One’s personality is like the water a fish swims in. It colors our perceptions and decisions in a global manner that we are usually quite naive about. Frankly, one’s personality quirks often get a pass from others in the course of daily life (“He’s just that way.”), but when it comes to the financial arena, our personality strongly affects our bottom-line results.
[Note: In my work with top traders I’ve developed a model that helps traders and investors understand themselves better. This is Part 5 of a 5 Part series on the Five Trader Personality Types. The acronym is AWARE.* The first letter ‘A’ stands for Agrarian (Farmer). The ‘W’ is for Warrior, the second ‘A’ is for Artist and the ‘R’ stands for Realist. This week we address the final letter ‘E.’ Next week you will be able to take a free self-test to determine your type. ]
‘E’ is for ‘Engineer’
Engineers are detail oriented and rarely make mistakes because, like doctors, they have been taught that mistakes can kill. Therefore, they are conservative, calculating and methodical when it comes to risk-taking, both in trading and in life. Many Engineers have a critical inner voice that monitors their every move.
No wonder Engineers tend to drive the speed limit and fill up their gas tank well before the warning light comes on. They keep a flashlight and emergency tools in the car, just to be prepared. They research and deliberate before they purchase anything and they read the directions before assembly.
Engineers play by the rules and ask a lot of questions because they want to know the facts and the rules of the game before they get involved. In trading and investing they rely on reason, not luck and have clear risk and performance parameters.
They carefully back-test their methods and although they are aware that past performance is not indicative of future results, Engineers would rarely trade a method that lacked a verifiable track record.
Psychological Challenges for Engineers
Engineers love precision, which is rarely possible in the highly random trading environment. They may require so many factors to line up perfectly that a paralysis of analysis results because every approach they can think of is always incomplete in some way.
Lastly, Engineers are naturally proud of their rationality and may secretly enjoy pointing out the sloppy thinking of others. When their emotions get in the way of their trading, however, they feel terribly embarrassed and even ashamed.
*The AWARE model is copyright by Dr. Kenneth Reid. All rights reserved. Daytradingpsychology.com
