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Your Trader Personality Type

One's Trader Type is a set of character traits that do not change much over time. Like DNA, character traits influence how we live.... and how we trade. Your Trader Type is also associated with a specific set of strengths and weaknesses. You may already be aware of these positive and negative factors in your trading, but you may not have realized that they correspond to a Type.

This means that there are thousands of traders out there with the same or similar profile, facing the same issues that you are. Additionally, your trading buddies and mentors are likely to be of a different type. What works for them is probably not going to work for you. Once you realize this, you can approach your own development as a trader with more clarity and focus.

AWARE™

My Trader Type model is based on five distinct personality types: Agrarian, Warrior, Artist, Realist and Engineer. The acronym is AWARE™-. Most traders express the characteristics of just one type, but hybrids of two types are not uncommon. As traders develop, however, some individuals begin to integrate more than two approaches, resulting in what I call 'Super-Hybrid' combinations of 3 or more types.

Congratulations! Super-Hybrid test results tend to be associated with advanced traders and your results place you in this category. Super-Hybrid traders tend to be the most successful because they are the most adaptive. Of course, this process takes time. Like a good wine, Super-Hybrid traders have matured 'organically' in order to achieve mastery over the complex market environment.

Agrarian ('Farmer') + Warrior + Realist (A Super-Hybrid)

Based on your answers, your Trader Type is Super-Hybrid of at least three of the five standard types. Your most dominant types are: 'The Agrarian' (aka 'The Farmer'), The Warrior and The Realist. Below you will find a separate discussion of each type. The way you integrate the three dominant styles will be somewhat individual. That said, once you are aware of the mix, you may recognize how they each express themselves in your trading. You will trade the best when there is harmonious inner cooperation.

Type 1: THE AGRARIAN (aka 'FARMER')

'The Agrarian Trader' aka 'The Farmer' has the following strengths and weaknesses, summarized here and then discussed below.
STRENGTHS

  •  Careful
  • Consistent
  •  Conservative
  • Deliberate and methodical planner
  •  Largely unemotional
  •  Disciplined
  •  Honest and helpful

WEAKNESSES

  •  Oversimplifies trading
  • Flustered by volatile or random markets
  • Takes trading results personally
  •  Too nice
DISCUSSION
Agrarian Traders are laid-back individuals who take a careful, consistent and conservative approach to life and trading. You are not attracted to drama or conflict. Rather, you like things to be peaceful and predictable. Agrarians tend to speak and act in a deliberate, measured manner no matter what is going on around them.

The term, however, might need some clarification. Remember those Hollywood Westerns where mom and pop Farmer, (who might also have some sheep) were pitted against the marauding nomadic cowboys or Indians? This theme generated endless dramatic interest because the two cultures are polar opposites. Whereas horsemen are aggressive, Agrarians have a generally cooperative, albeit vigilant attitude and circle the wagons when challenged.

Unlike the opportunistic raiders, Agrarians are careful planners. For Agrarian Traders, consistency is much more important than spontaneity or creativity. Agrarians take calculated risks, but they don't change horses in mid-stream. Rather, Agrarian Traders want a clear, reliable method that they can apply repeatedly to just one or two markets. This might mean you are attracted to automated strategies.

Agrarian Traders don't chase momentum, but rather prefer to take advantage of the repeating patterns and cycles in their chosen market. Agrarians also tend to take a longer- term perspective than other types of traders, which means you are more suited for swing trading than daytrading.

Agrarian-type traders are naturally attuned to market 'weather' and will tend to look at market internals or other measures for a read on conditions. Agrarians will be reluctant to make trading decisions without referencing the character of the environment and attempting to harmonize with it. Along that line, Agrarians are not counter-trend traders; you want to go with the flow.

PSYCHOLOGICAL CHALLENGES
Agrarian Traders like things to line up. The natural randomness of the market can paralyze Agrarian Traders, who try to find a rule that explains everything. As they wait for a specific set of conditions to coincide, they might find themselves missing out or over-analyzing.

Agrarians are straightforward individuals who may underestimate the difficulty of trading and may not be prepared for its random acts of unkindness. Agrarians believe hard work has just rewards. Because they value fairness, Agrarian Traders risk taking the randomness of the market personally when it causes them to lose money. This can lead to feelings of rejection and depression.

