Our suggested topic for the weekend Help Forum discussion came from the list kindly prepared by â€śjfâ€ť last week.
"How Do You Figure Out What Type Of Trader You Are? Day Trader/Position Trader Or Not Suited To Trading."
Many might have noticed that we recently have included a check-box in the trade template for position trades. We distinguish position trades from day-trades. It can be a subjective decision at times to determine in many cases what is a day-trade and what is a position trade. Our rule of thumb is a position trade is a trade that you are prepared to hold onto for more than 24 hours, but other definitions are acceptable, such as a position trade might have a larger profit target and greater stop loss allowance. This certainly is a valid topic for discussion We urge you to use the Position trade check off box when you feel it is applicable.
Donâ€™t feel in any way that you are constrained to address this topic only. If there is something you might want to bring up, feel free to do so. We need also need future special topic suggestions. This feature will only work if we focus on items of interest to the G-V community.
Please note also that we are now starting our weekly discussions now on Friday afternoons NY time, just as the market wind down for the week. Be aware that Jay, I and others will be checking in on the discussion periodically over the weekend and will participate when we feel we have something to add.
GVI Forex john 16:08:43 GMT - 04/24/2009
Although I know one when I see one, Id love to see a clear definition of a day trader vs. a position trader. In my mind, a day-trader has to get out by the close of business each day.
GVI Forex Jay 17:46:01 GMT - 04/24/2009
The following is from the Trader profile chapter in our book (click on the Amazon banner in the lower right sidebar to order the book):
FOREX traders have different profiles, primarily based on what time horizons they like to tradeâ€”ranging from very short-term to very long-term. Find the one that suits you best and bring all of your trade plan considerations in line with it.
Good traders share common characteristics; so do bad traders. Discovering your bad traits early is a key to not getting knocked out of the game before you have an opportunity to get a firm toehold.
WHAT IS YOUR TRADER PROFILE?
Determining your trader profile early on in your FOREX career is very important to your chances of success. Too many traders jump from one type of trade and profile to another quickly and often. The markets are enormously complex and deep; finding a trading profile is essentially finding your own niche in the market. Once you have your unique space, you can drill deeper for improvements.
The primary considerations in determining a trade profile are:
_ How longâ€”on averageâ€”do you expect to hold positions?
_ How much profitâ€”on averageâ€”do you wish to achieve for each trade you make?
_ How much riskâ€”on averageâ€”are you willing to take on each trade?
Forex Essentials in 15 Trades: The Global-View.com Guide to Successful Currency Trading(Wiley Trading)
copyright John Wiley & Sons, 2009. Used with Permission
Toronto tn 13:48:22 GMT - 04/27/2009
Sorry Jay, I don't mean to sound critical, but I would just make a small point about the term "trader profile," which to my mind may be misleading. Profile insofar as it implies a sort of personality or psychological dimension is imho the incorrect approach.
All the questions you posed are not so much a function of a given person's personality --which may not be what you meant at all in the first place, but it sort of is what the word "profile" implies-- but rather a direct function of the timeframe that one is trading. In other words, those questions you posed are directly answered by reference to the timeframe one executes a given trade in, rather than one's underlying psychological make-up (which is too intangible a concept to really be of any use).
One thing I recall from the book I mentioned in my earlier post here, Farley talks about the primary mistake that inexperienced traders make is to conceive a trade in one time frame and then execute it in a different one altogether. There's a term for this phenomenon but I can't recall it at the moment. Of course he was talking about equities, but in forex because of the structure of the market, this problem of muddling up timeframes is even more acute.
Anyway, just my two cents worth in this interesting discussion.
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