See if you can spot yourself (or someone you know VERY well) listed below…

Reckless Rhonda-

Rhonda is an interesting sort, she fancies herself as being a highly successful trader and when she is right, she’s on top of the world. However, when she’s wrong, she’s really wrong. There is no in between with Rhonda and as such, she is prone to large financial and emotional swings. Due diligence is foreign to her, she just goes on gut feeling. There is no consistency to what she does. The bottom line is when she does win, it’s brief and fleeting. She plunges into trades to try to recover her loses and most of the time it doesn’t work out.

Fearful Freddie-

Freddie does so much research that he probably knows as much about the company as the CFO or CEO!. He understands the market or so he thinks. He is an academic sort of guy but he is not a successful trader because he has difficulty “pulling the trigger”. When Freddie does enter a trade, he can’t let it work and he is easily “shaken out’ of his positions if the trade does go the way he thinks it should. As a consequence, he often will see trades that he has exited prematurely end up being winners but he isn’t around to reap the rewards.

Boastful Bob-

Bob is never wrong about much. He has to be right on most subjects. As a result, Bob will refuse to let a losing position validate that he is wrong. He will ride that loser right into the ground rather than admit he was wrong. Finally, he’ll get out because the pain is just too much to bear. He’ll never let you know he was wrong, so he’ll suffer the internal conflict of the loss alone. Bob finds it nearly impossible to cut losses or to make adjustments to losing positions. By the way, Bob is a big time loser in the stock market.

Greedy Gerdie-

Gerdie stayed at the party too long. Many times she had a nice gain but she just wanted to milk it for a little while longer and “BAM” the position totally reversed and she not only lost the gain but she ended up in the red. She tells her friends about the one that got away and “if or shoulda” unfortunately doesn’t make us money in the market s. So Gerdie swears that next time “I’ll get out when I have a profit”. Gerdie has now learned her lesson and on the next trade she’s not going to let this one get away so she exits the trade with just enough profit to pay for the transaction costs and the bid/ask spread. Her broker loves her because he’s the only one making money. Gerdie is now losing her confidence and wonders if she can ever make this work.
These are only a few profiles of trading personalities that populate the markets many more exist. What kind of a trader are you? I am going to give you a gold nugget and it may sound pretty basic but what I’m about to say could save you trading career. KEEP A JOURNAL. I t doesn’t have to be a gold embossed diary. A memo pad will do quite well. Date it every day and record your actions and thoughts. You will find it to be very revealing and you will begin to see patterns in your trading behavior.

Well that’s it for now. I hope it was helpful. It’s time to head back to old Sherwood Forrest to rejoin my “Merry Band of Traders”

Good Trading , Rob

Bookmark It

Hide Sites