If you wish to become funded trader, it is important to understand your trading personality. It is worth noting that your trading style will usually develop on your personality. Before you pick a trading style, you need to reflect on your personality and lifestyle. If you try to use a trading style that conflicts with your personality, it will lead to problems when using your Forex funded account. You will most likely veer off the trading plan once you get funded, which could diminish your returns.
Finding Your Trading Personality
One aspect that influences your personality is the schedule you have in your personal life. If your trading style is not synchronised with your time frame, it could affect the profitability of your Forex funded account. It is worth noting that the forex market never closes. Thus, you can make money at any time. Here are the time frames in Forex trading:
• Position Trading
This is where you stay in a trade for a few weeks and even a few years.
• Swing Trading
You stay in a trade for a few days or a few weeks
• Day Trading
This where to stay in a trade for a few seconds or a whole day
You can now see how defining a time frame can be useful to you. For instance, if you have young kids who require your attention, day trading will not work well for you. Besides that, if open trades cause you to be nervous; you will not do well with day trading. You will often find yourself closing out trades at the end of each day.
Another thing to look at is how you like to live your life. If you love to travel and spend time at the beach, you should opt for swing trading. However, if you are a person who likes to face a new challenge daily, day trading might work out for you. Do not always think about your trading style based on what the instructor is making in their account. If you want to become funded trader who is successful, you will need to pick a time frame that works for you.
Consider the Risk Level
There are various types of risk levels. They can be defined as:
Less than 1% on each trade
Risk between 1%-2%
Risk above 2%
For most traders, it is best to trade at a risk level of low to medium at the start. However, if after some tests you see that you are able to handle drawdowns and take profit, you can start with a tiny live account. If you have data for back testing, you can always plug it into a calculator to understand how much you need to risk for each trader. This way, you can avoid freak-out drawdowns.
The important thing is to understand your personality and pick a trading style that works with it when you get funded. You can try out various trading styles for a month until you find one that makes the most money for you. If later on, you find that it is not working, you can always change it.