Trading Personality Test - Find Out What Type of Trader You Are 👍

Summary

This 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

• 😀 **Matching Trading Style to Personality**: The video emphasizes the importance of aligning one's trading style with their personality traits for better trading outcomes.
• 💡 **Three Broad Trading Styles**: Scalping, day trading, and swing trading are identified as the three main styles, each suited to different personality types.
• 🚀 **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.
• 🔍 **Personality's Impact on Trading**: The video discusses how certain personality traits, like aggression or impatience, can sabotage trading if not controlled.
• 🛠️ **Managing Personality Traits**: It's advised that traders should manage their personality traits, especially the ones that could lead to impulsive actions in trading.
• 🌱 **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.
• 📈 **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.
• 🌐 **Market and Asset Focus**: The choice between focusing on a single market or asset for familiarity versus diversifying across various markets is presented.
• 📊 **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.
• 📉 **Reducing Losses**: A key takeaway is the significance of reducing losses, which can significantly improve trading results, often more than increasing profits.
• 🔑 **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

00:00

📈 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.

05:00

🛠️ 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.

Keywords

💡Trading Style

Trading style refers to the specific approach a trader takes to the financial markets. It can be characterized by the time frame of trades, the strategies used, and the instruments traded. In the video, the speaker emphasizes the importance of matching one's trading style to their personality, suggesting that a trader's success is often linked to how well their trading style aligns with their personal traits and preferences.

💡Personality

Personality in this context refers to the individual traits, characteristics, and behaviors that define a trader. The video discusses how a trader's personality can either support or sabotage their trading style. For instance, a trader with a short temper might struggle with scalping, which requires quick decision-making and the ability to manage frustration effectively.

💡Scalping

Scalping is a trading strategy where traders aim to profit from small price movements by making numerous trades in a single day. It is characterized by quick entry and exit from positions. The video mentions that scalpers need to be good at making rapid decisions, but also warns that certain personality traits, like aggression or impatience, can lead to poor trading outcomes if not managed properly.

💡Day Trading

Day trading involves making trades during the day and closing all positions before the market closes, not holding any positions overnight. The video suggests that day traders might be more suited to individuals who can tolerate overnight risks and are comfortable with longer decision-making processes compared to scalping.

💡Swing Trading

Swing trading is a style of trading where positions are held for several days to weeks, aiming to capture gains from short-term price swings. The video implies that swing traders may prefer a more relaxed approach, taking more time to analyze the market and make decisions, as opposed to the high-paced nature of scalping or day trading.

💡Risk Management

Risk management is the process of identifying, evaluating, and prioritizing risk to minimize or eliminate potential losses. The video underscores the importance of risk management, particularly in relation to personality traits that might lead to impulsive or aggressive trading behaviors, which can result in significant financial losses.

💡Mean Reversion

Mean reversion is a trading strategy based on the theory that prices and returns eventually move back towards the mean or average. The video mentions that some traders have a propensity for mean reversion strategies, which involve waiting for prices to move away from the mean and then betting on a return to the average.

💡Momentum

Momentum in trading refers to the tendency of assets to continue moving in the direction of their recent price movements. The video discusses how some traders focus on momentum strategies, capitalizing on the continuation of trends, which contrasts with mean reversion strategies that anticipate a reversal of trends.

💡Specialization

Specialization in trading means focusing on a specific market, instrument, or strategy to gain expertise. The video suggests that traders can benefit from specializing in one area, such as becoming a specialist in a particular market or trading style, rather than trying to master multiple areas simultaneously.

💡Discipline

Discipline in trading refers to the ability to adhere to a trading plan and maintain self-control, especially in the face of market volatility or personal emotional reactions. The video highlights the importance of discipline in managing the negative aspects of one's personality that could interfere with successful trading.

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