Dr. Van K. Tharp, a professional psychologist, and a trader coach has created Trader Personality Types that identify the kinds of people who participate in the Forex market.
Elements Needed To Be Successful In Trading
Let’s first see the three primary psychological elements that a trader must have to find success in trading. Dr. Van K. Tharp identifies these three crucial elements as:
- Being able to use logic and analysis to base trading decisions on.
- Ability to grasp the big picture, to connect events, and to identify trading opportunities.
- Being orderly, decisive, and ready to operate sequentially.
Meanwhile, here are the 15 trader personality types that can be found in the Forex trading world:
The 15 Trader Personality Types
- 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 Value-Driven Trader
Traders Who Can Be Successful
As we have said earlier, Forex trading is not for everyone; thus, not every participant in this venture can be successful. Out of the 15 personality types that dive into it, only two have the highest probability of being successful – the Strategic Trader and Planning Trader types.
With their names alone, it makes a lot of sense why they have what it takes to be profitable traders.
It takes a well-thought-out strategy as well as a solid plan to take advantage of the wealth opportunities trading brings. The Strategic Trader and Planning Trader types also know how to surf through different market conditions properly – an ability other types lack.
Traders who only know how to deal with one or two market conditions won’t survive long enough. What they need is mental flexibility that can adjust to any market conditions.
Traders Who Can Achieve Forex Success But May Need To Work Harder
The next ten personality types also have a high chance of being successful in trading. However, these types might need to work a bit harder compared to the first two mentioned personalities.
These personalities include:
- Spontaneous Trader
- Administrative Trader
- Detailed Trader
- Facilitative Trader
- Innovative Trader
- Independent Trader
- Values-Driven Trader
- Socially Responsible Trader
- Adventurous Trader
These personality types have one or two of the three elements we’ve mentioned above. Again, they have a chance to be successful, but they need to work out on the elements they lack. Furthermore, they need to polish their behavioral responses and honest self-observation to make significant progress in their trading careers.
Traders Who Will Find It Difficult To Be Successful
- Fun Loving Trader
- Supportive Trader
- Artistic Trader
These types of traders may have to think twice about continuing their careers in trading. Out of the 15 personality types, these three types have the lowest chance of attaining success in trading. The main reason is that these types lack any of the needed elements to be successful.
So if these traders are not willing to work hard to develop the characteristics they lack, they’ll probably be better off investing their money and task other traders to trade for them. They may also consider venturing in other markets like stocks or commodities.