What’s in a Name – Part 1 – The Types of Traders
What’s in a name? A name is supposed to bear a person or an entity’s character. This is the reason why names are carefully chosen so they could stand out from the crowd, to make one unique, and survive as a brand.
I was doing a Google Search on “The Responsible Trader” to find out if I was already able to overshadow the one who copied me.
To my surprise, I found out that there is a topic on “Socially Responsible Trader” and I thought the description fits me well. I would like to share with you what I read:
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The Socially Responsible Trader
(http://fxdialogue.com/en/forex-course/psychology-of-a-successful-trader/the-socially-responsible-trader/131)
The next psychological profile in Van K. Tharp’s series on trader personality types is the Socially Responsible Trader.
This trader type would suggest an individual whose focus is primarily on the values and people that are important to them. They also tend to favor having a life outside of the trading arena that is congruent with their values.
Van K. Tharp’s series of psychological trader profiles consists of fifteen trader types of which ten of them are most suitable for successful trading. The latter group includes the Socially Responsible Trader.
Socially Responsible Trader Qualities
The Socially Responsible Trader has a loyalty to their values and on how these relate to themselves and others with whom they interact. In the world of trading, this quality may be a hindrance because the market does not have a social conscience and generally does not take prisoners. Want to learn how to get started in pivot point trading or forex? This will maximize your profits and reduce your loss.
While this type of trader has the ability to achieve success, it will generally come as a result of the trader finding opportunities in keeping with their values and not due to their logical evaluation of a trading opportunity or system.
Trading Strengths
The Socially Responsible Trader will generally go by their gut feeling when trading and will only take trades which “feel right” to them.
This tendency can be an asset when managed with appropriate risk control parameters in place.
Trading Challenges
As mentioned in the previous section, the Socially Responsible Trader will tend to wait and act upon their “gut feeling”. This response may not always be accurate and can present both a challenge as well as an asset to this trader type.
In addition, this type of trader usually needs to be able to evaluate and implement an objective trading system in order to overcome their potentially counterproductive “seat of the pants” trading tendencies.”
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I became curious and did a search on Dr. Van Tharp’s Trader Personality Test and Types and this is what I read:
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“Dr. Van Tharp’s Trader Personality Test and Types
by Jennifer Gorton
Few professionals have dedicated as much time and study in the field of trader psychology as Dr. Van K. Tharp who bases his research on observing over 5,000 traders.
During his time coaching and aiding many professional traders, Dr. Tharp has developed a system of typing most of the common trader personalities.
This personality typing can be very useful to novice and seasoned traders alike, allowing them to avoid the different pitfalls that their particular personality type might be prone to.
The Trader Personality Test Developed by Dr. Tharp
Dr. Tharp offers his trader personality test free of charge to those who are interested in taking it online through a link featured on the official Van Tharp Institute website.
This personality test does not really consist of assessing trading or trading knowledge per se, but it is instead based on the way that different people react to various events and situations.
The trader’s response to these situations would in turn tend to determine the way that they might behave in a trading situation as they operate in the forex or any other financial market.
Once the test responses are entered, the resulting personality type is calculated using Dr. Tharp’s online program to determine which of the fifteen trader personality types the person taking the test would fall into.
The purpose behind traders or would be traders taking this test is that their personality type can be a strong determinant in their overall trading success in terms of whether they are ultimately profitable or unprofitable.
Furthermore, going through this valuable process can help the test taker to assess their psychological suitability for participating in the trading arena.
The Fifteen Trader Personality Types
As mentioned above, Dr. Tharp has divided traders into fifteen different personality types that include the following:
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
Each one of the above fifteen trader personality types conforms to a particular trading psychology profile, and they can be assessed using the Tharp Trader Test.
Furthermore, the different strengths and weaknesses of each personality type can then be studied in greater detail through Dr. Tharp’s writings and website dedicated to the subject.
Characteristics That Help Make a Successful Trader
Through his research, Dr. Tharp has identified the three principal psychological elements shared by all great traders.
These elements consist of the following general personality characteristics:
1.The ability to see and understand the “big picture”, to be able to connect events and to recognize trading opportunities.
2.The capacity to use logic in their market analysis to base their trading decisions on.
3.The tendency to be decisive, orderly and able to conduct operations in sequence
A trader’s potential for success can then be assessed depending on how many of these characteristics a trader has or is willing to develop.
Some types of traders — like the Planning and Strategic Traders — show greater initial trading success potential. Nevertheless, other types like the Artistic, Fun Loving and Supportive Traders may be better off letting others manage their money unless they are prepared to perform considerable work on themselves.”
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One thing led to another, and I took Dr. Van Tharp’s test myself and here’s my result:
This description fits me better. So I think the most appropriate name for me is The Planning Responsible Trader not The Socially Responsible Trader that I thought I was.
Just for fun. You may want to take the same test. It is free. You can take it here:
Good luck on all your trades.