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Quiz: What Type of Trading Style Suits You?

Posted by BluFX

 

Quiz what type of trading strategy suits you

Quiz time! Are you more of a scalping trader or a swing trader? Find out with our new quiz. Grab a pen - or make a note on your phone - to jot down your answers, and discover what kind of trading style best suits you. 


Read: How to Find Forex Strategies to Suit Your Day Job ⟶


What Type of Trading Style Suits You?

1. Do you need to feel in control and keep a close eye on things? 

  1. Yes, I am on the go constantly and love it!
  2. No, but I still need to be connected to the market in case of emergency
  3. It depends. I like to be connected when it's convenient for me

2. Do you like to trade volatile markets or slow-moving markets?

  1. I prefer fast-paced volatile markets because the income is greater from the start
  2. I prefer slow-moving markets because they offer more stability and safety in trading
  3. I like both and will trade either when the market allows for it

3. In general, how often do you like to trade?

  1. I love trading multiple times a day, it keeps my interest levels high and I love trying for some quick profits
  2. Every day
  3. I prefer to take a long term view, watching the bigger picture and planning my trades carefully so that I’m calmly in control of my trades instead of anxious and scared that a loss may ruin me

4. Which statement best describes you?

  1. A trader who looks to ride out the ups and downs of the market, averaging a small profit
  2. A trader who likes to trade as a part-time income stream, looking more for stable returns with little risk
  3. An investor who wants an active hand in their investments, making bigger trades to make larger returns

5. Are you an aggressive trader or a more conservative one?

  1. I’m aggressive! I prefer fast-moving markets with high volatility
  2. My trading strategy depends on the situation
  3. I'm rather conservative; I would like to make a safe choice

6. How do you prepare for a trading day?

  1. Use technical analysis to determine the direction of a pair based on past events, including support and resistance
  2. Use a combination of both technical and fundamental analysis methods
  3. Study the economic calendar for fundamental economic releases for that day

7. What is more important, technical analysis or fundamental analysis?

  1. Scouring hours of tape for the smallest clues about what is happening with financial markets on a second to second basis . . .technical analysis, baby!
  2. A little bit of both technical and fundamental research can help identify profitable trade opportunities
  3. Fundamental analysis is more important for me. The main reason that I am a trader is because of my interest in the underlying company or commodities, and their market trends

8. What is your level of risk tolerance?

  1. I am a risk averse person
  2. If I could get quick profits, I would jump at the chance
  3. I am risk-tolerant, but I always make good investment decisions based on careful research and an educated approach

9. Are you a patient person? 

  1. Not at all
  2. Somewhat
  3. Very much

10. Can you trust your process, even if your emotions start to take over?

  1. No, the market is always changing
  2. Your process is your process for a reason. It either works, or it doesn’t
  3. Always!

If you answered... 

Mostly As: Scalping 

Scalping is an advanced trading style that requires fast hand speed and good eyesight for the best results. Scalping is the art of entering and exiting trades quickly with relatively small profits. It's not uncommon to see traders make 20-30 trades in a single day using this technique with the goal of reaping small profits from each trade or set of trades.

Scalping works best with markets that have low liquidity and high volatility. In fact, no-liquidity markets provide ideal conditions for scalping because there's less chance of losing money on your trades due to slippage (a common issue when scalping) or getting stopped out by the market moving against you.

Mostly Bs: Day trading or Swing trading

Day trading and Swing trading are very similar in the sense that both take advantage of short-term price fluctuations. However, the difference is that day trading requires the trader to be active throughout the day, while swing trading does not.

Day trading focuses on making trades within a single trading session, while swing trading focuses on longer-term price movements. Both strategies involve buying and selling securities. Day traders buy or sell based on short-term price movements, but aim to close all of their positions by the end of the trading day. 

Swing traders will hold trades overnight or open a position and leave it open for several days to weeks at a time. Day trading is more suited to those who can stay glued to the screen for hours at a time, monitoring their positions and entering orders as needed until closing time arrives. Swing traders should be comfortable leaving open positions for longer periods of times, and should have the discipline to exit positions that are no longer working.

Mostly Cs: Position or Range Trading

Position trading is a type of trading in which a trader/investor buys or sells a security, currency pair, or commodity for the purpose of holding the investment until it reaches a certain price level. Position traders will hold their investments until it reaches the target price and then sell. They do not try to "catch" a market move, they wait until they think they see the trend. This type of trading takes time and patience - but can be very rewarding if the trader has done their homework and research.

A position trader will take a long-term view of the market and invest in an asset that they believe will rise in value over a longer period of time. With this type of trading strategy you can make money from both rising and falling markets. 

However, it does not mean that you can't lose money by following this strategy. Using this method you have to do more research before you make any decision to invest in any asset no matter what it is. You need to carry out fundamental analysis to determine if there are any factors which could affect the price of the asset.

Read: 5 Tips for Fitting Trading Around Your Day Job ⟶

Tags: Quiz

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