What Type of Trader Are You? Long bias vs Short bias

The next chapter in my occasional series about what type of trader are you focuses on the longs vs the shorts.  Are you predominately a Bull or a Bear?

Have you reviewed your trading records to determine any bias in your trade selection to either the long or the short side?

Some people just can not face going short whether it be a stock, commodity or currency.  Psychologically then can only take long trades.  They have a limiting belief about selling something to buy it back cheaper that screws with their mind.  There are even charting packages that allow traders to invert their charts in order for them to see bearish charts as possible long set-ups.

On the other hand there are people who have a bias towards shorting an instrument.  I admit to being one of those, and my records back this up. I tend to take 1/3rd longs to 2/3rd shorts in my trading.  There is the old adage that instruments tend to drop 3 times as fast as something climbs and there may well be some truth to that. 

On a personal basis I wonder whether I’m influenced by my experience of flying and missiles, I like to watch a currency move north until it runs out of energy, stalls out, rolls over and prepares to let gravity take its toll as it dives for the deck.  That’s when I’m ready to pounce and look to short that market.  It’s interesting to think that other experiences in my life maybe colouring my trading decisions.

Ultimately the market will do its thing and will spend sometime in a bullish phase and sometime in a bearish phase….if you have a bias and are in phase with the market then the rewards are plentiful.  But if for example you’re a short biased trader in a bullish market then you’re likely to be suffering death by a thousand cuts as you try to counter trend the market.

So have you reviewed your trading records to determine any bias in your trade selection to either the long or the short side? Could that bias be helping or hindering your trading?  I’d be interested to hear of our readers experiences.

Trade well

FXTrader Paul