This article was written by Lee Sandford who is a trader, mentor and founder of Trading College, teaching people how to trade on various markets. After 18 years as a professional footballer, Lee has been mentoring people since 2008 and his particular passion is how your own personality can influence your trading style and make you more successful. Lee trades live in front of his students every week and recently had 93 out of 100 profitable trades.
There are 4 types of personality types that I use In my work and mentorship program – The trick is to get traders to realise that most of trading goes on in their head and for them to gain an edge from the markets they first have to understand themselves.
There are quite a few reasons why profiling trader personalities are beneficial:
- It raises awareness about yourself and how you make decisions.
- One size doesn’t fit all. Teaching the same strategy for everyone does not work as some strategies do not fit all personalities.
- It will give you a better understanding of what motivates you as a person and what your drivers are.
- It is an effective introduction to change and new ways of learning.
- You can adopt trading strategies that suit your style.
- You will have an understanding of why things happened in the past.
- It can prevent the following;
- Account blow out or major drawdowns.
- Frustration when trades do not go quite right.
- Analysis paralysis
Personality types can be illustrated below.
Eagle people: Competitive, demanding, Vocal, adventurous, initiating, ‘call it like it is’, independent, self-centred. People who are this personality are Simon Cowell, Winston Churchill, Hillary Clinton, and Madonna.
Parrot people: Active minds seek constant stimulation; enjoy interacting with people around them. Boundless optimism – persuasive and inspirational. People who are this personality are Robin Williams, Bill Clinton, Will Smith, Paris Hilton, Serena Williams, Bill Cosby, Dr McCoy.
Dove people: Maintain harmony, calm, safe environments, concerned about people, practical tried and-true procedures, good listener, modest. People who are this personality are Mr Sulu, Princess Diana, Halle Berry, Michael J Fox, Calvin Coolidge, Mahatma Ghandi, David Beckham.
Owl people: Accuracy, constantly question processes and ideas to make sure they are done properly. Detailed, systematic and efficient. Logical, careful. People who are this personality are Spock, Al Gore, Albert Einstein, Johnny Depp, Tiger Woods, Keanu Reeves, Jimmy Carter, Bjorn Borg.
It is worth emphasising again that the best traders do not come from one particular group or personality type. We do not leave this to guess work so we run online processes that work through a series of questions that challenges the individual. The results are then sent to us for analysis with the individual.
We know that some people can be sceptical at first but they soon change their view once the results are in. It’s always a good idea to let your husband, wife or good friend read over the profile as these people tend to know you best. I wish I had known this work earlier in my life as I would have realised why I reacted to certain situations. For me as a trader it made me realise why I was such an aggressive trader in my early years and why I over traded and lost money.
So now when I’m mentoring someone I know if they have an Eagle type personality that I must slow them down and monitor them closely. They can be too eager to over trade and risk to much of their account size. They don’t like small wins and will want to win big at the risk of losing big. I’m direct with these people as they like to be told how to do it without messing around.
We all have at least one Parrot personalities as a friend. These are the people who are the life and soul of the party and never stop talking. You know the type. They seem to have so much fun and are always doing so much. Firstly, I have to make sure they’re straight with me. There is no hiding place as these types of people are great at talking themselves out of situations and can pull the wool over anyone’s eyes.
They’re fun to be with and everyone gets on with them but trading is a serious business and we can leave the fun and games to non-trading time. I need to make sure they’re going to be doing the back testing and testing the strategies I give them. They can soon lose interest as they want to explore other indicators, courses. They will just keep going around in circles and will end up at the place they started if they don’t stick to the plan.
The Participants in Forex Trading and their Role in the MarketGo to article >>
Doves get the job done. If I say to a Dove personality that I want them to complete a money management task, I know they will get the job done. They may ask several questions, but once they get it you can trust them they will come back with the answers. These are your practical friends. The ones you can rely on to turn up on time.
Owls are great to teach. They’re little more challenging than the other personalities as I have to get them trading otherwise they will still be demo trading 1 year later. They love detail. Email correspondence is normally very long. They love detail so when I’m describing the make-up of the strategy I have to cover every detail possible. For example, if I’m talking about going long at a trend line an Owl will always ask at what exact price should they go long? Giving them a stop loss price below a previous support area is not good enough for an OWl.
They will need to know the exact price. That’s good as it shows they want to trade the right way. Owls though have a tendency to overthink instead of trade. I see Owls struggle with analyses paralyses more than any of the other personality types and this is something that can really frustrate them.
A personality profile example
This is an example, based on a real life situation and how I can help you become a more successful trader.
John is relatively new to trading and wants to know how to return consistent profits. He completes our profile test online and he passes it to one of his friends for their input, for how we see ourselves will often be different to how others see us.
The results highlight comes out saying that John is 80% owl and 20% Eagle. Due to his natural style being more analytical (owls), John takes time to read the full 40 page report that is produced. It contains many different visual charts and figures which show his natural tendency towards certain personality traits.
What the report highlights is a set of points that allow me to help John understand some things he should and should not be doing, in order for him to become a better trader.
- a clear set of rules to follow
- procedures and processes in place
- precise money management formulas
- good record keeping
- measurable trading metrics as a visual way of identifying trading styles
- lots of 1-1 support sessions to ask more questions
These will help John to feel comfortable and in control allowing him to make better trading decisions and an understanding of why things are happening. John needs to know ‘why’ all the time.
What I can then help John understand is that the conditions do not always have to be perfect in order to make a profitable trade. That he should not concern himself with the why too much as this can lead to missed opportunities, and that he should be encouraged to place trades.
With John I will not be using wishy-washy language but technically correct terms, and finally I will help John identify the crucial charts and information that he needs in order to place a trade.
Insight into the markets is one aspect of being a trader, but insight into your own personality and how you can use that to your best advantage is what takes you from being just another trader to a great and successful trader.
If you would like to know more about personality profiling to help you with your trading then please contact email@example.com.
Read here the 1st part.