Each one of us has a distinct personality. We’re all unique, but we all share some common characteristics. Some of these personality characteristics help us to be better traders, whereas others can be our downfall. It’s important to take stock of your personality characteristics before you embark on a career as a Forex trader – and learn to manage the bad ones or stay out of Forex altogether.
The World According to Tharp
Dr. Van K. Tharp is a leading training coach, and also happens to be a qualified psychologist. He’s come up with a list of 15 different personality types that traders have. The list is interesting because he ties it back to how well-suited you are to be a Forex trader. You can find more details on his website, but you probably recognize yourself in one of the following 15 personality types: accurate, administrative, artistic, adventurous, detailed, facilitative, fun-loving, independent, planning, socially responsible, spontaneous, strategic, supportive and values driven.
What makes a great trader?
Tharp says that there are three key characteristics that great traders seem to share:
- The ability to understand the big picture, connect the dots and zero in on trading opportunities.
- The ability to trade logically and analyze the market to make trading decisions.
- Being disciplined, decisive and able to take things one step at a time.
Some of those 15 trader types have one or more of these characteristics. The more characteristics a type of trader has, the most likely they are to succeed.
Top scoring personality types
Out of those 15 types, only two have all three characteristics – the planning trader and the strategic trader. If you are either of these, then you have the greatest chance of succeeding as a forex trader. Not only are you good at identifying opportunities, but you have enough discipline and mental flexibility to prosper.
Personality types that may succeed
Most personality types fall into that middle band, with one or two good characteristics. We won’t list them all here, but if you’re not a top scoring personality or one that finds trading challenging – more on that in a minute – then you’re in this group. If that’s the case, then all is not lost. Take a good, honest inventory of your personality, and identify where you fall short of those three ideal characteristics. Then, work on those missing attributes, and pay attention particularly to how this manifests when you trade. If you work on modifying the way that you respond, then you may have a good chance of becoming a successful trader.
Personality types that may find trading hard
Now for the bad news. If you are artistic, fun-loving or supporting, then you need to think long and hard before you become a forex trader. You may be better to let others trade on your behalf. If you do decide to become a trader, then you will have to really focus on changing your behaviors and be prepared for a long road. It’s also a good idea to get regular feedback, so that you can see yourself as others see you.