Archive for the ‘Forex Trading’ category

What type of trader are you?

March 24th, 2010

I was interested in finding out what trading style suits me best and came across this test… Didn’t really take it seriously at first… but was quite impressed by the accuracy of its results…

http://www.tharptradertest.com/default.aspx?question=1

My result: Independent Trader

You are an Independent Trader!

If the markets interest you, you’ll probably work to develop a logical explanation for how they work. This is because you love theoretical ideas and abstract concepts (in fact, much more so than people interactions). This can be great for trading success, if you don’t get too theoretical. This type of trader profile suggests that you value knowledge above all else. As a result, you’ll be constantly generating new ideas about the market or trying to disprove the ideas that you learn from others…

One of your Trading Strengths

You can quickly determine if a new style of trading or system will fit well with your personality.

One of your Trading Challenges
Your trading could dominate your time and you could become socially isolated, which in turn could upset others, particularly if you have a spouse.

Van Tharp identified three core qualities that are essential to being a great trader:

  1. The ability to see the big picture, new possibilities and connections between things.
  2. Make decisions based on logic and analysis
  3. Decisive, orderly and do things sequentially

Independent traders posses the first two, so need to work on the third. This is really quite true for me… I definitely need to be more orderly.. I need to work on developing a business plan for trading… but how do I do that???

Enhancing Trader Performance

March 21st, 2010

I’m reading the book Enhancing Trader Performance: Proven Strategies From the Cutting Edge of Trading Psychology by Brett N. Steenbarger… The first chapter got me thinking… I realize I never really understood (or tried to understand) myself…

I thought I am a person that needs stability… even though I am self-employed, can’t stand the routine of a 9 to 5 job, and was very miserable when I was bonded for 5 years in my previous job….

I thought I am good at following rules and a mechanical system suits me best… even though when I was a Math student, I never focused on the “How”, but focused more on the “Why”s… I always tried to memorize as few formulae as possible… but rather seeked to understand the concept behind the formulae and derived them myself….

Anyway, I’ve come to some conclusions about myself:

  1. Analytical but emotional at times
  2. Seeks stimulation
  3. Extremely risk averse
  4. Likes the challenge and mental stimulation of solving a problem
  5. Strong need for freedom

I am not sure what trading style suits me best… though I have a vague idea… well, at least I know what does not suit me…

EURUSD 17 Mar

March 18th, 2010
EURUSD 17 Mar

EURUSD 17 Mar

  1. MACD Divergence
  2. Fibo 61.8
  3. Price Action
    -  Candle A broke above a previous high and broke out of the microtrend channel (drawn in cyan).
    - The next candle is bearish engulfing.