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Feature Article :

Personality Type and Trading: (Part 7)
By Van K. Tharp, Ph.D. 

So far in our continuing series on Personality Type and Trading we have covered a lot of ground. We have examined all of the various aspects of the Myers-Briggs personality profile and elements of these profiles related to trading. Read the other issues if you missed them by linking here.

In our last leg of the discussion this week we will begin with the Four Temperaments:

Psychologists David Keirsey and Marilyn Bates believe that an important basis of personality are four key temperaments. Looking from a mythological stand point, these correspond to the characteristics that Zeus told his gods to help man adopt. Dionysus was to teach man joy. Prometheus was to give man science, while Epimetheus was to give man a sense of duty. And, finally, Apollo was to give man the spirit of the gods. 

Dionysian Temperament: The Dionysian Temperament occurs in those people for whom sensation (S) and Perception (P) are dominant. These SP people (ISTPs, ESTPs, ISFPs, and ESFPs) comprise about 38% of the population.

SPs tend to gravitate toward trading because they have a strong need for freedom and independence. They don't want obligations or to be tied down in any way. The ideal life is to do what he wants to do when he wants to do it. Action is the key for these people and they tend to be impulsive. Actually, they want to be impulsive because that gives them their free spirit and sense of aliveness.

People with this type of temperament work best in crises and they even will create a crisis just to make things more interesting. You can imagine what happens when this type of behavior is brought into the trading arena, and many SPs do so constantly.

The Myers-Brigg's personality types for which we have little data include all four SP categories. In fact, although SPs constitute 38% of the population, they only represent about 8.3% of our sample. Why? First, I suspect that SPs do not last long as traders and those that have enough money to last for a while are not that interested in self-knowledge, just the action of being in the market. Thus, SPs will tend to gravitate toward very short-term systems in which the odds are definitely against thembut they are still willing to take their chances because that's where the action is. In fact, the SP probably could not do well with a longer term orientation, because that would just not fit his impulsive nature.

People with SP temperaments are good with tools. Thus, I would expect them to have the potential to work well with computers and thus do fairly well in that aspect of trading.

Record how comfortable you feel with the SP temperament by circling the most appropriate number below.

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Although I do not recommend that one apply an SP temperament to trading, unless you want to forget about profits and just enjoy the action, the SP temperament is an excellent one to bring to many aspects of living. To develop more of this trait, I would suggest that you practice being much more spontaneous in what you do with your life. For example, pick one day each week in which you do everything just for the fun of doing it.

The Epimethean Temperament: The Epimethean Temperament occurs in people for whom the sensation (S) and judgement (J) qualities dominate. These SJs (ISFJs, ESFJs, ISTJs, and ESTJs) also constitute about 38% of the population. These people are dominated by a sense of duty. They exist primarily to be useful to the social units to which they belong.

Epimetheus was the husband of Pandora, who let all manner of ills escape onto mankind--old age, sickness, insanity, vice, and passion--when she opened her famous box. Yet Epimetheus, although forced to endure the result of his wife's actions, steadfastly stood by her and remained devoted to her. 

The SJ personality has a strong need to belong. But he must be the giver, not the receiver. He must earn his belongingness. As a result, I would not expect SJs to be that happy in the lonely world of trading unless they had a major social system for support (i.e., strong family support). However, the SJ might be quite content in an institutional trading situation.

However, the SJ personality is constantly seeking out what he is "supposed to do" to belong. They typically do well in school, because the rules are quite obvious. However, in the trading arena the "supposed to do" rules are not that obvious. In fact, if you ask enough people they will probably give you advicemost of which will be the exact opposite of what will produce trading success. Indeed, our sample of SJ traders produced below-average trading results. Nevertheless, the SJ usually has a very strong work ethic which could help him overcome a lot of difficulties.

The SJ will shine in one of the ten tasks of tradingmental rehearsal. Why? The SJ is likely to envision all sorts of disasters and constantly be trying to figure out how to overcome them. Indeed, his personal motto is usually to be prepared. Unfortunately, much of his idea of being prepared involves following traditions (i.e., the "I go by the book" motto) and this also may not breed success in the marketplace.

