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Figuring out what sort of trader you are

8th February 2021 Print
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Trading is trading, right? You’d expect it to be the same for everyone in its simplest form. You can decide on a certain platform or broker. Maybe they’re offering fee-free trades or an extensive research library. They might be renowned for great educational resources. Deciding these things can be, but certainly doesn’t have to be, a mix of arbitrary decisions. However, trading, especially as a first-timer, means deciding the key question: what sort of a trader are you?

Simply put, we all have a different set of values, ambitions, strengths, and weaknesses. Know thyself, as they say. Here we’re going to break down the dimensions of a trader and how, once you understand these things, you’ll find the everyday management of your portfolio, and the informed decisions you make are easier - and could be a lot more fruitful to your ultimate goal. 

Who's hungry?

Risk appetite is a fundamental of trading, regardless of market, platform or intentions. Even the pros consider this before opening a fund. In essence, they can’t do much without knowing what sort of trades they want to do. Usually, you’d be advised to never invest more than you’re willing to lose. That’s sound advice, if not a little underdeveloped. Maybe you’re willing to chase larger earnings, but also expose yourself to short-term volatility to chase those gains. The forex market might be your port of call, but that would also require a high degree of time to be engaged as things move quickly in currency markets, at any time of day.

The best way to get comfortable, and figure out your risk appetite is to open a practice account. Many platforms will offer you these resources as a means of helping you get to grips with their services. Try it out, and approach it as if it were your actual money. Through these means, you can get a feel for what sort of trades you feel confident making, and whether long or short-term outlooks suit you best.



As mentioned, forex is a market that moves at speed. Some others won’t. If your risk appetite isn’t for the fast and the furious stuff, it might be best to look at a tracker fund that simply follows a market index, enter a commodity market, or invest in conservative ETFs. Picking your market for the first time can be a bit like entering a room of people you’ve never met. Some platforms offer handy social tools that allow you to observe the behavior of other investors around specific assets. In a recent Trade360 review, the CrowdTrading feature was pinpointed as a unique feature that allowed users to get to know trading attitudes and behavior around different stocks and markets. When choosing what sort of markets you want to enter, don’t be intimidated, instead, treat it as part of your strategy and a means to an end. It can be a real adventure.  

The typical trader has to do their homework, and when they don’t, it makes for a listless and uncontrolled portfolio that follows random hunches or panic moves. The trader who knows his markets, his strengths, whether he’s looking for the long or short-term and - maybe most importantly of all - knows when to stay patient has the better chance of reaching an investment goal.

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