Are all people suited to and therefore likely to excel in the same jobs or careers? Are all people suited to and therefore likely to excel in the same sports? Are all people suited to and therefore likely to excel at playing the same instrument? The answer of course is no. So are all people suited to and therefore likely to excel at the same style of trading? Of course, again, the answer is an emphatic no.
There are many different markets to trade and many different ways in which to trade them. One of the key developmental goals of any trader is to find the style of trading and market that best matches them, their personality, goals and motivations and trading philosophy. A question I am often asked is “How do I know if I am trading the best market and style for me?” The same question could be asked regarding employment choices, an academic subject being studied, or a particular sport being played.
Where traders are working in teams or are part of an organization, there is the possibility of getting external feedback from trader managers, trainers and coaches. This can be extremely valuable, not least because past experience and historical studies can be used.
A further area that I have explored in my own work is the use of psychometric testing (measuring factors such as decision-making speed, intuitive ability, analytical ability, information processing, risk propensity, concentration and focus, emotional flexibility) to help to identify a trader’s particular performance style. We then use this alongside any observational and recorded data to help move traders in the right direction.
This approach has proven to be very effective. On several occasions, traders who were struggling to achieve consistent profitability and success in one market and with one style, have been moved to a different market and/or style. And, within relatively short periods of time, they have showed significant improvements in their trading results. Several have gone on to become successful traders, whereas at one time they may have been one trade away from a different role or career!
Finding your system is going to be the result of a combination of ongoing assessment, getting feedback from others, and time/experience. To help you start thinking about where you are now, and where your magic may be, evaluate ourselves on the following points:
We might use some key indicators to help us monitor this, including:
• Motivation – do you want to do what you are doing?
• Strengths – do you feel that what you are doing is playing to your strengths?
• Interests – are you interested in what you are doing?
• Performance and Results – are your performance and results indicative of high performance or the potential for it?
Much of this information is going to be collated through your trading records and logs, etc.