I’ll be honest, I’m not usually a big one for personality tests. They either conjure images of Cosmopolitan magazine “Is He Really Boyfriend Material?” quizzes, or dodgy Scientologist recruitment programs.
But over years and years of trying to change my behaviour to suit the processes of trading, I’ve come to learn that I’m better off looking at my strengths and weaknesses, and then working my trading systems around that!
The human psyche has been finely tuned over millennia to be great at keeping us out of danger, finding necessary resources where available, and making rapid risk assessments, while being chased by a wild animal.
As a result, it is out-and-out rubbish when it comes to trading.
All our natural instincts pull us in the wrong the directions, making us jump out of winning trades too early … hold on to losses … take big gambles when we should be sitting on our hands … and fail to take the plunge when the moment is right.
Over the years, I’ve come to accept that I’m not going to change my behavior completely – I’ll always have these foibles that lead me into bad trading decisions, but I can create trading strategies that help me navigate through these weaknesses … so a bit of extra knowledge about our personal traits will help us become better traders.
So, here I’m going to look at some basic Jungian personality types, and – depending on where you fit into them, how your natural characteristics can help you, and hinder you, in your trading.
And – most importantly – what you can do to overcome your weaknesses.
There are four dimensions of personality according to Carl Jung, and in each dimension, we fall into one of two brackets …
- Introversion or Extraversion
- Sensation or iNtuition
- Thinking or Feeling
- Judgement or Perception
The result of your test will give you four letters, each relating to one of the categories above (as highlighted in bold).
There are lots of online Myer-Briggs test that you can go through, but I’ve included a pared-down one here …
So, now armed with your four-letter categorization, let’s look at each of those dimensions in turn. And please go down to the foot of these page to see the poll, which will measure how many Bulletin readers fit into each category, and whether that reveals anything about their success as traders …
Introversion vs Extraversion
This is about more than whether you’re the life and soul of the party, or prefer to stay home with a book …
An extraverted trader will focus more on the outer, physical world. While an introverted trader will focus on their inner world and how they produce their results.
Neither is necessarily a better trader, but an introverted individual may find it easier to develop trading systems, follow their methodology, and track performance.
Meanwhile, the extraverted individual may be more aware of external influences on the markets (although could assign too much weight to these).
If you’ve an extravert tendency, look for trading systems that won’t demand too much of you in terms of focusing on your personal methods, and be wary of market-watching and the poor decisions it can lead to.
If you’ve introverted tendencies, avoid getting so bogged down in your methodology that you fail to look at the bigger picture, and be aware that external influences, like coaches and forums, can give useful checks and balances to your performance.
Sensation vs Intuition
The sensation orientation is all about using our senses to understand the world around us – empirically, like a scientist following a practical experiment. By contrast, the intuition orientation is what Jung called ‘perception by the unconscious mind’.
I’d guard against viewing ‘intuition’ as some wishy-washy gut instinct. Instead, it can be as much about viewing a big picture, and filling in the gaps where the information is missing. I sometimes think of trading as like driving at night – our brains are constantly working to make sense of the more limited data that they’re receiving, filling in the blanks – there’s a lot of this in trading, and some people are better at it than others.
Intuition also enables us to see what is possible, rather than just what’s in front of us right now. That’s the kind of tendency that drives people into trading – looking for financial freedom.
But we shouldn’t knock the importance of the cold, hard facts either – those with the intuition orientation can be prone to getting carried away, and need to ground themselves with some ‘sensation’ tendencies.
Thinking vs Feeling
As you’d expect, thinking involves logical processes, evaluating cause and effect. Thinking focused people will tend to weigh up pros and cons in making a decision.
Feeling, by contrast, involves value judgements and emotions.
Whilst traders are always told that we should be less emotional, and almost robotic in our decision making, thinking-dominate traders can fall into the trap of inaction. Thinking and logical can help us to develop great trading methods, but it’s feeling that leads us to actually press the ‘buy’ button on a trade.
Without ‘feeling’, we’re not able to make judgements about what’s important to us, what we value, and what risks we’re prepared to take.
If you’re thinking-dominant, remind yourself why you started trading in the first, what are your goals?
Judgement vs Perception
Those traders with a bias to judgement are people looking for resolution – they want to evaluate information and make a decision. By contrast, perception-focused traders prefer a more open-ended outcome.
There are clear benefits to being a judgement-type in trading – having a clear plan and structure, sticking with things to their outcome. While the perception-type may make trading decisions on the hoof.
However, the perceiving trader can be more adaptable – and the market is always changing, and demanding that we adjust our methods along with it, if we want to stay profitable.
Not an INTJ? Don’t panic!
The stereotypical trading ‘type’ would be the INTJ – introverted enough to be interested in systems, intuitive enough to see the bigger picture, thinking enough to follow logical methods, and judgemental enough to follow through …
But, of course, many of us don’t fit the perfect profiling – I speak as a proud ENFP!
And what a dull world trading would be if we all chose jobs that perfectly aligned with our personalities! All these categories are spectrums, and we’ll find ourselves somewhere on a sliding scale between two extremes.
And if your profile doesn’t match the textbook trader, it just means that you’ll bring a different range of strengths and challenges to the table – all perfectly valid, and all with the different little human foibles that we need to try to overcome.
Don’t forget to enter your details in the poll below …