Trading Personality Test - Find Out What Type of Trader You Are đ
Summary
TLDRThis video delves into the importance of aligning one's trading style with their personality for success in trading. It discusses three main trading styles: scalping, day trading, and swing trading, and how different personality traits can either enhance or sabotage performance in each. The video emphasizes the need to recognize personal weaknesses and tailor trading strategies accordingly, suggesting that focusing on a specific style and market can lead to better results. It also touches on the concepts of mean reversion and momentum trading, advocating for specialization and gradual expansion of trading skills.
Takeaways
- đ **Matching Trading Style to Personality**: The video emphasizes the importance of aligning one's trading style with their personality traits for better trading outcomes.
- đĄ **Three Broad Trading Styles**: Scalping, day trading, and swing trading are identified as the three main styles, each suited to different personality types.
- đ **Quick Decision-Making**: Scalping is suggested for those who excel at making quick decisions, but it's cautioned that impulsiveness can lead to poor trading if not managed.
- đ **Personality's Impact on Trading**: The video discusses how certain personality traits, like aggression or impatience, can sabotage trading if not controlled.
- đ ïž **Managing Personality Traits**: It's advised that traders should manage their personality traits, especially the ones that could lead to impulsive actions in trading.
- đ± **Evolution of Trading Style**: The video suggests that traders should evolve their style by starting with one approach and then gradually adding others as they become proficient.
- đ **Mean Reversion vs. Momentum**: Different trading philosophies like mean reversion and momentum are discussed, highlighting the need to choose one that resonates with the trader's personality.
- đ **Market and Asset Focus**: The choice between focusing on a single market or asset for familiarity versus diversifying across various markets is presented.
- đ **Specialization and Success**: The video argues for the benefits of specialization in trading, suggesting that becoming an expert in a specific area can lead to greater success.
- đ **Reducing Losses**: A key takeaway is the significance of reducing losses, which can significantly improve trading results, often more than increasing profits.
- đ **Discipline and Planning**: The importance of having a disciplined approach and a well-thought-out trading plan that aligns with one's personality and chosen trading style is stressed.
Q & A
What is the main focus of the video?
-The main focus of the video is on matching one's trading style to their personality to enhance trading success.
What are the three broad trading styles mentioned in the video?
-The three broad trading styles mentioned are scalping, day trading, and swing trading.
Why is it important to match trading style with personality?
-Matching trading style with personality is important because it can prevent personality traits from sabotaging trading decisions and can lead to better management of emotions during trading.
How does the video suggest handling aggressive tendencies when trading?
-The video suggests that if one has aggressive tendencies, they should either work on their discipline and personality to contain these traits or choose a trading style that resonates better with their personality.
What is the significance of focusing on one trading strategy before adding another?
-Focusing on one trading strategy before adding another allows traders to become proficient in that particular approach, which can lead to more consistent results and better risk management.
What are the two trading approaches discussed in the video besides the three broad styles?
-The two additional trading approaches discussed are mean reversion and momentum trading.
Why might a trader who is good at making quick decisions not be successful as a scalper?
-A trader who is good at making quick decisions might not be successful as a scalper if they cannot control their negative emotions such as frustration or anger, which can lead to poor decision-making and losses.
What does the video suggest for traders who want to trade both mean reversion and momentum?
-The video suggests that traders who want to trade both mean reversion and momentum should consider focusing on one approach at a time to become proficient before adding the other.
How does the video relate trading styles to different types of restaurants?
-The video uses the analogy of different types of restaurants to illustrate that just as there are various successful approaches in the restaurant business, there are also various successful trading styles, and it's important to choose one that suits one's skills and personality.
What is the advice given for traders who want to branch out after mastering one trading style?
-The advice given is to branch out methodically, starting with mastering one style and then gradually adding new elements or markets to one's trading approach, similar to expanding a successful restaurant business.
What does the video suggest about the relationship between trading frequency and success?
-The video suggests that reducing the frequency of trades by focusing on specific opportunities can lead to better results, as it allows traders to concentrate on high-probability setups rather than reacting to every market movement.
Outlines
đ Matching Trading Style to Personality
The video emphasizes the importance of aligning one's trading style with their personality traits. It introduces various trading styles such as scalping, day trading, and swing trading, and suggests that success in trading is not necessarily linked to the style chosen but rather how well it matches the trader's personality. The speaker discusses how certain personality traits, like a quick temper or aggression, can be advantageous in certain trading styles like scalping but can also lead to poor decisions if not managed properly. The video encourages traders to evaluate their personality traits and how they might impact their trading decisions, suggesting that understanding and managing these traits can lead to better trading outcomes.
đ ïž Refining Trading Strategies and Focus
This paragraph delves into the refinement of trading strategies and the importance of specialization. It argues for mastering one trading approach before diversifying into others, using the analogy of running a restaurant to illustrate the point. The speaker advises against trying to be both a 'burger bar' and a 'Michelin star' restaurant in trading, as it can dilute focus and effectiveness. Instead, they encourage traders to identify their strengths and tailor their trading approach accordingly. The video also touches on the idea of focusing on specific market conditions, such as mean reversion or momentum, and the importance of discipline in sticking to a chosen strategy. The speaker concludes by suggesting that traders should consider their personality traits and how they might influence their trading, and to start with a focused approach before branching out.
