Do you know what type of trader are you?

In this episode of Truth About FX, Walter dives into creating your own strategies and why copying from the “gurus” might be your biggest mistake. He digs into understanding your risk profile, the Cycle of Doom, and building up your confidence.

Download (Duration: 07:34 / 8.7 MB)

In This Episode:

00:37 – face the challenge

01:45 – two things to understand

03:03 – risk profile

05:25 – break it down

Tweetables:

Decide your type of trading [Click To Tweet].

Find the strategy that fits you  [Click To Tweet].

Take responsibility for your trading [Click To Tweet].

Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.

Hugh: Hi, Walter. We’ve got a question from a reader and this person asks: “I’ve been through about or over 500 indicators and price trading systems.” Now, this person faces the challenge of creating strategy with these tools and don’t know where to go from here. They’re not profitable yet and they’re pretty frustrated. What would you recommend?

Walter: This is a good question. It sounds like this trader… What’s going on here is, essentially, he’s or she’s lost confidence. It’s because of the Cycle of Doom that I’ve talked about where you hop on an indicator or strategy for a little while until it goes bad and then you hop on a new one. That sort of thing.

What’s happening here is I believe, if you read between the lines of the question, it says, “I can’t build my own strategy so I’m looking for gurus to try a different strategy.” What’s happening is this trader is shifting responsibility from himself to the gurus.

It’s like, “Okay, I’ve learned what I can and I can’t make it work so I’ll rely more on what other people do.” In my estimation, that’s a huge mistake. I think what’s going on here is not the right thing and there’s basically two things that this person needs to understand.

One is, what type of a trader are you? Do you like to follow the trend or do you wait for the end of the trend? Do you like trading when the market is consolidating in a box and just go up and down in a channel or something like that or you want to trade it from one end of the channel to the other or one of the box to the other? Or, do you like when the market is really, really, really quiet because you know it’s going to break out and just go crazy sooner or later?

You have to decide what type of trading do you do. Do you trade range-bound markets? Do you trade trending markets with the trend? Do you like to see the collapse of trend or do you like to trade breakouts? There are so many different ways to trade even though we all give them fancy names and every guru says, “I invented it.”

There’s really a few different ways to trade. What I would say is look and decide how you want to trade. Find the strategy that makes the most sense to you. You can build more later but find the one that really resonates with you and then you n...