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Choosing A Trading Approach That Fits The Trader’s Psyche


Due to financial and technological innovation and globalisation, there have been numerous additions to the Australian trading world. However, traders employ the strategies and trading styles that match their goals, risk appetite, knowledge, beliefs and values. Therefore, what might work for one might not work for another. For example, a trader who follows the system might find it challenging to adapt to a reversal trade and vice-versa. Therefore, traders must explore different trading styles and assets to find the one that matches their personality. Metatrader Australia is a platform that suits the trading style and strategies of all traders.

The Australian Securities and Investments Commission commits to maintaining trade integrity, efficiency and fair trade in the Australian financial markets. It is responsible for authorising, clearing and settling licensed markets and trade repositories. With the technological advances, trading has seen an increase in its capacity, speed, sophistication and automation among market operators and traders. It has opened doors for new markets to adhere to their trading strategies, length, time frame, analysis technique and asset class.

Depending on the Time Frame

Swing Trading

It is a trading style where traders take advantage of highly liquid stocks and their price swings in the short term. They utilise strategies that benefit short term trading, like fading a rally to reverting to the median, which could last for a day, a few days or a few weeks. It requires traders to have a high-risk appetite and skilful experience in understanding market trends.

Positional Trading

Relative to swing trading, positional trading has more extended trade that can last from weeks to months or even years. It is closer to a long-term investment than a short-term trade. The traders depend on the increase in the probability of success from day one. As the general market trend goes upwards in the long term, positional traders successfully gain a decent profit for their investment.

Day Trading

It is one of the shortest forms of trade in the market today, where traders buy and sell a financial asset within the day or even multiple times during the day. They take advantage of the small price movements that occur during the day and ensure that all the positions are closed before the end of the trading day. Intraday trading allows traders to leverage from the price spikes in a short duration, enabling them to make more profits than the average. However, this leverage can affect their long-term gain, leading to more losses over a long period. Scalping is a strategy that comes within day trading where traders prioritise making large volumes of small profits in a short period. Positional and day traders can use Metatrader Australia to optimise the trading experience, which requires them to take quick actions.

Depending on Analysis Techniques

Fundamental Trading

It is a trade that works on fundamental analysis where traders examine the anticipated or actual corporate earning reports, reorganisations, acquisitions, or stock splits. It is the best fit for traders who aim for long term trades to avoid short term fluctuations in prices.

Technical Trading

Traders who prefer following graphs and charts to monitor the movement of stocks and indices for signs of divergence or convergence prefer technical trading. These shifts indicate signals to buy or sell assets. It relies purely on technical analysis of the price action as shown by the asset class. Techno-fundamental trading involves both analysis techniques where the trader shortlists some stocks and strategically plans the entry and exit levels. On average, the daily turnover of the Australian Securities Exchange is AUD 4.685 billion, with a market capitalisation of AUD 1.6 trillion.

Author: Alison Lurie

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