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What Is Your Futures Trading Style?

December 18, 2018 by Daniels Trading| Futures 101

Futures trading requires both creativity and a pragmatic approach to conducting day-to-day business. Unlike professions where you work in a group or team, active traders must do everything themselves, playing the roles of manager, market pro and accountant every time they make a trade.

Pulling off this diverse array of duties requires a wide-ranging skill set, and having certain personal attributes can ease the physical and mental demands of future trading and boost long-term sustainability. Understanding your own personality, talents, and tendencies is key to becoming a winner in the marketplace.

Know Thyself Before Entering the Market

Trading in the futures markets from a position of strength is much easier said than done. Studying the market, developing strategies, and using the services of a competent futures trading broker are all tasks that most traders readily accomplish. Nonetheless, sustaining long-run profitability proves elusive for many traders.

A primary reason for failure in the futures markets is a disconnect between a trader’s adopted methodology and his or her personality. Any conflict between the two will undermine the viability of even the strongest trading strategies. If you do not believe in your approach, it’s sure to crumble in the face of adversity.

The best way to align your personality and trading approach is by conducting a simple self-inventory. By answering these six questions honestly and thoroughly, you’ll gain insight into your own psychological makeup.

Read our guide, Basic Training for Futures Traders, and discover 50 of the best tips from experts.

  1. What does money mean to me? Views toward money stem from our surroundings, upbringing, and current financial situation. Understanding how you feel about money will help to identify your ideal risk profile.
  2. Am I right-brained or left-brained? Active trading is the intersection between the analytical and creative mind. Being aware of your tendencies in this area is useful in choosing strategies that are intuitive.
  3. Am I paranoid and irritable? Flying off the handle easily or believing the market is out to get you are destructive to profitability. If you are a hot-head, a hands-off approach to the markets may be worth investigating.
  4. How do I respond when adversity strikes? The market is sure to challenge even the toughest individuals. Being resilient is essential to success.
  5. Can I think on my feet? Active trading involves decision-making on a minute-by-minute basis. Having the ability to be decisive is imperative.
  6. Is the sky the limit or is the limit the sky? An optimistic perspective toward the markets, and even life in general, is a common attribute among strong traders.

These questions are a great place to begin your self-evaluation. The answers touch on your temperament, views toward money, and creative inclinations. You can use this information to tailor a custom trading plan designed to eliminate any psychological conflicts.

Of course, as in all things trading, change is guaranteed. Your answers to many of these questions will evolve over time, as will your personality and trading style. As an active trader, current performance is everything, and the development of your trading style never stops. It will be important to revisit the quiz periodically to fine-tune your approach to the marketplace.

Which Is It: Fundamental or Technical?

A trader’s personality and aptitudes are key determinants in whether fundamental or technical trading strategies are ideal. The answers to the quiz above should give you an idea of who you are and which styles of trading will give you your best shot at achieving longevity in the marketplace.

Specific attributes lend themselves better to certain styles of trading. Here are a few skills and personality traits typical of fundamental and technical traders:

  • Fundamental: Traders who focus on traditional aspects of the markets are inclined to trade according to fundamentals. They are rational, logical, detail-oriented people who believe in cause-and-effect relationships. A big picture perspective is common, with the primary goal being to spot a security’s intrinsic value in relation to performance, growth prospects, and various economic trends. Fundamental traders often practice a discretionary trading methodology.
  • Technical: Market technicians are interested in the behavior of price action and little else. They typically fall on the creative side of the personality scale but also possess strong analytical and numbers skills. Individuals who flourish using technicals are commonly interested in systems development and trade automation.

Not Sure Which Way to Go? An Experienced Futures Trading Broker Can Help

If you’re having difficulty deciding whether fundamental or technical trading is right for you, don’t worry. The beauty of futures trading is that you don’t have to choose between the two. In fact, many traders integrate elements of both styles into their strategic approach to the marketplace.

For more information on how to get involved in the markets, schedule a conversation with a Daniels Trading futures trading broker. No matter your walk of life or aptitude, a simple 1-on-1 dialogue with a seasoned professional is great way to begin your venture into the marketplace.

Ready to think like a technical trader? Download our free guide to learn how to identify chart formations and take action when the time is right.

Filed Under: Futures 101, Uncategorized

About Daniels Trading

Daniels Trading is division of StoneX Financial Inc. located in the heart of Chicago’s financial district. Established by renowned commodity trader Andy Daniels in 1995, Daniels Trading was built on a culture of trust committed to a mission of Independence, Objectivity and Reliability.

Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

© 2023 StoneX Group Inc. All Rights Reserved

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Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

© 2023 StoneX Group Inc. All Rights Reserved

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