Sheep, Pigs, Cheetahs and Lions: The Four Personalities of Traders Which one are you while you're day-trading, trading futures, binary options or other instruments? Part 5 of a 5 Part Series

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If you have followed along in this five part series, you have learned about the trading personalities of the sheep, the pig, the cheetah and now, in this final part of this five part series, the lion. What do you want to be? You want to be the lion. The lion is patient. They’re truly a good trader and therefore profitable. The fourth and final trading animal mentality, the lion analyzes the market, looks at volume, considers the expected ranges, knows where the deviation levels are, and they’re aware of the news. Even if they don’t trade the news, they’re aware of it and how it could affect the trading and factor it in for the day. They have a full view of what’s going on. They understand not only the ABCs of a system, but they understand the 123s of how to read a market. They understand the whys of a system. For example, they understand why an entry exists, and can consider if it’s still a good entry, based on the volume they see, and where the market is, in relation to the deviation levels. They don’t have to be spoon fed on how to accomplish a trade. They can see multiple ways to execute a trade in a market and get the profit results they want because they know multiple plays. They wait for the trades to come to them, they don’t chase them. They’re not as fast as a cheetah. They’re pretty fast, but not nearly as fast as a Cheetah. They wait for the poor little gazelle that gets off on its own and then they strike; that’s their setup. They don’t go after four big adult gazelles at the same time and then lose them all.

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Lions have excellent risk management. If they do have to risk too much money, they understand that they are risking more than they should, but that’s what they have. They have a healthy mentality and know that it is risk capital. As that capital grows, they don’t increase their risk. Their whole goal is to risk as little as possible so they can build up that capital to where it needs to be before they grow their trading size. They are methodical. They master a few systems, not dozens, so they can handle various market conditions. Their first goal is to learn how to trade one market in multiple market conditions. Only then will they add on a few other instruments. They will master that market before they move on to the next. They wait to strike until the time is right and when it’s right, they do not hesitate to execute and enter. When there is an entry they take it with muscle memory, not thinking about it like a sheep, not jumping in early like the pig thinking it might be a winner, not seeing how things go and change it up a little like a cheetah.

They don’t take on more than they can chew. Lions go for the animal they know they can take down. They have a plan of attack. They’re not just blindly jumping out to see what they can get like a pig would when trading a binary, without even looking at a chart, choosing it only based on price. The price looked good, so the pig personality would take it. It might win once or twice, but over the long run, the pig is going to lose with that strategy and the lion knows it.

A lion’s chart may look sort of cluttered, but there is a big difference between a sheep, who has a thousand things on their chart, and a lion that may look like they have a cluttered chart. The lion may have a lot on their chart but they can explain everything on it. The lion can see the clarity in the midst of what is going on in the chart. It will make sense, and they can define everything so well they could go and teach it to someone else. They understand the impact behind every indicator and item, so they know why it works, and everything on their chart will have and serve a purpose. The lion will know the trading theory on why their bar and indicator choices work. A lion will tweak their system but not do it out of fear or reaction to a loss. They’ll do it to improve it. They’re trying to improve a system to make it a percentage better, even when they are already doing well with it, not because they’re trying to fix it. Lions understand they may have a bad trade or bad day or even a bad week, and won’t try to rework their entire system because of it. They have good risk management and can cope through the bad trades. They’re very good at self-analysis, asking if there was anything they did wrong. They also ask questions like: “How can I make sure it’s not repeated?” “What can be improved upon it?” If they don’t know the answer, they’ll research it and find out how. What did they do right so they make sure they do repeat it? They make sure they do that self-analysis on every trade. They may not do it right then on a specific trade, but may do it at the end of the day so they don’t miss out on trades. They’ll write down some quick notes, then come back to it. They’ll take screenshots, and they’ll keep a thorough trading journal. Those are the characteristics of a lion.

Reality is all traders are all sheep, pigs, cheetahs and lions, hopefully more of the time lions, and sometimes, cheetahs now and then. Cheetahs do well. They go back and forth. They’re kind of second place in the tournament and they can be adjusted easily to become a lion. It’s important that you understand where you’re at on any given day, in order that you don’t get so far off track that you lose the ability to be a lion. If that happens, you’ll start tweaking systems and blaming them. You do want to learn a system, and you want to improve a system, and if a system is broken, you shouldn't trade it. But if you don’t do the self-analysis, you won’t know if it’s you or the system that’s falling short, or what specifically in the system that’s falling short. It’s necessary to know it’s not you before you try to change a system. You can be the different trading animal personalities at different times. You can become really good at recognizing the animal trading traits you are acting on, rating yourself on trades and on days how you traded. Be painfully honest with yourself. That’s the only way you are going to improve, not an overestimation or underestimation. Never stop learning. Think about the next twelve months, not just the next twelve days when you are trading. Keeping those things in mind will set your path for successful trading.

If you want to learn more about the four personalities of a trader, go to www.apexinvesting.com, a service provided by Darrell Martin. Apex Investing Institute offers free education, and free access to the Nadex Binary and Spread Scanner Analyzers. Member traders are invited to trade in the rooms, take advantage of trade signal services, have key indicators and access the Apex Forum. The forum content is updated daily and includes over 7000 members. In a supportive learning community of seasoned as well as up and coming traders, traders of all levels learn how to trade Nadex binaries and spreads in depth, as well as futures, Forex, stock and options, and gain an edge for successful trading overall.

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