Discover Your Trading Personality Today
Stagnation is the death knell for any truly successful and lucrative career in forex trading and if you truly want to make it in the trading world, you’ll need to make sure that you’re constantly growing and evolving, both as a trader and as a human being.
Trading performance is intrinsically linked with your emotions, your characteristics, your personal attributes… and making these a top priority as an integral part of your overall trading strategy will really serve you well as time goes on.
Remaining open-minded and flexible is absolutely key, as you may find that you have some characteristics that simply aren’t well suited to a life as a forex trader. But once you’re armed with all the information you need, you can start to think about how you can make improvements on a personal level to help support your trading.
So… where to begin?
The first step is to identify your particular set of personal characteristics so you can see where your strengths and weaknesses lie. Luckily, there is help at hand in this regard and if you head over to the Van Tharp Institute website, you’ll find a personality test to take that will help you see where you fit in among 15 different profiles.
Dr Van Tharp himself is a professional psychologist and trader coach, who’s written a library of books on trading psychology and personality. As resources go, his back catalogue could prove to be particularly enlightening reading if you do want to delve even further into the topic.
The 15 different trader personality types are:
- The Accurate Trader
- The Administrative Trader
- The Artistic Trader
- The Adventurous Trader
- The Detailed Trader
- The Facilitative Trader
- The Fun Loving Trader
- The Independent Trader
- The Innovative Trader
- The Planning Trader
- The Socially Responsible Trader
- The Spontaneous Trader
- The Strategic Trader
- The Supportive Trader
- The Values Driven Trader
Over the last few blog posts, we’ve been looking closer at each of these profiles so you can start to build up an idea of where you might fit in and what this could potentially mean for your career.
It’s possible that you’ll identify with one or more of the profiles, so don’t worry if you do find a bit of overlap. The idea is simply to find out what’s most applicable to you so you can start to evaluate your decision-making on a deeper level, making changes to your trading plan as and when necessary.
In this blog, we’ll be looking at the Planning Trader, the Socially Responsible Trader and the Spontaneous Trader. Where do you think you’ll fit in?
First of all, congratulations if you took the test and you’ve found out that you’re a Planning Trader!
This means that you have all three top core qualities that Dr Van Tharp has identified as helping to make top traders… you’re able to see the bigger picture, you’re decisive, orderly and operate sequentially, and you make decisions based on logic and analysis.
As an individual, you’re probably decisive and perform well in leadership roles, happy to step in as and when circumstances dictate. You can develop trading systems quickly that suit your specific needs at different times and can implement them just as quickly.
You’re also very capable of spotting logical inefficiencies in the market, taking advantage of them as they pop up.
Another particular strength you’re likely to have is your ability to plan in advance, keeping both short and long-term goals at the forefront of your mind.
As Dr Van Tharp says, if you apply yourself properly and develop a solid plan for trading, while doing the work to gain a deeper understanding of what constitutes success, you have the potential to be very successful! So that’s great news!
No one is perfect, however, and it’s important to remember that you’re sure to have some weak areas that you could benefit from concentrating on. Arrogance has no place in forex trading, after all – and you should always make sure you’re open to self-improvement, no matter how seasoned you are as a trader.
One potential pitfall to be vigilant of is the loss trap. You may find that you’re so driven by your desire to be right about your trades that you start failing to honour your stops… so keep an eye out for this.
While, as a Socially Responsible Trader, you’re not in quite such a good position as a Planning Trader, you do still have one of the top three core qualities that make a top-notch trader… you’re able to see the bigger picture and you’re good at making decisions. So that’s a great start!
However, although this is undeniably good news, something you would be wise to be on your guard for is what’s actually driving your decisions. Is it your emotions or is it analysis and logic?
Emotions can really hinder trading success and it’s important to do all you can to keep them under control, good and bad. But the more you delve into your personality type, the more you’ll see areas to improve upon and find strategies to help you master your emotions, keeping you on track.
In terms of other characteristics, Socially Responsible Traders are typically motivated by their values and what feels right. You’re also able to commit to a clear trading plan and are able to stick to it, even when faced with serious challenges.
With a bit of focus and attention, you may also find that you’re able to identify multiple different systems and blend them together to help drive you towards achieving your trading goals.
As for obstacles that may well crop up, keep an eye out for the loss trap, as you probably hate being wrong… and you may want to prove your trading strategy is right at all costs!
Again, you’re off to a great start if you’ve discovered that you’re a Spontaneous Trader… you can grasp the bigger picture and you’re able to make connections between events quickly, so you’re able to act sooner rather than later.
This is a great quality for a trader to have, but you may find that you become so engrossed in looking for possibilities that you forget to come up with a strong trading plan, one that will guide you on the road to achieving your vision.
Another potential problem that this type of trader may encounter is taking on too much risk without the proper preparation to back it up. Dr Van Tharp advises you to look into the concept of position sizing and what this means before you start to trade.
Distraction is also something you might want to be on your guard against. You may find yourself tempted away from following your trading plan by something new and exciting, even if your strategy is working well.
Always remember that you carried out all that analysis and research for a reason and your plan was devised with that in mind, so deviation without proper preparation could spell disaster if you’re not careful.
However, what’s particularly great about Spontaneous Traders is that they have no trouble whatsoever viewing trading like a business… and as long as they have a solid plan in place, there’s no reason at all why they shouldn’t be able to enjoy a long and lucrative career in forex trading.
That being said, just make sure you maintain a good work-life balance as well, while keeping an eye on your stress levels and ensuring that your emotions are kept in check.
So… now you’ve read all that, where do you think you fit in? Of course, you may not identify as any of these three personality types, so make sure you check back over our past blogs to see if any of the other profiles sound more like you.
The idea is that once you have an idea of some of the issues that could potentially have an impact on your trading, you can then take steps to enact meaningful change and drive self-improvement and self-awareness.
When it comes to trading performance, you’re the most important factor – and knowing what your strengths and weaknesses are can make a huge difference to how well you do.
So if you are starting to wonder how best to up your game in the future, perhaps begin by taking the personality test and go from there. Who knows where you could end up?
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