Mindmap
Keywords
đĄTrading Style
đĄPersonality
đĄScalping
đĄDay Trading
đĄSwing Trading
đĄRisk Management
đĄMean Reversion
đĄMomentum
đĄSpecialization
đĄDiscipline
Highlights
Matching trading style to personality is key to trading success.
Different traders have different styles: scalping, day trading, and swing trading.
Personality traits can either enhance or sabotage trading performance.
Scalpers need quick decision-making but must control impulsive reactions.
Day traders manage overnight risk and may benefit from a calmer temperament.
Swing traders hold trades for longer, requiring patience and strategic thinking.
Traders should consider their personality's impact on risk management.
Identifying and addressing personality weaknesses can improve trading.
Some traders are naturally inclined towards mean reversion or momentum strategies.
Specializing in one market can be beneficial for those who understand its nuances.
Screening for active stocks intraday is suitable for aggressive, decision-making traders.
Focusing on one trading strategy before adding another can lead to mastery.
Reducing trade frequency can improve trading results by focusing on quality over quantity.
Becoming a specialist in a specific trading approach can lead to better performance.
Trading style should be aligned with the trader's ability to manage their personality traits.
Losses often undo traders more than profits; focusing on risk reduction can be beneficial.
Traders should consider their weaknesses and how they impact their trading decisions.
Narrowing down trading focus can help traders become more effective in their chosen style.
The analogy of different restaurant types illustrates the importance of trading style specialization.
Transcripts
in this video guys we're going to look
at matching your trading style to your
personality stay tuned
hey Traders warm welcome to you all
right so it's really introduction of
different traders in there and watching
Traders progress if we're doing
completely different things Super Active
scalpers guys who are trading swing
trading uh people who are day trading
one specific Market with an indicator
based approach people who are trading
them it's really interesting to see and
there tends to be
no real correlation as to you know who's
doing better than anyone else but what
is interesting is that the people who
seem to be doing better are the ones
that are matching their personality to
the trading style okay and that doesn't
necessarily mean oh I like making quick
decision like getting quick profits on
the scalpa you know it's a little bit
deeper than that so let me explain what
I mean so really we've got three broad
styles from a trading perspective right
we've got a scalping we've got day
trading with swing trading and generally
speaking we go well if you like making
quick decisions you're good at making
quick decisions then you're a scalper if
you prefer to kind of they don't money
overnight risk you do EB day trader and
if you like to kind of hold trades and
take more time to make decisions in a
swing Trader suits you and that's true
to a certain extent but let's go another
level to that
the other level is the risk that your
personality has in sabotaging your
trading so if you are a personality type
that gets very frustrated gets angry
quickly and it could be objective here
and kind of say Hey listen I need to
just look at this through the lens of
everybody else if People's saying hey
you've got short temper perhaps you get
frustrated uh you're kind of your ego
gets in the way of things sometimes
maybe a bit too aggressive when you try
and do stuff then you might say well
it's great for scalping but actually
unless you contain that that's the worst
possible personality type to be a
scalper and very often those are the
people that gravitate towards scalping
on it now and I make the money on a bit
quick on them now on this one without
intriguing size one of this and that and
actually they become great scalpers if
they contain the side that blows them up
and puts them until because that very
positive aspect of the personality that
helps them make those quick decisions
see it going I'm in a minute out the
aggressive side of stuff that allows you
to be a good scalper is undone but when
things done work you're like oh I'm not
closing this trade or I'm frustrated or
I'm not going to do this and and the and
the the anger that comes into having a
trade that goes against you and then the
end of the day you end up losing loads
of money on a trade you're not losing
money in a day and that far outweighs
the skill that you've got the ability
you've got to kind of press the throttle
down on things and make those quick
decisions so sometimes if you're in that
situation you go okay I believe I should
be a scout because I like it in this
maybe it's stepping back because
actually if you're just completely
forgetting about are you completely
focused on the positives and not looking
at the negatives and saying actually
those negatives are on doing all that
positive work and I either have to work
massively on the personality part of it
in a discipline and get that nailed in
or do I need to do something that just
actually resonates a bit better with me
and I can still utilize that work ethic
and that aggression and all that other
stuff in a higher time frame just not
from a training perspective I can put it
into my journaling and put it into my
project and put my checklist I can put
it into my my pre-market prep outside of
trading so it's often thinking that way
and being one step further back and
saying well this is this is why it
should be a scalpa this is why think of
the reasons why you shouldn't or I
shouldn't be a day trade or swing Trader
you know because very often it's the
losses that undo us rather than the
profits many Traders if they halve the
losses would could significantly change
their results
so we've got three Styles scalping day
trading swing training and then from
there you kind of got mean reversion
momentum now some people trade both but
some people have a propensity to do one
than the other you know traders who will
just wait for that extension that mean
reversion into a day there's traders who
