Have you ever given much thought to what lies behind your forex trading decisions? Numerous factors will determine the day-to-day positions you take, but what is it that underpins your overall trading strategy?
A new personality quiz for forex traders can tell you what type of trading style you’re best suited to based on your personality traits. Whether you’re a new trader trying to establish a trading strategy or an experienced trader looking for a more instinctive trading style, the DailyFX personality quiz can provide trading insights that are derived from your DNA.
Which Trading Style Suits You Best?
Many things separate a good trader from a bad trader. Guts, instincts, timing and intelligence all have a part to play. But certain personality types are also more inclined to particular types of trading. For example, do you prefer a slow and considered approach, or do you perform at your best making snap decisions when the pressure is on?
Take the quiz to determine which of these different types of trading you’re best suited to.
The "scalper" trading style is characterised by traders who take a fast-paced approach, like to work with immediacy and make split-second decisions.
Scalpers focus on short-term price swings to generate regular, smaller wins and typically apply a rigid system with strict entry, exit and risk management parameters to ensure that winning trades outweigh losing trades over time. Although very risky, this quickfire trading style can bring substantial rewards.
Currency pairings that can work well for aspiring scalpers include:
If you have a relentless thirst for knowledge and rely on technical analysis and sound logic to make your investment decisions, you’re well suited to position trading.
"Position traders" employ an academic approach to forex trading, often betting on the impact of macroeconomic and geopolitical themes over the longer term. Trades can be held for months or even years, with technical tools often used to better time trades and manage risk.
Position traders may choose to focus on the following currency pairings:
If you base your trading decisions on up-to-date technical analysis and time your actions carefully, but prefer to wait a relatively short amount of time to achieve your trading gains, you’re a good fit for the swing trading style.
"Swing traders" seek to profit from price swings that take place over a period of a few days to 1-2 weeks. They must dedicate a good amount of time to forex trading and check their trades regularly.
Swing traders may choose to focus on the following currency pairings:
If you pay close attention to world events and appreciate that those events may impact the finance sector, you could experience success as an "event-driven trader".
Event-driven traders seek to capitalise on volatility spikes triggered by high-impact economic statistics, elections and monetary policy. Event-driven traders incur significant risks as they make informed decisions based on their own interpretation of global events.
Aspiring event-driven traders may find success with the following currency pairings:
Those who embrace technology in their everyday life and value its ability to improve decision-making could be a good fit for algorithmic trading.
"Algorithmic traders" make decisions based on an automated algorithm that is purchased commercially or, in some cases, coded by the traders themselves. Algorithmic traders do not expect to make immediate returns. Instead, they are happy to invest their time in the technology to generate larger wins over the longer-term.
Aspiring algorithmic traders may choose to work with the following currency pairings:
Take the Personality Quiz for Forex Traders
Matching different types of trading to an individual’s personality type is certainly no guarantee for forex trading success. However, finding a trading style that’s well suited to your personality type can help new traders find their feet and make the right moves in the market. Just take the quiz and answer the 15 questions honestly to reveal which trading style is the right fit for you.
Image by Csaba Nagy from Pixabay
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