How do I know what type of trading suits me?

P

Pinozi

Ive been trading for a few years and tried pretty much all markets and all trading styles.

Ive finally found a niche where I can make money as the trading style suits my psychological profile.

I found options trading works for me and for short term trading in futures or fx I found I was more comfortable and profitable trying to pick tops and bottoms

Is there an online resource, tests or books where new traders can determine what type of trading style suits their psychological profile

i.e. is one a daytrader, a trendtrader, a technical trader etc....
 
I think, such tests etc. are too theoretical... Of course, according your psychological profile you get an idea which trading style suits tendencially better but in practice everything is different...
There's no other way than try and error.
 
I think options, and options of futures in particular, are going to gain momentum as a trading product in 2009. It amazes me that options on futures for many major products actually fell in 2008. Market participants perhaps are not educated enough on options but the limited risk (premium paid) with the leverage on leverage offered by options on futures make them the ultimate trading vehicle.
 
I do think different time frames define a traders mentality and psychology.

For example you could say a small time frame day trader would never even think about holding onto 1 trade for multiple hours, days or even a week. Besides the amount of time he has to hold onto the trade he also has to make very large stops which pushes his patience to the point of losing their minds when he sees his money fluctuate.

On the other side you have the trend followers, day to day or week to week traders that feel this type of short term trading is irrelevant. They perceive scalping and micro trading as a waste of time and realize as long they get it right in the long run that is all that matters.

The micro trader most likely has a higher level of energy while the trend follower has a much more laid back psychological state and may even be much more indifferent.

This is just a hypothesis of traders' brains and is most likely way off the truth of real psychological motivations.
 
IMO you should have a long-term goal of being comfortable with multiple trading styles. For example, two of my main strategies are following trends, and picking tops & bottoms. They require almost exactly opposite skills, and I am more suited to fading extremes rather than riding trends, but over the years I've got used to the latter as well.

If you look at things like chess, poker, boxing, MMA etc, most competitors have a distinctive strength, but the best competitors are usually at least competent in all main fields. A Kasparov might be known for tactics and aggressive attacking play, but he is strong on strategy too. That gives him a huge edge over a more specialized player.
 
Quote from Cutten:

IMO you should have a long-term goal of being comfortable with multiple trading styles. For example, two of my main strategies are following trends, and picking tops & bottoms. They require almost exactly opposite skills, and I am more suited to fading extremes rather than riding trends, but over the years I've got used to the latter as well.

If you look at things like chess, poker, boxing, MMA etc, most competitors have a distinctive strength, but the best competitors are usually at least competent in all main fields. A Kasparov might be known for tactics and aggressive attacking play, but he is strong on strategy too. That gives him a huge edge over a more specialized player.
More...

Great analogy.

So back to my original question, it has taken me years to find what works for me trading wise and find my strengths and weaknesses through trial and error.

Is there a way or method to help speed up this process of discovery?
 
Quote from Cutten:

IMO you should have a long-term goal of being comfortable with multiple trading styles. For example, two of my main strategies are following trends, and picking tops & bottoms. They require almost exactly opposite skills, and I am more suited to fading extremes rather than riding trends, but over the years I've got used to the latter as well.

If you look at things like chess, poker, boxing, MMA etc, most competitors have a distinctive strength, but the best competitors are usually at least competent in all main fields. A Kasparov might be known for tactics and aggressive attacking play, but he is strong on strategy too. That gives him a huge edge over a more specialized player.
More...

I lived and died by a two seam fastball (with the seams) I could get it to sink or run; a two seam fastball (across the seams) I could get it to run away to both sides of the plate at different speeds; a split-fingered fastball that made grow men look silly and a four seam fasball that could also make grown men look silly... but in a different kind of way - that one was usually around 95mph.

Point - you need to find what you're good at and maximize it.

B

p.s. Had a nice slider too...
 
Quote from Pinozi:

Great analogy.

So back to my original question, it has taken me years to find what works for me trading wise and find my strengths and weaknesses through trial and error.

Is there a way or method to help speed up this process of discovery?
More...

If you have found what works for you trading wise then you are there!

Your bank account balance is the best indicator of how well you know the markets you have chosen.

Do not complicate things when there is no need to do so!

Trading is a gamble, learn to lose small and take profits regularly, check your bank account balance, keep it in the black, and just keep doing what you need to do, even if it is boring!

There are no experts in the trading game, so don't try and be one!

BLASH and SHABL about 90%

BHASH and SLABL about 10%
 
Quote from Pinozi:

Ive been trading for a few years and tried pretty much all markets and all trading styles.

Ive finally found a niche where I can make money as the trading style suits my psychological profile.

I found options trading works for me and for short term trading in futures..... I found I was more comfortable and profitable trying to pick tops and bottoms


i.e. is one a daytrader, a trendtrader, a technical trader etc....
More...
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Pi, hi;
sounds like you have found 2
that suit you .

And i trust you realize trading is not life....................... ;
no matter the trading style.


Since you have done it profitable, years;
do not over figure/analyze it, especially i know of no trend trader who doesnt use technicals.:cool:
 
Quote from Pinozi:

Ive been trading for a few years and tried pretty much all markets and all trading styles.

Ive finally found a niche where I can make money as the trading style suits my psychological profile.

I found options trading works for me and for short term trading in futures or fx I found I was more comfortable and profitable trying to pick tops and bottoms

Is there an online resource, tests or books where new traders can determine what type of trading style suits their psychological profile

i.e. is one a daytrader, a trendtrader, a technical trader etc....
More...


What kind of video games do you like?
 
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