How You Personality Affects Your Forex Trading Style

Richard Dennis, a trader also known as the Prince of the Pit, recruited and trained two dozen students who had never traded before, which was quite a graphic demonstration of the dependence of a trader’s trading success on their individual characteristics.

Curtis Faith described this in detail in his book Way of the Turtle. Provided the same knowledge, trained in the same strategy, “turtle traders” showed different results. Some even excelled the teacher and became millionaires, while others sunk into obscurity.

The story of turtle traders

In the early eighties, exchanges were a place for the elite — there was no electronic trading and Internet, the transactions took place in the pit — the trading hall under the digital scoreboard of running quotes.

The picture of shouting traders, who were nicknamed market makers, has been shown in many movies. It was called making a trade by ear.

Richard Dennis taught traders for two weeks, and after the training he gave them the opportunity to trade by themselves for a month. After this period, some of the students received $1 million for management, while others received smaller deposits.

The Prince of the Pit was looking for personality in traders and believed that it was much easier to master a trading concept of any complexity than to change an average person’s train of thought to the trader’s thinking and to resist the avalanche of feelings and emotions that grows with every hour of the trading session like a snowball.

In trading, as in life, a person is born unique and comes to the Forex market with established character traits, but the uniqueness of the style is formed through training and trading.

What was the strategy of the turtles? With the help of the Donchian channel indicators, they would identify the direction of the trend and the current market high at different periods. The entry was made at the breakout of certain values by quotations ​​in the direction of the trend.

A large role was assigned to the type of buy, sell and stop orders, as well as money management rules, since the deposit margin was tens of times higher than the possible losses.

What influences the trading style?

The first steps on the Forex market are important because they mark all your further trading activity.

Improper training forms traits that subconsciously affect the trading style, and in the future it will be quite difficult to get rid of them, much like bad habits.

Strategies with a positive trading result are favorable for the formation of the trading style. Unsuccessful trading experience has a negative effect on the trading style.

Social trading as communication with successful colleagues, as well as examples of effective work of traders, which are described in books and make a vivid impression on the reader, also play a role in the formation of the trading style.

The knowledge and experience gained while training are put through the prism of character traits. Psychologists distinguish the following relationship between temperament and trading style.

Forex trading style depending on the temperament:

SanguineTrades actively and emotionally, does not fixate on failuresMelancholicPassive, easy to stressCholericEmotional and quick-tempered, prefers aggressive tradingPhlegmaticTrades calmly, without unnecessary emotions, even in case of loss

Personality as your “pass to trade”. Fighting emotions, and self-control

Experienced teachers and the best strategies will not help in becoming a trader if you cannot keep emotions under control. The fluctuations of your deposit amount become a psychological test that can only be passed with the help of individual personality traits inherited or acquired from life experience of the future trader.

Greed, fear of loss, and euphoria from successful trades are stumbling blocks and lead many traders to financial losses and away from the right path.

Before embarking on the path of online trading, psychologists advise beginners to check with the list of individual qualities that a successful trader should possess.

Traits of a successful trader:

  • Ability to set goals and achieve results
  • Organization
  • Moderation
  • Self-discipline
  • Restraint and coolness
  • Confidence
  • Сourage

https://www.liteforex.com/blog/for-beginners/prince/

LiteForex Traders’ Blog — www.liteforex.com/blog/

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