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.
