It is as difficult to perceive one’s own personality as it is to see one’s face without a mirror. It sometimes takes frank feedback from someone we love to really get a sense of who we actually are.
Most advice you hear about trading is not objective advice… it is already colored by the personality of the person offering it. And almost always that person is touting the specific information he or she needs to hear.
For example, traders are often admonished to “cut your losers short.” If you happen to be a stubborn Warrior Type then that advice might save your account.
However, if you are a risk averse trader, or a nervous trader, you are already cutting your losers short…way too short… and you probably need to trade with wider stops.
In my work with top traders I’ve developed a model consisting of 5 Trader “Types” that helps traders understand themselves better so they can fix what’s really needs fixing… and ignore irrelevant advice.
[Note: This is Part 4 of a 5 Part series on the Five Trader Personality Types. At the end of the series you will be able to take a free self-test to determine your type. The acronym I’ve developed is AWARE.* The first letter ‘A’ stands for Agrarian (Farmer). The ‘W’ is for Warrior, the second ‘A’ is for Artist. This week we address the letter ‘R.’ ]
‘R’ is for ‘Realist’
One often hears coaches guide their clients to approach trading as a business. These folks are Realists.
All successful traders are realists to some extent, but Realists with a capital ‘R’ focus almost entirely on the nuts and bolts of trading and the bottom line. Realists only care about what works. They never ask “Why?” they simply want to know “How?”
Realists often come to trading after success in a previous career and they bring that confidence with them. For realists, winning is what matters and they fully expect to win every day. Naturally, they do their very best to maintain a positive, winning attitude at all times.
Psychological Challenges for Realists
Realists are highly competitive and have little tolerance for failure. Therefore, they have difficulty with the rather extended learning curve in trading and may feel quite discouraged and disillusioned once beginner’s luck runs out. Some Realists also tend to have an image of success (or knowledge) that they need to protect and project. (Doctors tend to fall into this category.) These folks fully expect to be able learn everything they need to know on their own, and usually don’t seek advice/help from others until it’s too late.
*The AWARE model is copyright by Dr. Kenneth Reid. All rights reserved. Daytradingpsychology.com
