When you start trading on the foreign exchange rate market you are told to consider how strategies work with your personality. There are a number of different foreign exchange rate trading personalities that you need to know about. These personalities will determine the type of trading you do and the strategies that will work with your personality. It is important that you find out where you fit and how this affects your trading.
The Long-Term Foreign Exchange Rate Personality
The first personality for foreign exchange trades is the long-term personality. These traders are those who enjoy watching something grow and take their time in doing things. These traders generally see no pleasure in getting something quickly or doing anything for short-term reasons. These traders will be happy to hold open a position for weeks or months.
Most long-term personality types will complete positions trading. This trading uses fundamental data to determine what the long-term movements of the market is going to be. It is important that these personalities have large amounts of capital to buffer the long-term trades.
The Medium-Term Personality
The second type of trading personality is the medium-term personality. These traders do not like to work in very long timeframes. However, they are not comfortable doing this for a quick profits. A lot of people fall into this category because they are neither long-term nor short-term traders.
Medium-term trading personalities are generally swing traders. These traders use both technical and fundamental analysis to determine what the market is going to do. They will hold open positions for at least one day and up to a week.
The Short-Term Personality
The short-term personality is where a most traders feel they fit. This is due to short-term personalities being day traders and liking quick profits. The problem is that many of these traders are not actually short-term personalities. A lot of the true short-term personalities have a lower attention span and become bored very easily. The generally do not care if they win or lose on a trade as long as there is a quick conclusion.
Most of these trading types use day trend trading strategies and scalping. They will make a profit on the small movements in the market because this appeals to their short attention span. The short-term traders that are able to hold positions for hours usually supplement this with a few shorter traders. These traders will never hold a position overnight or for more than a few hours.
The Combination Personality
There are some traders who have a combination personality. These people are generally opportunists who see a profit in every part of the market. In real life these traders will try anything once and use a number of different strategies in everything they do. These traders often have more than one trading strategy that can be used in different market conditions.
Combination traders are able to trade in trending and ranging markets because they are the most adaptable of all traders. They are also comfortable with any type of analysis. A lot of these traders are medium-term traders who employ short-term strategies as well.