Record how comfortable you feel with the SJ temperament by circling the most appropriate number below.

1 2 3 4 5 6 7

To develop SJ skills, develop a total disaster control plan for your trading. Think of everything and everything that could go wrong in your trading. And, if your list does not include at least 100 items, then you need to continue until you have that many. Once you have your list, then come up with three ways to either circumvent each disaster or to overcome it if it does happen.

Next week we wrap up this series with the last two of the four temperaments: Promethean Apollonian

Safe Strategies Book Hits Amazon's Top 100 list!

Van's new book isn't even released yet and it's hit the Amazon.com Top 100 list! 

Don't miss out, pre-order your book now and get special bonuses. Be one of the first to receive the Safe Strategies book, by ordering through our Amazon.com special link and pay only $17.47. 

Van Tharp, Steve Sjuggerud, D.R. Barton, John Burley, Ken Long and other special contributors have banded together to make this our most exciting release yet! 

Learn more about the fundamentals of successful trading, read about new and exciting real estate strategies, and the six different market conditions and how to trade in each. This book is an excellent source on how to read the 'big picture' and thrive in any financial scenario. Safe Strategies focuses on showing you how to make your money work for you, rather than just working hard for your money--all for the special pre-released price of $17.47 on Amazon.com. Safe Strategies will hit bookstores in June. Read More....

Listening in....

Excerpts from Dr. Tharp's Discussion Forum

Peak Performance 101 
Author: Neal
Date: 04-03-04 08:34

I just returned from the Peak Performance class this past Monday night.

Before I went to the class I was pretty well set up. I have an excellent computer and proven software. I have a simple, decent trading methodology. I have read a ton of books and thought I was ready to win. But in the end my trading was going nowhere. I wasn't losing money but I wasn't really gaining either - more or less going $5000 up then $5000 down and churning up a bunch of commissions. I went to class hoping to get something that could take me to the next level. 

At the class we went thru some lecture time, but more class exercises and even games. Thru the exercises I was able to get rid of some negative emotions that have been sabotaging all aspects of my life, and I learned techniques to better control my emotional state while trading. Even more important for me and I was able to identify parts of myself that were nervous or even antagonistic towards succeeding in the markets. I was able to negotiate between these parts of myself, and set things up so that my whole mind was involved, concentrated, and excited about winning in the market.
Tuesday I came back and began putting the disciplines in my life to work (the child in me hates discipline). 10 tasks of trading, controlling mental state, full commitment to trades. The result? This past week I increased the value of my portfolio 16% actively day trading my system.

I was a little apprehensive about writing this, as it is only 4 trading days since I came back. I suppose it could be dismissed as a streak or dumb luck. But I know a sea change happened in my thinking. a 'paradigm shift' in how I am handling myself when I trade. Some might say that it was an up week, or that I had a few lucky hits. In reply I will say that big Friday was my worst day, that most of my trades are for a few hundred dollar wins on different stocks, and that each day was pretty consistent in results. But even more important for me, the nagging conflicts about trading and the screaming in my ear when trades go a bit against me are completely gone. Now that things in my head are better, I know I will see consistent results going forward.
Thank you Van.
To others -- if you can get to the course, you absolutely should.
Neal


Re: Peak Performance 101 
Author: Kevin
Date: 04-03-04 10:15

Neal,

Thanks for your comments. I was there at PP 101 with you last week, and it was a fantastic experience for me. 

I also needed to deal with some issues that have kept me from becoming consistently profitable (the churning, and getting nowhere that you mention), and am reviewing the class material, and putting action into place that will do just that.

As soon as my business plan and other trade management tools are in place, I will trade again, and know that what I have learned and internalized will help me achieve my goals.

Thanks again for your post.

Regards,

Kevin

Re: Peak Performance 101 
Author: Van Tharp 

Thanks Neal and Kevin for being there. It was a great workshop, as usual, and I'm glad you found it helpful.

