How to Assess Your Trading Personality
It is very common for new traders to go in search of the ‘Holy Grail’ trading strategy that will make money for them consistently.
But, unfortunately, trading is not 'one size fits all' and every trader comes with attributes that make them unique.
Although there may not be a ‘Holy Grail’ strategy that suits every trader, there is the right overall system that will perfectly suit you. But to find it, you need to switch your attention from searching for it, to creating it!
You need to learn how to use your unique abilities to your full advantage.
Know Your Strengths And Weaknesses
By first understanding your ‘trading personality’ and then developing a trading style that synergises with your unique traits.
To do this, you have to be self-aware enough to give an honest breakdown of your strengths and weaknesses.
Everyone is unique, so unfortunately, I can't prompt you for absolutely every possible skill or personality trait you might have. But there are steps you can take to work these out for yourself.
Start by assessing your skill set. You're likely to already have an awareness of what things you are good at and what you struggle with. Think about your current line of work, studies or hobbies and how you perform in certain types of tasks.
List down any possible skills you have. Make sure you don't neglect anything, just because you don't see the relevance of it. Once you start trading, you will be surprised by the links you will make to certain skills. So this list may help you in the future to build a system more closely suited to your strengths and abilities.
Understanding Your Own Personality
Assessing your personality traits is often a bit more complicated, as it involves thinking more introspectively, which is quite tricky for most people.
At the very start of The Duomo Method course, we will ask you a series of simple questions. These questions act as a prompt to get you thinking in the right direction for understanding your trading personality and taking the first steps in creating your tailored trading system.
To get started today, here are some things to consider in your self-assessment...
- Do you think you are well disciplined?
- What is your risk appetite?
- Are you patient?
- How is your ability to perform under pressure?
- Do you consider yourself to be impulsive?
By building a profile of how you are likely to react to particular types of situations, you can begin matching attributes of a system that align with those in a way that stacks the odds of success in your favour.
For example, if you know you hesitate under pressure and become flustered, you will see that trading over a short time horizon is unlikely to be putting you in a position to succeed.
Whereas, if you know you’re impatient and like to be hands-on, trading over the longer term will only lead to you taking unnecessary actions that sabotage your trades.
Likewise, in terms of the steps required in the system, your individual characteristics will help you find the right match. If you like to be diligent and have all bases covered, a more detailed system that seeks to understand more variables will be preferable as you’ll feel more at-ease in your decision making. Whereas, if you know you are unlikely to put in the preparation work, a system that relies on extensive planning will only become neglected and underutilised.
Trading Systems Are Simpler Than You May Think
Trading systems ultimately serve two purposes:
- To define the type of trades that are being targeted
- To have steps that lead to that type of trade being found
Therefore, by going through the previous steps we’ve discussed, you’ll know what type of trade and what type of process to find it will match your strengths with the least possible friction.
Of course, what we’ve discussed is a high-level overview. The steps needed to uncover your personal characteristics and the right system for you is going to differ for each person. If you want hands-on support in achieving this, check out the early sections of the Duomo Method course or post a message in the community for some guidance.