Personality is important in trading because successful traders need a special mix of qualities that help them make wise judgments, control risk, and adjust to shifting market conditions, says Steve Burns of New Trader U.
According to the widely-used Briggs-Myers Personality Test, we can quantify the characteristics that successful traders have been found to have with their particular personality type.
The Briggs-Myers Personality Test: What Is It?
The Briggs-Myers Type Indicator (MBTI) is a widely used personality assessment test. The test is based on Carl Jung’s theory of personality types, which describes how people perceive the world and make decisions. The test is designed to help people understand their personality type and how they interact with others and the world. This test can ascertain whether a person possesses the traits and characteristics required for success in the field of trading. It has been proven to help identify common traits and features among successful traders.
How to Take the Briggs-Meyer Personality Test
The official MBTI assessment can be taken for free online on many websites. Remember that these free versions may not be as accurate as the official version and only give you a general idea of your personality type. However, a free personality test is enough to give you a better understanding of yourself.
Understanding the Different Personality Types
The Briggs-Myers test measures four personality traits: extraversion against introversion, sensing versus intuition, thinking versus emotion, and judging versus perceiving. Introverts are more reserved and get energy from being alone, whereas extroverts are gregarious and get energy from being around people. While intuitive people concentrate on patterns and possibilities, sensor-focused people concentrate on facts and specifics. Thinkers make decisions based on logic and objectivity, while feelers make decisions based on values and emotions. Perceivers favor flexibility and spontaneity, while judges want order and organization.
These four dimensions are combined to form the 16 various personality types. For example, ISTJ (Introverted, Sensing, Thinking, Judging) and ENFP (Extraverted, Intuitive, Feeling, Perceiving) are two different personality types. Each variety has particular advantages and disadvantages of its own.
Analysis of Top Traders and Their Personality Types
According to research, certain personality traits are more common among profitable traders. According to studies, traders who can think critically, analyze situations, and make quick decisions tend to perform better in the market.
INTJ personality types are most frequently observed as successful traders due to their innate personality types. One study found that 81% of INTJs were profitable, far higher than a sample of traders overall, which is closer to 10% profitable, not filtered for personality. These personality types are known for their ability to reason logically, pay close attention to detail, and make judgments based on information rather than feelings.
The acronym INTJ stands for “introverted, intuitive, thinking, and judging.” This personality type is known as “the intellectual,” “the architect,” “the mastermind,” or “the strategist” type. Famous INTJs include Stephen Hawking and Isaac Newton.
INTJ is the third-rarest Myers-Briggs personality type.
People who are INTJs make up 2.1% of the population. This type is a little more common among men, with 3.3% of the population. Women only make up 0.8% of the INTJ population.
Strengths of the INTJ personality type that give them an edge:
- Ability to solve complex problems.
- Ambition and drive.
- Thirst for knowledge and understanding.
- Unwavering self-confidence.
- Willingness to explore new ways to think.
INTJs have a natural preference for analysis and pattern recognition.
Their innate skills are necessary to judge the bias of long buyers versus sellers and shorts on a trade before execution, combined with inherent patience to wait for and only trade high-winning percentage market setups and signals.
Benefits of Having a Particular Personality Type When Trading
Certain personality traits, such as the capacity for rapid, data-driven decision-making and critical thought, can aid success in trading. Though many great traders have a variety of personality types, it’s vital to remember that having a certain personality type does not ensure success in trading.
The traits that make up the typical trader personality type will differ from person to person. Still, these people generally can remain composed under pressure, think strategically and logically, and make well-considered decisions. However, they could still have difficulty controlling their egos, not taking enough risks, and being adaptable to rapid changes.
Become a Better Trader Regardless of Your Personality Type
Traders who are self-conscious and aware of how their personality may affect their trading may be able to control personality-related deficiencies. Traders can lessen the harmful effects of specific personality traits by reflecting on their behavior and learning to recognize and control their emotional responses.
Traders can use mentorship, education, and other tools to develop further abilities that fit their personality type to expand on their innate talents. Traders can also find the best method for them by experimenting and testing various trading methods.
Learn more about Steve Burns at NewTraderU.com.