When you look at forex strategies you will be told to find one that suits you personality. There are many new traders who are confused about this connection between forex strategies and personalities. It is important that you know how your personality can affect your trading strategy and the way that you use the strategy. You should also be aware of the negative impacts on your trading mentality and your goals as well.
The Different Forex Strategies
There are many different forex strategies that you can use to trade on the forex market. There are long, medium and short-term strategies that use technical and fundamental analysis. The suitability of all of these aspects will depend on your personality and how you interact with the strategy.
Personality and Trading Timeframes
The first point that you need to consider when you look at forex strategies is the timeframe you are going to be trading in. There are three timeframes that you can choose from and each will interact with certain personalities. Most traders are not comfortable with trading in more than one timeframe and this is why their primary strategies are based in a single timeframe.
Short-term traders generally have a problem with the idea of having a trade open overnight. If the idea of overnight trading does not appeal to you then you need to consider short-term trading. However, if you cannot grasp the idea of opening multiple trades in a day which last a few hours then you should look at longer term trading.
The Analysis You Use
There are two ways that you can analyse the forex market and they are technically and fundamentally. There are some people who feel comfortable with charts and technical analysis. If you are one of these people then you should consider technical trading. However, there are other people who are better at determining how news will impact reactions and the market. If you are one of these people then fundamental analysis is the right option for you.
Your Personality and Consistency
Many expert traders state that the only way to achieve success on the forex market is to be consistent in your trading. If you are not consistent then you are not going to be able to make a profit. Once consistency has been achieved the profits are sure to follow as you can replicate your successful trades.
If you are using a strategy that does not suit your personality then achieving consistency is going to be harder. When you trade your strategy will be leading you in one direction while your personality and instincts are going to be leading you in another direction. This constant tugging in opposite directions often leads to deviations from your trading strategy. When you deviate from your strategy you are going to be setting yourself up for losses.
Many traders state that when you control your emotions in trading you will not have this problem. While the problem will be muted it will not actually go away. The only way that you can completely control your trading emotions is to have a strategy that you are comfortable with and want to trade with.