Forex trading in Jordan: What’s your trading personality?

There are many ways to trade forex, and each one requires a different approach. Attitude and personality matter when selecting the one that works best for you.

Whether it’s the sprint of day trading or the endurance race of position trading, choosing the one that fits your personal style will improve your chances of success.

Forex traders tend to fall into six personality types:

  1. Scalpers
  2. Swing traders
  3. Day traders
  4. Event-driven traders
  5. Algorithmic traders
  6. Position traders

Let’s delve into the character traits that make each one unique, and consider the FX trading approaches that suit them.

1. Scalpers

Scalpers are short-term traders who open and hold positions for on timelines ranging from a few minutes to a few seconds.  To be a scalper means building a strategy that rests on frequent trading throughout the day. These traders look to secure a high number of small gains by trading intensively at the most liquid (e.g. the busiest) periods of market activity.

With scalpers, it’s a case of ‘life in the fast lane’. They like the challenges posed by a rapidly shifting trading environment, where they have to absorb new information and react quickly as the market changes. This trading personality tends to be observant, intuitive, reactive, and quick-witted – but laser-focused under pressure.

2. Swing Traders

At a different point on the spectrum are swing traders. They tend to hold onto positions for anywhere from a full day to a few weeks. While the timescale can still be brief, swing traders tend to make decisions based on technical analysis rather than fundamentals, though obviously, they will be watching for the kinds of news events and announcements that can trigger currency volatility.

The typical swing trader will be less inclined to adopt the frenetic pace that marks scalpers (and, as we’ll find out next, day traders), so having a high comfort level with stress and intense concentration isn’t really required. Swing trading does demand an eye for detail, particularly when it comes to analysing charts.

3. Day Traders

Like scalpers, day traders look to execute numerous trades across the intraday timeframe. The day trader’s daily routine probably isn’t quite so edge-of-your-seat as a scalper’s, though to avoid holding anything overnight they will close all positions before the trading day ends. By doing that they reduce their exposure to negative news that can hit prices before or after the market opens or closes.

To find success as a day trader, you have to be tolerant and ready to adapt to rapid price changes and be comfortable using the techniques like ‘fading the gap’ that underpin this approach to currency trading.

4. Event-driven Traders

These traders make their decisions based on fundamental analysis rather than poring over technical charts and seeking the appropriate signals and correlations. An event-driven trader will try to benefit from the dips and spikes triggered by economic news and geopolitical events. These can include announcements from trusted sources related to data points like non-farm payrolls, job vacancies vs unemployment, gross domestic product (GDP), business purchasing (PMI), and elections.

Event-driven trading will be a good fit for people who take a daily interest in world and national news, and who will do the extra work to understand how these kinds of events can have a direct influence on relative currency prices. In terms of personality traits, they tend to be curious, inquisitive, and future-focused. They demonstrate a lot of skill in finding and processing new information and using it to predict how national, local, and global events may play out.

5. Algorithmic Traders

Algorithmic traders are the tech geeks of the FX world. Instead of instinct or fundamentals,  they use advanced software with AI capability to identify opportunities and place trades at the best potential for gains. In some cases, they will use software with defined instructions around stops and limits or use high-frequency trading algorithms. They might have the skills to code the programs themselves or be willing to invest in existing forex trading solutions.

Algorithmic trading tends to fit traders who have a high comfort level with technology and feel confident about its ability to read forex markets and surface opportunities. Because of the reliance on data, algorithmic traders will typically use technical analysis as part of their overall approach – something made easier by some of the leading software solutions.

6. Position Traders

At the far end of the timescale continuum are position traders, who hang onto their trades for more extended periods, from weeks to months and even years. As the longest-holding trading style, position traders spend less time looking at the short-term price fluctuations of a given pair. They prefer to trade against the performance of an asset over a long-term timescale.

If you think adopting a position trader approach could work for you, be aware that it requires patience and a long-term view. Your funds may need to sit for lengthy periods. You’ll need to have a high tolerance for delayed gratification, alongside an in-depth knowledge of fundamentals. Advanced analytical skills are an absolute must if you’re going to succeed as a position trader.


Conclusion

So there you have it. There’s no reason why the trading approach you adopt today needs to be the approach you use in a week’s or a year’s time. Especially when you’re first starting out, it makes sense to try different permutations and find the mix of techniques that suits you best.  Traders in Jordan have been using Jordan forex demo accounts to hone their skills, and our data suggests that this is working for them, as it is in many other countries we looked at.

Maybe today you feel like a scalper, ready to handle the stress of short-term price action. Perhaps you want to leave time for other trading pursuits, so position trading is the most attractive option. It might be that letting software drive your trading strategy gives you the confidence you need to maximise opportunities and de-risk your positions.

Whatever your style or approach, there’s room in forex to experiment, grow and develop. Sign up for a demo account with a leading broker and test your skills in the manner that suits your current needs.

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