The 5 Most Important Trading Style Types, Explained

Trading is not always easy. There is not even a single way to do it, so sometimes you have to know which style to choose.

To make it a little easier, let's review the most important types of trading styles to be able to observe the qualities of each of them, the advantages they offer for certain situations and therefore which is the most optimal depending on the scenario in which we are.

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Characteristics of the negotiation

In order to talk about the types of negotiating style, it is convenient that we first try to delve into this issue in order to clarify the basic concepts that concern us. Negotiation is an act of interaction between two or more individuals or entities in which each party tries to obtain the best conditions for themselves or for the group they represent..

The interactions that underlie a negotiation can be simple or tremendously complex. Each person involved has their own idiosyncrasies, lives in a specific context, has very particular needs and experiences specific emotions in relation to the matter that concerns them. Therefore, the psychological question will be very relevant, as we will see when reviewing the types of trading style.

It must be borne in mind that another fundamental characteristic of any negotiation is that part of the principle that each party involved must see his demands satisfied, partially, because no one can obtain the total of what he asked for, because that would mean that someone else would be losing everything. On the contrary, everyone will have to give in, even if only partially.

As for the benefits we were talking about, it is worth distinguishing between real needs and mere desires. Similarly, even if a party involved in a negotiation (using one of the types of negotiating style that we will see) a certain benefit has been established as a goal, it will not mean that this necessarily is the result final. As we have already mentioned, the usual thing is to make transfers.

Another of the key issues to understand the negotiation is that the fact of finally reaching an agreement or not, does not define this interaction. In other words, two or more parties can negotiate on a certain issue, and finally not understand each other, so no deal will be closed. But, even so, what has taken place has been a full-fledged negotiation, only it has not concluded in any agreement.

The different types of trading style

Now that we have been able to discover what the act of negotiating involves, we can go on to review the main types of negotiating style and so on. Appreciate the qualities of each one of them and of course the usefulness they offer depending on the situation in which the negotiating parties find themselves. find. Let's see them carefully.

1. Flexible trading style

The first of the types of negotiating style that we can find is the flexible one. This style is characterized by a predisposition to try to reach an agreement quickly, so that actors involved will not dwell too much on the details or delve into the issue at hand. occupies. They will only try to reach a reasonable agreement in the shortest possible time.

This type of negotiation style is common when the parties are faced with an isolated problem, for which everyone wants a quick solution. Therefore, they will tend to reach agreements that guarantee the satisfaction to a greater or lesser extent of all those affected. Justice and balance will be the prevailing principles when negotiating.

This way of trading it is especially useful when an entity is facing a problem that may cause it to lose a customer, for example. In that case, it is best to reasonably compromise and in return maintain the business relationship with that person or organization.

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2. competitive negotiating style

But when we talk about types of negotiation style, one that quickly comes to mind is the one that corresponds to the competitive one. Contrary to the previous case, when the negotiating parties adopt a competitive style, they will try to defend their positions in a much more aggressive way, and therefore their objective will be to yield as little as possible in the demands made.

Obviously, in order to use the competitive style, you must have a position of strength that supports this attitude. If this were not the case, it would be difficult for the other party to end up giving in to the proposals put forward, which they generally tend to be very unbalanced, because of how beneficial they are for the competitive part and not so much for the other part.

It is important to note that an aggressive negotiation carried out by the competitive style, must also take place within a framework of respect. Aggressiveness is shown in the demands made, but not in the tone used during the interaction, which, if we want it to be successful, must always be cordial.

3. Collaborative Negotiation Style

Another of the most important types of negotiation style is undoubtedly the collaborative one. This is the classic style that should be used when the people or parties negotiating have common interests or projects. Therefore, they know that everyone must do their part to reach the most favorable agreement for the common good, since that is the way in which everyone will benefit.

This way of acting is indicated, for example, for organizations that have been in a sector for a short time and therefore both want to take advantage of a certain symbiosis to mutually benefit and thus grow and achieve a more relevant. We can already see how the types of negotiation style have very different qualities and advantages, so we must wisely choose the most appropriate for each occasion.

4. avoidant negotiation style

But those are not the only possible trading style types. Another option would be the avoidance type. This is a special mode characterized by a relationship of conflict between the actors. For this reason, they may not wish to maintain the link and thus avoid the negotiation. This complicated situation may require the presence of a third party, alien to the interests of both, to mediate the interaction.

In this type of negotiation we can observe the discrepancy between the style, which is avoidance, and interest, because in reality you do want to obtain a benefit, but you do not want to interact. These conditions can make the process difficult and take longer than those involved would like. An example of this scenario can be a judicial process, in which it is the judge himself who rules on the benefits that each party involved obtains.

5. Accommodative negotiating style

The fifth and last of the types of negotiation style that we are going to study in this compilation is the accommodative one. It is a very peculiar way of negotiating, whose style would be the opposite of the competitive one, which we had seen previously. In this case, the party that opts for this style, not only is he not going to defend his position in an iron way, but he is going to try to satisfy the other party, as far as possible.

Indeed, what he will try to do is to accommodate his interlocutor, and make him especially benefit from the agreement adopted. But why would a negotiator act that way? Because in some way, it would also benefit. Normally, this benefit is obtained by achieving a long-term business relationship.

Therefore, sometimes it pays to "let yourself lose", knowing that in return it is very likely that we will win, and a lot, in the future. It is still an investment, in which the invested capital is what has not been earned in that first negotiation, and the Potential benefits are all the satisfactory agreements that can be reached in the future, if that good relationship with the company is maintained. other part.

This is a common way of negotiating in many commercial and supplier departments. This is the tactic of offering very interesting discounts on the first transactions, and thus gain customer loyalty that can become habitual and therefore generate important benefits in the long run.

In any case, we must know which is the best type of negotiation style that we can use at all times, since we have already seen that the interests that we have as well as the scenario in which we find ourselves, can make one or the other the most indicated in each moment.

Bibliographic references:

• Fatima, S.S., Wooldridge, M., Jennings, N.R. (2001). Optimal negotiation strategies for agents with incomplete information. International Workshop on Agent Theories, Architectures, and Languages. Springer.
• Ganesan, S. (1993). Negotiation strategies and the nature of channel relationships. Journal of marketing research, 1993.
• Lanche, E., Michelle, R. (2016). Analysis of the types of negotiation and their impact on decision-making with like-minded and non-like-minded people.
• Matos, N., Sierra, C., Jennings, N.R. (1998). Determining successful negotiation strategies: An evolutionary approach. Proceedings International Conference on Multi Agent Systems.