Thought of the week : What kind of Trader are you ???

Here's something I want to share about trader. It's not about the trader's technique, indicator, or edge. It's more about the goal of the trader, aka: the profit. Two traders may have the same technique, same indicator, same entry, but very different outcome. Here's my thought about it:

1. Daily wage trader
This type of trader prefer a consistent result, high winning ratio, and feel
happy for mediocre result. This kind of trader rarely let the profit run, and
accumulate small gain day after day. They don't like a losing day, even for a
healthy losses. They like to play safe, and greed is their worst enemy.

Characteristic :
a. Enough is enough. They have a daily goal for fixed amount of dollar. They're not clinging to market to become millionaire in one night. Trading is for making money.
b. High Winning Ratio. The win rate is very high, more than 80% per day. Why? Because they close their trade after booked their dollar target for the day. They are not looking for extra money, tempted to overtrade. No Regret for losing opportunity. Their only regret is having a losing day.
c. Consistent. Accumulated small gain is their objective. Consistency is their number one objective. They are rather have a 100% winning ratio and 10% account growth than 50% winning ratio and 20% account growth. They use the trading like a work, paid every day. They get frustrated if they have to pay back for their work.
d. Cut your losses, and cut your profit even shorter. If they get a sudden move to their objective they will take profit and have a nice day, even that's only 1 min entry.
e. Typically this kind of trader will be (no offense): female who love stability, comfort, and doesn't like adrenaline rush.

What have to be concerned:
A losing streak is a nightmare for this type of trader. Perfectionist is their motto. They prefer have two green daily profit at $10 rather than one red -$10 one green +$25.
If they have a losing streak, and after taking their stop loss the market go to their direction, they will become very frustated. One time, two time, and suddenly they break their stop loss and sometimes averaging down. This is the start of the disaster. One mistakes like this may costs 2 weeks of their small gain if not wiped out their profit/account. The very bad Risk Reward Ratio may harm their account in the long run also.

How to fix it:
There's nothing perfect in the market. Everybody take losses.Sometimes 3 to 4 losing streak. Nothing bad about it. The important thing is money management. Don't let the losses too big. Enhance your winning ratio a little bit. Make it minimum 2:1 winning ratio. It will make your winning ratio lower but in the long run you make profit.
Keep a journal : entry,exit,potential profit,potential losses,win vs profit ratio. Then you'll find out what you have to do next. And one more shout : GET OUT FROM THE COMFORT ZONE and TAKE LOSSES !!!

Summary :
Beginners sometimes fall to this category. They thought they are different from the others get rich quick scheme."Well I am different. I am not greedy."They want a holy grail for their trading method. Small winning is okay, unless there's no losses. If there's one, then the market will stopped moving. Market moves because there's wrong and right decisions. If everybody right, then who'll buy/short your position?

I was once become this kind of trader. My winning ratio incredibly high. 87% with 14 streak winning day, and I lost 50% of my monthly profit in one day losses.
Now I am shifting to taking small losses. My previous showed with 20% winning ratio you may still make a profit, thoughI am not encouraging that kind of trade.

That's it for now, Next Post about the Big Wave Trader. Coming soon...