What kind of trader are you?

I like reading through comments on trading blogs. However, one type of comment always puzzles me. It’s a type of statement like: “I’m a swing trader” or “I only trade specific stocks”. Far be it from me to scrutinize what market you trade and what timeframe you use, but I was hoping someone would enlighten me.

As a trader and a technician, I find statements like, “I only trade NASDAQ 100 stocks.” to be self-limiting perceptions. I am a trader. Not a day, swing, or position trader. In fact, I regularly employ them all. I do use specific time frames, but my timeframe is fluid wherever I find an edge. I have been more profitable as I have stepped away from day trading every day and instead use my day trade setups to enter and exit swing trades. This merger of trading styles is where I have found an edge.

I trade everything. I began trading stocks and, most recently, have been trading stocks exclusively. There was a time when I traded the emini S&P intraday, but my edge in eminis has since become less profitable than the one I have now. I have also traded forex, but don’t every day because my edge doesn’t always exist. However, when my edge existed in the EUR/USD, I took the trade because it was there. If I had been a day trader of INTC and MSFT only, I would have missed a great trade. I’m now researching option plays and I still trade futures. The point is I don’t limit myself to one market. I’ll trade anything if an edge exists.

Traders get caught up in the perception that they need to specialize. But what does that mean? It may sound cool to say you are a pork bellies swing trader, but do you know why? Do you have an edge in that particular market and timeframe? Or do you have an unnerving affinity for pork bellies? It is better to find your edge and apply it in whatever market and on whatever time frame it exists.

One word about market direction, I wanted to add market direction to this list, but direction is more a function of edge. Some of my setups just work better on the long side than the short side. Is there such a pattern as an inverted cup and handle? Personally, I love to short as much as I enjoy going long. It makes no difference.

What type of trader are you? Let me know and why.

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5 Comments »

5 Responses to “What kind of trader are you?”

HighProbabilityTrader on 29 Nov 2007 at 1:25 am #

Nice post, I might link it.

PS, I think you might have the winning pick on TraderBubs contest.

Bubs on 29 Nov 2007 at 7:16 am #

I think your experience has a lot to do with you being able to trade multiple markets. I think a new trader will have a very difficult time being successful trading more then 1 market on different time frames. I only daytrade because thats the first style that I learned and liked. I also do some long term plays in my I.R.A. and do have a futures account that I have some long term plays but 98% of my trades are daytrades. I think once I become profitable with daytrading I will try swing trading but trying to do both at the same time is difficult for a newbie.

thewild1 on 29 Nov 2007 at 12:38 pm #

I trade everything on the stock market, a little big of forex, and right now I am trying to get into options, although it will take some time.

I rarely move in an out of positions in day to day but more month to month.

I know there are people that are only interested in pharmaceuticals or something, which is all good if they know what they are doing, but in the long run I think those that have more options are goods

Jonathan on 29 Nov 2007 at 7:13 pm #

@HPT. Looks like you finished closer than I today.

@Bubs I can see where it can be a challenge when you’re trying to be good at something so inherently difficult like trading.

@thewild1 Me too, although I know a couple of successful traders who trade a handful of Dow stocks. I know Corey at afraid to trade focuses specifically on DIA.

Investors Blog Network (IBN) Festival #18 | Moolanomy on 03 Dec 2007 at 7:01 am #

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