Thanks, Van 

Read the full, unedited thread  by Activate linking here. Van K. Tharp and traders, investors and wealth builders around the world connect on this site, share ideas and learn from each other. Search specific topics 

Trading Tips:

Peak Performance Trading Tips

Don't Step on Your Head - Part 7
 

Models to Follow
by D. R. Barton, Jr. 

“Experience tells you what to do; confidence allows you to do it.”-- Stan Smith

“If you have no confidence in self, you are twice defeated in the race of life. With confidence, you have won even before you have started.”-- Marcus Garvey

We’ve spent the better part of two months talking about the pitfalls of over-analyzing our trades – a situation I’ve called “stepping on your head.”  I’ve certainly done this in my trading, and it leads to bad decision-making, often in the form of avoiding making any decisions at all.  We’ve also explored the alluring opposite of stepping on your head, which is oversimplification.  Oversimplifying complex systems tends to push us toward low quality decisions; the result of oversimplification over time is that we tend to get decisions that are not better than random.  Last week we looked at some ideas that can help us in our attempts to find a useful place in between these two extremes.  Today, let’s close out this series by looking at a trader who has found a great balance that works well for him.

I’ve known Brad Martin since 2000.  Brad spent 14 years as a floor trader at the CME and CBOT and now has been trading six years as an electronic day and swing trader.  I’ve had the opportunity to trade with and model Brad’s trading strategies over the last four years.  The fruits of our efforts have resulted in two really incredible workshops that we teach together.  Yet I digress. (But you can find more about the workshops below.)  Brad is the type of trader who almost never steps on his head.  I’ve never met another trader who acts with more confidence and ease at his decision points.  There are several good reasons for this, so let’s explore them a bit.

Brad knows exactly where he’ll get out if he’s wrong, before he ever enters a trade.  This may seem like a simple thing, but Brad has an unwavering sense of capital preservation and he uses strict risk control on every trade.  His dedication to preserving his capital is so ingrained that he never has to think or analyze anything at his decision points.  The decision was made before he entered the trade.  This absolute “get out point” is actually very liberating.  While Brad doesn’t like being on the wrong side of a trade, he knows that it’s part of his business and he does a great job of making his losses impersonal, neutral events.

Brad has a plan.  When Brad enters a trade, he knows exactly what factors will cause him to get out of a trade early, what things will tell him to stick around because the move could continue in his direction, and more importantly, what things are not going to influence him one way or the other.  One insightful workshop attendee told the group that the amazing thing about Brad’s trading style is not the indicators and factors that he looks at, but rather all of the things that he chooses to completely ignore!  Brad knows the factors that give him an edge; he pays close attention to them, and doesn’t let outside distractions influence him.

Brad has confidence that comes from knowing his strategies work.  For many people, this seems like a simplistic statement.  But I believe that most people who struggle with their trading do so because they don’t believe 100 percent in what they’re doing.  Brad makes decisions look easy, because they are easy for him.  Tiger Woods consistently drains tough putts in pressure situations because he’s done it before.  He has a mental and physical routine that works and is proven.  The same can be said for Brad’s trading.  Tiger doesn’t sink every putt, and Brad doesn’t make money on every trade.  But what they both do works, and because of their confidence, neither of them has to over-analyze the situation when it happens in the heat of battle.

I promised you earlier that I would tell you where you can learn more about Brad and his trading strategies that work.  Brad and I have put together a Swing Trading workshop that is really incredible.  It is filled with detailed trading systems that we both use.  And we teach those systems by taking you through trading simulations where you apply the strategies along with us on real market data – you start building your confidence right in the workshop!  For more on this workshop with Brad’s proven strategies and thought processes, click here .

For those of you who are interested in Day Trading, Brad and I have designed a workshop that gives you detailed written systems that can jump-start your trading.  And we take you through real-time simulations to help you learn these strategies in a hands-on fashion.  For more on this workshop click this link.

About the author, D.R. Barton, Jr.

R-e-m-o-v-e me

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