
From what I have read in books and observed myself in the FX trading
community, there are two types of traders: those who treat the market
as an entity that
must fulfill their goals and those who view it as something almost random with unavoidable periods of losses.
The first group often mentions military terms in their description
of trading process — they battle with the market to reach their goals.
Usually, they set some daily or weekly targets for profit that they aim
to achieve. Then they try to squeeze those pips out of the market. Such
traders do not wait for the profitable conditions and opportunities
to appear, they adjust their methods to get profit out of any conditions
presented by the market. Needless to say, such an approach may lead
to huge losses and disappointments. On the other hand, with a bit
of luck or enough experience and developed intuition, this trading style
will demonstrate astounding results. It is very important for such
traders to be right in majority of trading outcomes as losses symbolize
(and sometimes really mean) defeat. It is also a very active approach
to market, bordering with overtrading at its extrema.
The second group is more passive in its trading and does not try
to dictate its rules to the market but is rather following
the opportunities presented by Forex pairs. These traders rarely
overtrade but are prone extreme
gun-shyness, missing some of the
set-ups
that would definitely trigger positions for the traders of the first
group. Second group traders are not afraid of losing and do not expect
every deal to come out as a winner, they are content with knowledge that
their trading system has some edge and will be profitable overall.
I prefer to view myself as a member of the second group. But,
of course, it is not all “black and white” — there is no clear border
between those groups. Some currency traders may demonstrate behavior
of both groups under different market or daily life conditions.