Not only is the Forex is full of possibilities in terms of strategies, it also has its share of traders with unique and sometimes animal-like personalities.
While these wild animals may only seem amusing at the start, once you get a few trades under your belt and start gaining experience, you might see start to encounter them more often than you expected. In fact, you’ll probably end up acting just like them them at one point or another, whether you realize it or not.
Here are the 5 most animals you’ll most likely encounter and the traders they represent on the Forex.
You’ll know its a bear when you see traders bracing themselves for a drop in the market. By setting up short positions, they are betting on a currency to depreciate and undergo a sharp downward trend in the coming days and weeks. The mindset of a bearish trader is dominated by pessimism which drives them to find a partner for a currency that is likely to benefit from another’s fall.
Opposite to the bears are the bulls, who can be often be seen roaring to get into the market with high levels of optimism. The outlook of bullish traders is that a currency is about to rise for considerable amount of time and, as a result, they are looking for ways to ride that upward movement by taking up long positions.
Pigs are something you should aim to avoid since their behavior is marked by greed and impulsiveness. Instead of sticking to the plan, they tend to hold on to a winning position for too long a time until they eventually lose any profits they would have had. While such a tactic could be successful in earning more in the short term, pigs will eventually see themselves lose due to the amount of risk they are rushing in to.
Speaking of risks, don’t be a chicken that’s too hesitant to enter a position. You may be eliminating the possibility of losing, but you are also closing yourself off from profits. Risks can be properly handled and prepared for, but only if you are willing to actually get into the market.
As another risk-averse trader, the tendency of sheeps is to stick to what they know or to what their fellow traders are doing. By following the majority or sticking to a single plan for too long, you are limiting yourself in terms of the possibilities and strategies that could turn out to be more profitable.
Don’t worry though, while staying in one form for an extended period of time could be damaging, constantly transforming to whichever is the most appropriate can be beneficial.