluating and reevaluating your algorithm.
    On the other hand, trading style is something that has more flexibility. For example, trader can say that he is a «breakout trader» or «trend-following trader». That’s already a description of trading style. It’s something that that we do, something that we tend to focus on.

    Good price or good timing.

    Most trading styles can be first categorized on ones that allow trader to get good price for his trades, others allow to get good timing (position starts to move in our favor after we entered a trade, or we are stopped out very quickly) whereas relative price may not be very good.

    First class of trading styles allows to generate net many pips in successful trades, but also more elongated possible drawdowns. In other words, the better price we get, the more pips we earn, but also we tend to be wrong more frequently.
    Second class of strategies allows to be right more often than to be wrong but relative size of profits will be also not too big.
    That’s a first categorization. First you should decide for yourself what is better for you – trading in a «sniper mode» with less net profit in pips or trading like a «marathon runner» with larger profits but with corrections or consolidations on your equity curve.

    As you might understand, «sniper-like» trading is mostly breakout trading or counter-trend trading, «marathon-like» trading is position trading.

    Patience vs activity.

    Some traders need to be actively involved in the action. While patience is required for trader (at least, some level of patience), for some traders too rare action would be harmful – they lose stimulus and focus on trading.
    Here we have correlation – the more we trade, the more frequency of trades we have, the less profit/loss ratio we have in our trades. We are naturally limited by daily range when we day trade.
    But also there are times when patience pays off, and there are times when activity pays off. For example, in we trade in trending days, it’s better to leave your position alone and let profits run, it we trade in a «whipsaw», we would earn more if we will fade the price action near extremes several times a day.

    Trading breakouts requires great amount of patience. If you trade breakouts, your window of opportunity will be pretty narrow. Trading in range bound market can be more active while it requires solid understanding of levels that market shows.
    Designing your own trading style.

    To understand what trading style will work better for you, you can answer simple questions:

    • What time can I dedicate to trading every day?
    • Am I risk seeking or risk averse trader?
    • What is worse for me – to skip a big move or to close 2 weeks period with a loss?
    • What do I do better – recognize big picture and focus on it or react on short-term shifts in demand and supply?

    That’s simple check-list. If you honestly answer those questions, you will get better understanding of how you should trade.

    Also, you can find out about trading styles more if you attend free webinar here.

    See you, good luck!
    Last edited by Value trader; 05-13-2014 at 03:02 PM.

  2. #2
    Yes designing our trading style is very important priority first and then we need to have the good trading plan that will help us to control all the activities.Also the money and the risk management is very important for the trading style.For trading only trading system is not necessary but we will have to focus on all the things.

  3. #3
    That was really very much helpful check list in the forex trading business to identify our trading style. And from the answers given to myself i can classify myself to be short time trader and this is the way i want to be taking the forex trading business further to the next level until my checklist answers varies or changes for next few years. Finding the trading strategy is very much important according to me and also the management of the same is critical.

  4. #4
    Join Date
    Nov 2013
    This is not easy, and that is how traders go in their extra trading mile to learn the strategy of a trader first before anything, and by that you will know the next things you can do to get money through the strategy you know. This is a very good pit above, but it is practical to get success in forex.

  5. #5
    Well, all traders need to find their own trading strategy and make a lot of research after all. It's not easy at all to trade forex and we need a lot of time before we can success in this business. After all, this business is very hard and it's not like any random suggestion will give us the profit at here. We need a lot of time to learn first from this business after all.

  6. #6
    Making our own trading style we need to learning more. When we are learning more about Forex business then we are well known about every term of this business. With the help of learning we get minimum experience from here. Using of this experience we are detect our own trading style.

  7. #7
    Join Date
    Sep 2013
    It is not easy to get this done, and if I were the one to table this, I will say that the trader will still have to know the environments of the forex trading first, that is how thing will be fine with the,, if the trader do not know his environments and learn first from others traders, there is nothing of his own that could be done.

  8. #8
    You can choose a suitable trading style only when your personality well. Without choosing your trading style, you will not be able to find a suitable trading strategy for you. Everyone has a unique identity and unique personality of his/her own. Your personality, choice, likes and dislikes will not be exactly same as others, but you might have similarities with others in some cases. In this is why, some like apple juice while others hate it.

  9. #9
    Join Date
    Nov 2013
    Making a good trading pattern is more challenging than it is though of many traders of forex market. When you are careful about the trading and have your own logic to work with, you will be fine. Try to know what work best for you, that is what you should build your trading result upon.

  10. #10
    Registered user mohabbat's Avatar
    Join Date
    Jun 2013
    Trading acount
    Yes I think you are right, because as a trader we need decide it, and my best choice long term trading, and always I follow that but some time I change my style because when I feel over confedance about the market trend. and I have no specially choice for trading time because when I got over all probability then I start my trading but I focus to US trading session.
    Don't loss you hope.

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