The path toward becoming a better trader is usually a path toward wholeness, and no two paths are identical. Each of us has to begin where we are in our own life situation. No matter what your path, you must first determine where you are. What are the patterns in your life that block you in your trading, your relationships, etc.? Those patterns can be available to you right now because they show up in your trading and in every other aspect of your life as well. Unfortunately, in most cases, people are not aware of them. Thus, the transformation journey often begins with a crisis. For it is only when an obvious crisis begins that we wake up to the fact that something is wrong in our lives.
This article, the first in a series, on individual differences or personalities is to help people determine where they are. Jack Schwagger has suggested from his experience interviewing “market wizards” that the most important element of successful trading is having a trading system that fits your personality. As a result, I’m going to base this article on the fact that knowing your personality type is important to finding out where you are in your journey toward wholeness.
The importance of personality traits comes into play because they provide a quick mirror of where we are and the neglected parts of yourself that you must nourish. For example, all of the personality traits that we are going to examine in this series come in pairs. If your personality tends to be extraverted, it simply means that you tend to focus your energy more externally than internally. Wholeness for you may mean moving more toward an internal focus (e.g., determining how you produce your results by your thinking) until you achieve a balance between focusing on the internal and the external.
Understanding Your Personality Type
If you’ve taken the Investment Psychology Inventory, you probably received a much more comprehensive personality profile based on the four dimensions of personality developed by Carl Jung. These include introversion/extraversion, intuition/sensing, thinking/feeling, and perceiver/judger. When you evaluate someone along four dimensions, you arrive at 16 personality types instead of four. This is similar to the well-known Myers-Briggs profile.
If you haven’t taken the Investment Psychology Inventory, you have two choices. Take the profile and find your personality type and determine your strengths and weaknesses for trading. Or, as a second solution, you can got to the following web site to get a basic Myer-Briggs type test for free: http://www.humanmetrics.com/cgi-win/JTypes2.asp. When you get your type, look it up on www.google.com. The sites you find will tell you a lot about yourself. And in this eight part series, we’ll tell you how your type relates to trading.
Three personality types—the ENTJ (known for their ability to develop strategies), the INTJ (known for their scientific reasoning), and the ISTJ (the trustee type person)—combined should constitute about 12% of the population. However, at this time these three groups represent 50.1% of our current sample. The NTs constitute 45.6% of our sample, probably because these people are always attempting to improve themselves.
Given these interesting developments, we can discuss the four Jungian elements of personality, and how they combine to form cognitive processing modes and temperaments. We can also discuss how these modes and temperaments are related to trading success.
Most of us give little thought to how we process and perceive information in order to make sense out of what is happening. Yet dramatic differences occur in how people perceive and interpret what goes on around them. And these differences lead to dramatic contrasts in behavior and personality.
The next step in this series on personality type and trading we will examine the four dimensions of personality developed by Carl Jung and how each of them might influence you as a trader.
Van Tharp Personality Type
What Type of Trader Are You? Take 3-5 minutes to find out http://www.tharptradertest.com
Trading Mentor Dr. Van K Tharp answers the questions what does it take for someone to become a good trader?