Forex Trading Styles: Discover Your Perfect Match

One of the advantages of online trading is the opportunity it offers to express oneself. It's a world that easily adapts to one's personality and approach. Of course, it's not an accommodating world, given the fierce competition that traders are forced into, but it's undoubtedly diverse. One of the secrets to a fulfilling career in trading is first and foremost getting in touch with oneself, understanding one's own attitudes. This is a fundamental step to avoid not so much the wrong actions, but rather the actions that, not being compatible with one's own experience, hardly produce positive results. In short, in trading as in life, doing something against one's own nature is very dangerous. Traders, therefore, are called upon to define their own trading styles. To do so, they must ask themselves three questions. Am I more comfortable with technical analysis or fundamental analysis? This is the first existential crossroads. A crossroads that, in truth, makes sense but only up to a certain point. The two tools, in fact, should be used together. There is no doubt, however, that each one is particularly fond of either technical analysis or fundamental analysis, almost never both. Preferring technique means focusing on numbers, charts, adopting a pragmatic, rational approach that does not perfectly match the needs of creative thinking. Preferring fundamentals means favoring a more varied approach, certainly more courageous, which gives a certain space to creativity (which, however, has little citizenship in trading). This distinction, at least in terms of preferences, is necessary to understand trading styles. However, it is worth repeating: both technical analysis and fundamental analysis should be used. Do I operate in the short term or in the long term? This is another question that is good to ask oneself. In this case, the answers - unlike the previous one - are mutually exclusive. It is possible to alternate between the two approaches, but not to use them simultaneously. Also because they give rise to completely different dynamics. Very often, in fact, "fast" traders have a vision of things that is in stark contrast to that of "slow" traders. They carry out two trading philosophies that have little to do with each other. Those who choose a short horizon are more dynamic, brave, prone to risk. Those who prefer the long horizon are reflective, give a lot of time to analysis, and are prudent. The tactics and techniques also differ. Between the two approaches, the most difficult is certainly the fast one, if only for the great emotional load that results from it. Especially those who do scalping must be good at managing emotions, at keeping fear and possible frenzy at bay. In short, they must have a lot of cold blood. Am I interested in automated trading or do I prefer manual trading? This is also a distinction that needs to be made. In truth, this "either/or" does not refer to a vision of trading or to deep issues. The decisive element is in fact the time available. Those who do automated trading, in fact, engage in it, in most cases, because they do not have many hours to devote to investing, thus delegating to the machine. In this case, in fact, the two approaches are interchangeable. If in fact it is rare for a short-term trader to become long-term (and vice versa), it is quite normal to switch from automatic to normal. The moral of the story is intuitive: there is no style better than another. Everyone must use the one that they feel is most consistent with their personality.