- Time commitments, lifestyle, and emotions can be obstacles to trading
- Market Wizard author, Jack Schwager turned to automated trading as a way to participate in the aspects of trading he enjoyed
- FXCM Mirror Trader can help traders overcome obstacles so they can participate and possibly benefit from their view of the market
In the previous articles, we discussed the importance of choosing a trading style that matched your personality type. In addition we pointed out that it is harder for traders to engage in a trading style and stick to a trading plan that deviates too far from their core personality. While analytical types may be better suited for position or multi-day swing trading, active personalities may be better suited for day trading or short-term scalping. While some traders disagree and believe that with enough effort and commitment, anyone can trade any method or style they choose. However, the task of overcoming habitual tendencies engrained since birth and learning to trade with all of its complexities may be too overwhelming for new traders. It was said best by Market Wizard trader, Randy McKay, “Virtually every successful trader I know ultimately ended up with a trading style suited to his personality.”
Taking inventory of one’s strengths and weakness and emphasizing what you can do well and de-emphasizing what you can’t do is energy well spent. The fact remains that though a trader may have matched their personality to the right type of trading style, the emotions of fear and greed may still hinder a trader’s ability to succeed. These emotions can override one’s noble intentions to follow their trading plan. In addition, a number of variables to manage and execute a trade like placing stops, limits, and correct timing to enter may still hinder a trader. As a trader, you may have a business, job, or family commitments that demand your time. You may not have all the time that you would like to devote to trading.
Jack Schwager, author of Market Wizards had similar challenges. He liked the puzzle solving aspect of trading but did not like other aspects of placing trades. He also wanted his trades to be executed without the emotions of fear and greed clouding his judgement. So he turned to automated trading. By developing systems that carried out trades based on his view of market conditions, he was able to participate and trade the markets on his terms.
FXCM traders who may like Forex trading but have had either challenges in the past sticking to a system, controlling emotions, or dedicating enough time to trading can choose from hundreds of automated trading strategies found on the FXCM Mirror Trader platform. With Mirror Trader, you can copy the trades of experienced traders while maintaining control of your account. Active personalities and analytical personalities can both find strategies that match their objectives.
For example, a trader may like GBPUSD or see the Euro moving inside a large triangle, but may not know when to enter or exit. With Mirror Trader, a trader can choose strategies from a large selection that he/she can filter based on performance and market type, i.e., breakout, trend, or momentum. Once the strategy has been added to a trader’s portfolio, it will place a trade when certain conditions are met. The trade is automatically managed.
In sum, traders of different personalities and lifestyles can all participate in the Forex market and express and possibly profit from their opinion in the market. Whether you are comfortable with a hands-on longer term swing or position trading approach, or shorter-term day trading or scalping approach or even a hands-off automated trading approach through the FXCM Mirror Trader platform, Forex trading has something for everyone!
What trading style fits your personality? Take this online personality test to find out.
--- Written by Gregory McLeod, Trading Instructor
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