Have right personality traits to be good forex trader? Eat this!
Willingness to try something new and unfamiliar
Your ability to trade well may depend on your propensity to eat this!
According to a personality quiz, the more willing you are to eat this dancing squid, the more risk-tolerant you are, the more likely you are to perform well at trading.
Dr Brett Steenbarger’s ‘Trader’s Personality Quiz’
According to Dr Brett Steenbarger, Ph.D., Psychologist and Trading Coach, author of books on trading and psychology, individuals who trade well tend to be risk tolerant, low in neuroticism and highly conscientious.
If I had to identify an ideal personality pattern for traders, I would say that such a person would be risk-tolerant, low in neuroticism, and high in conscientiousness. Such traders are generally good at following trading rules (entries, exits, money management) and disciplined in their preparation. They don’t take losses personally, which gives them the perseverance to weather losing periods. When they see a good trade, they are comfortable trading in size, so that the average size of their wins exceeds that of their losses.
Dr Steenbarger developed ‘Trader’s Personality Quiz‘, a quiz made up of 15 items, each consisting of 2 statements. Respondent must choose the statements that best describe oneself. The quiz scores traders according to 3 personality traits: ‘Risk-Aversion’, ‘Neuroticism’ and ‘Conscientiousness’. Individuals endowed with the best personality traits for successful trading should ideally score low on risk-aversion (which is high risk-tolerance), low on neuroticism and high on conscientiousness.
This is an example from the quiz. Respondents must choose the best statement.
3a) When I go out to eat, I generally go to my favorite restaurants and order my favorite foods.
3b) When I go out to eat, I like to try new and unfamiliar restaurants and foods.
Statement 3a = high risk aversion, statement 3b = low risk aversion (high risk tolerance).
My own take
I find the quiz an interesting self-discovery tool. Some individuals who tried it as well tell me that the results describe them pretty well. As a trader and a trainer however, I believe that individuals who want to be traders should not be discouraged if their traits do not fit the ‘ideal’ outcome. In my opinion, ability to trade well is not cast in stone. There is a Chinese proverb ‘只要功夫深，铁杵磨成针‘ which literally says that If you work at it hard enough, you can grind an iron bar into a needle.
Views expressed here are my own and not endorsed in any way by Dr Steenbarger.
Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.
“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.