Almost every trader I’ve worked with or talked to started backwards in this profession. Humans are strange creatures—we need to try everything, collect all the bumps and bruises, and only then listen to reason and professionals.
Contents
- Why Traders Struggle at the Start
- What Happens If You Start Backwards
- 1. Personality and Timeframe
- 2. Personality and Trading Approach
- 3. Personality and Risk Tolerance
- Your Edge from This Approach
Why Traders Struggle at the Start
Becoming a trader is tough for most people, so many beginners quit and return to their old jobs and income sources. That’s why so few achieve their dream of trading success. But agree that in other fields, few persist without quitting until they succeed. Trading is no different from other professions in this regard.
For those who endure and push forward, the rewards can be huge. This article aims to boost your success odds by outlining three key aspects of your personality you must understand to improve trading results.
I’ll also show what likely happens if you skip defining your trader personality upfront. We learn from mistakes, and paths vary, but others’ experience might convince you starting from the beginning beats going backwards.
What Happens If You Start Backwards
The top reason people become traders, from what I’ve heard, is to make big money, work remotely, and travel the world. Great idea! But it’s the biggest mistake. These folks chase money and obsess over the highest-profit trading method.
For most traders, this doesn’t work. It leads to exhaustion and disappointment. With patience and foresight, you can greatly improve your odds.
Main thing—identify trading methods that match your personality and lifestyle. This lets you pick what fits best amid countless strategies.
Using a trading strategy that clashes with your personality won’t be fixed by discipline alone. You’ll break plans, trade intuitively, and stress during trades. That’s trading reality.
I’ve made the case for knowing your psychotype. Now, let’s examine three key parameters to find what suits you.
1. Personality and Timeframe
First, determine your ideal trading timeframe—or ‘personality timeframe.’ Experiment with three basics:
- day trading,
- swing trading,
- long-term investing.
Test open-access systems on a demo account to feel which timeframe fits your thinking pace and daily rhythm. Seek what suits you personally—not the richest system.
2. Personality and Trading Approach
Beyond timeframe, pick your market analysis method. Broadly:
- technical (price action charts),
- fundamental (news impacting the asset).
Master one fully before advancing. You can profit with both or just one. Personally, I leaned 80% technical, 20% fundamental—ratios vary by trader.
If you’re mostly technical, strategies fall into:
- breakout patterns,
- trends,
- reversal patterns.
Find what’s psychologically comfortable. Add more later—start by mastering one deeply.
3. Personality and Risk Tolerance
The third key is your personal financial pain threshold, or risk tolerance. You’ve heard not to risk over 2% per trade—solid advice. But how much can you risk?
If 2% math fits but feels tense, your tolerance is lower. Exceeding comfort triggers fear, doubt, early exits, and discipline issues.
Demo accounts make this hard—no real money means no real loss perception. Open a small real account ($100 minimum) you can afford to lose. Never start with a big one!
Your Edge from This Approach
Defining these three—timeframe, analysis approach, risk tolerance—gives beginners a huge success edge. You’ll know where to focus knowledge and build strengths, not chase money against your nature.
When seeking a mentor (you will if progressing), this clarity saves time and money.
FAQ
What is the best timeframe for my personality?
Test day trading, swing trading, or long-term investing on demo to find what matches your daily rhythm and thinking speed.
How do I pick a technical trading approach?
Start with one category like breakouts, trends, or reversals. Master it fully before adding others for psychological comfort.
How to determine personal risk tolerance?
Use a small real account you can afford to lose. Find the max risk per trade that avoids stress, even if under 2%.
