One more critical characteristic of successful traders is their personalized trading style. Successful traders know that there are countless ways to make money trading the markets. However, they also know that only a fraction of these ways will work for them. Every successful trader that we have ever talked with, heard of or read about has his / her own personalized way of trading the markets.
It is crucial that you find a trading style that fits you! Everyone has their own strengths and weaknesses and therefore not everyone should be trading the same strategy. You need a strategy that takes advantage of your personal strengths and avoids your weaknesses.
There are endless trading strategies that have the potential to be very profitable. But only a few of them will be a good match with your personality and preferred trading style.
Note: With a personalized trading style, it doesn’t necessarily mean that you need to have a completely original, new & self-developed trading approach. Not everything about your strategy has to be unique. It can very well be a well known, commonly used strategy. But you should at least add some kind of personal touch to it.
From experience, we can say that even if 10 people set out to trade the exact same overall strategy, they will all trade this strategy in their own (slightly) different way.
If you don’t yet know what your strengths and weaknesses are, in terms of trading skills, don’t worry. It takes time and experience to find this out. One great way to learn about your trading personality is by doing some kind of experimental trading period. During this time, you trade with a very low amount of money and try as many different strategies, techniques, styles as you can. While you test all these trading styles, you track your financial and emotional performance.
By doing this, you can find out what you are good at, what you aren’t that good at, what you like, what you don’t like and much more. Having this data should give you an idea about what kind of trader you should try to become. For instance, if you are terrible with very short-term day trades because you need more time to think, feel very stressed and prefer looking at the bigger picture, you should certainly not go into day trading. Instead, you could look at becoming a longer term swing trader.