will only trade with the momentum after
a gap in a specific stock you know let's
look at some of the different kind of
ways people trade stuff I've got
Industries obviously stocks a new stocks
FX crypto Commodities Etc you've got
traders who will screen for active
stocks and then trade those intraday so
this very aggressive it's shredding
different instrument each day normally
it's a news based approach it's very
active that's great if you can make
those quick decisions but if you're
wrong sometimes it can magnify the worst
the worst size of that personality
others who trade I want to asset
continually so they like the familiarity
if you feel like you're someone who can
get in tune with the market understand
the nuances and subtleties then just
trading One Market might be for you if
you'd like to become that specialist if
you like something new and fresh each
day then maybe screening correct if
stocks is better but you kind of use a
specific pattern and so there's so many
different ways to do it and you've got
some people focus on mean reversion
which is kind of counter Trends some
people trade momentum and really
you know we've got multiple iterations
of these multiple iterations but the key
is to picking one from each section and
becoming good at it before you add the
next so you might say yeah but Mark me
reversion and momentum I want to use
them the same in the same way you know
the same thing and there's a fair
argument to that there's a fair argument
if you're day trading you want to be a
training reversion momentum but my
counter to that is why not get good at
one if that means not trading for a day
or two and waiting for your specific
opportunity then leverage on that and so
be it and say hey I'm a very good meme
reversal Trader I want to become a day
trader trading mean reversion in the
indices right and even then you can go
further and go I'm going to trade into
your I'm going to trade Dax whatever it
is so now you know exactly what you're
looking for specifically and you can
become good at that and if that means
that you reduce the frequency of Trades
that's probably a good thing and then
when you start to say hey this is
working for me I'm doing okay I'll now
add some momentum placing or I'll add
some more markets and you start to know
where you're going to Branch out rather
than just doing everything and going oh
I don't know what's going on
you know maybe your scalper you're going
with a scalp momentum stocks for example
so maybe you set up a system act that
alerts you to stocks that are moving
strongly and you're there to scalp 10
cents 20 cents whatever the stock price
is and that's your job like I want to
identify momentum I've got these tools
to help me identify momentum I want to
see momentum I'm going to jump on
momentum quick on and off with a tight
stop that's all I do all day long and so
you never Branch out into day trading
Industries or looking at currency pairs
or any of this stuff that's just what
you do you are a specialist in that and
you've set up everything for that even
your screens even your alerts even when
you're at the screen all the other stuff
molds around it then maybe say I'm a
swing Trader okay I like to trade
momentum swing trading uh in in Forex
and so you'll see again you adjust the
business plan to suit that and that's
why you can become a specialist in that
because you're right I need to screen
this currency pairs at the end of the
day and to strip out the stuff that I
think's got opportunity maybe put some
resting orders in their fried overnight
when I'm sleeping catch the levels that
I want
etc etc etc and so everything then molds
around the approach you're taking it's
like saying okay
uh I I'm in a restaurant well that's
fine but do you run a burger bar or do
you run a high-end Michelin star
restaurant two very different approaches
one can make equally amount of money as
the other and it can be equally
successful but the approach is very
different at burger bars about
efficiency it's about this it's about
that it's about other stuff Michelin
stars about having the right Chef it's
about having the great service it's
about you know we know there's
differences and scenarios there's no
different in trading but if you try and
be both you try and say oh well actually
you know I do Burgers but at the same
time we do fine high-end dining you're
probably not going to do either of them
very well and sit in the middle and
wonder why nothing's happening a little
bit for trading there's nothing wrong to
say hey I'm going to do burgers really
really well I'm going to focus on
Burgers being the best burger we're
gonna have four burgers on the menu and
that's it okay now we might start doing
hot dogs for example okay now we might
start doing desserts so you Branch out
and decide what you're going to do all
the way another chain and do more of
that and say I'm gonna have another
Burger Bar which will be going to a
different Market rather than sit in the
same market doing something different so
a bit of a broad analogy but I think you
get the idea
I think if you're trading style your
personality think of whether weaknesses
are in your personality and what trips
you up in trading and then say okay do I
need to take that into account and how
can I narrow stuff down do I want to
just trade and and I know that a lot of
people get you know really I get a lot
of pushback for this mean reversional
momentum and they say well I can do both
strategy strategy and yes fine but my
again my counter is why not try focusing
on one for a period of time why not say
I'm only trading meme reversion and that
will mean that you don't trade some days
because a trending down is not for you
and you're fine or you might have a
resting bid in trying to catch up trying
to mean reversion move
um in that perspective rather momentum
following the trade the Inside Out type
trade but that's okay because it helps
you focus down so must consider anyway
guys I don't have all the answers
um I don't know for sure all these type
of things but I'm just trying to share
with you what I think uh might help you
out take care see you next one keep the
risk managed bye
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