Type 2: THE WARRIOR

At the same time, there is a part of you that approaches the market like a Warrior. This type has the following strengths and weaknesses, summarized here and then discussed below.
STRENGTHS

  • Competitive
  • Courageous
  • Aggressive
  • Tenacious
  • Mercenary/Opportunistic

WEAKNESSES

  • Stubborn/inflexible after entry
  • Motivated by revenge
  • Double down on losers
  • Stuck in their ways
DISCUSSION
Warrior Traders are probably the most common personality type among pit traders from Chicago and New York. For Warriors, trading is an intense competition that requires mental toughness and assertiveness. Warrior Traders take a dominant role in most situations, including trading. Of course, they are not under the illusion that they can control the market, but they do not let the market control them.

Although Warrior Traders may be 'nice' people, especially with family and friends, they have a natural tendency toward aggression. Struggle, per se, is not a negative for them; they like a good fight. In trading, their main focus is determining who is in control, which side is currently winning the battle, and they join with the prospective victors. When markets moves against them, Warrior Traders tenaciously hold their ground, because they have a high tolerance for discomfort and pain.

Warrior Traders are usually not tied to a rigid system. Their entries are discretionary and opportunistic, but that does not mean they are sloppy or impulsive. Far from it. Warrior traders are calculating; they often enter at extremes, and they can stay in a trade for a long time, waiting patiently for their target to be hit. Warrior Traders would rather wait for that last tick, than get out early. They don't micro-manage their trades and they rarely get shaken out of a good trade.

Warriors enjoy volatile, news-driven situations because they play into their strong suit: courage. They like to enter long when others are afraid to buy and they do not hesitate to short sell irrational exuberance. Warrior Traders also set traps that exploit the naiveté and stupidity of amateurs, believing that those people deserve to be 'awakened.' 

PSYCHOLOGICAL CHALLENGES
Warrior Traders have a tendency to take losses personally and they will revenge trade to get their money back. In fact, revenge, or coming back from a deficit, is their most powerful motivator and they sometimes get bored or sloppy when there is nothing obvious to struggle against.

Warrior Traders tend to be stubborn, so they are vulnerable to holding on to losers too long. Some will tend to double down on a losing trade rather than take a loss. Their stubbornness shows up in needing to have things their way, which may make them closed-off to new ideas. As a result, Warrior Traders might find themselves committed to a trading method that no longer works and have difficulty making a shift.

 

Type 3: THE REALIST 

Based on your answers to the Personality Type questions, your Trader Type is THE REALIST. This type has the following strengths and weaknesses, summarized here and then discussed below.

STRENGTHS

  • Practical and pragmatic
  • Motivated
  • Confident
  • Competitive
  • Balanced
  • Willing to do whatever it takes to succeed

WEAKNESSES

  • Take losses personally
  • Don't seek help soon enough
  • Secretly self-critical
  • Fear of finishing the race in second place
DISCUSSION

Realists approach trading in a practical manner with a focus on what works. All traders have to be realists to some extent, but Realists with a capital 'R' are the true pragmatists of trading. Realist Traders could be comfortable trading a 'black box' system, as long as it produced results. For Realists, winning is what matters and they will be disappointed in themselves if they don't win everyday.

If a Realist comes to trading after a previous career, he/she will usually have been quite successful at it. They are confident they can make it as a trader because they have tasted success and their chameleon-like nature enables them to adapt. In fact, their high level of confidence often inspires others.

Although Realists find it easy to make friends and close deals, they also tend to be somewhat sensitive to how they are perceived by others. Although they have a very competitive and ambitious nature, Realist Traders are careful to not to appear arrogant. Nevertheless, Realists approach the market in a mercenary manner and will take advantage whenever and wherever they can.

One of the things that attracts Realists to trading is the fact that their success only depends on themselves. Realist Traders work on maintaining a positive, winning attitude at all times. They hate to fail, but they are also capable of taking failure in stride because they are confident they can bounce back.

Realist Traders might seek to emulate certain qualities of famous traders and they certainly aspire to that lifestyle. In their trading, Realists prepare to scale up in size as they learn the ropes. Realists also know how to have a good time and leave the office at the office. This means they can strike a healthy balance between work and pleasure.

PSYCHOLOGICAL CHALLENGES

Underneath their grounded realism is an imperative to win that can make it difficult to tolerate losses, which are a normal part of trading. The risk for Realists is that they will hide or deny their actual trading results if they are not up to par and wait too long to seek help if they are having problems.

Realists also have an emotionally vulnerable and self-critical side that they often hide. Because they are so focused on success, Realist Traders can also get ahead of themselves, which may create a troubling discrepancy between the golden future and the less-than-ideal present that can occasionally destabilize them.