8/19/2009

Know Thyself

So if the key to successful trading is all in my head then it would make sense to have some understanding of just what is going on inside my head. To long time readers this may be a frightening thought, but hey everyone likes to stare at car accidents so why not this.

I took the Myers Briggs personality test a couple of years ago and incorporated the results into a personality profile within my business plan. The idea being I wanted to see how my personality helps and or hurts my trading efforts. I think the result was somewhat useful and if you have not done this it may be worth the effort.

I'm not going to post any links to a Myers Briggs test due to copyright laws, you can do your own search and take it from there.

Here is the section from my business plan.

Personality Profile:

My individual strengths and weaknesses that will affect the emotional business of trading money are derived from my personality traits which have been described by the Myers Briggs Personality Profile as INTJ (Introverted Intuitive Thinking Judging).

“This personality type is described as the most self-confident of all the types, having "self power" awareness. Found in about 1 percent of the general population, the INTJs live in an introspective reality, focusing on possibilities, using thinking in the form of empirical logic, and preferring that events and people serve some positive use. Decisions come naturally to INTJs; once a decision is made, INTJs are at rest. INTJs look to the future rather than the past, and a word which captures the essence of INTJs is builder - a builder of systems and the applier of theoretical models.” David Keirsey & Marily Bates, Please Understand Me, Character and Temperament Types

“INTJs are perfectionists, with a seemingly endless capacity for improving upon anything that takes their interest. What prevents them from becoming chronically bogged down in this pursuit of perfection is the pragmatism so characteristic of the type: INTJs apply (often ruthlessly) the criterion "Does it work?" to everything from their own research efforts to the prevailing social norms. This in turn produces an unusual independence of mind, freeing the INTJ from the constraints of authority, convention, or sentiment for its own sake.” Marina M. Heiss

While I can see there are many INTJ attributes that are conducive to trading, the drive for perfection can be problematic as perfection in trading does not exist.

I have to be conscious of this and utilize statistical data to form truths that override my desire to never be wrong. In trading you can be wrong more often than right and yet still be very profitable if you stick to the plan. All trading plans will have a series of consecutive losing trades and as these trades stack up and I am “wrong” over and over my tendency is to want to abandon the plan and start the research process over again in the search for perfection. I have to consistently remind myself this pursuit is fruitless. I also must frame each losing trade based on was it a valid setup or not, did I follow the plan, or not. If the losing trade met the plan criteria then it’s a good trade.

In other words I was not “wrong” if I followed the plan. I can only be “wrong” when I fail to follow the plan.

This desire for perfection has manifested itself in my trading history with what is known as “revenge trading”. Revenge trading is re entering positions immediately after a trading stop out in order to prove that I was right in the first place. This is why I have programmed rules about when I can take another position after a stop out, to stop any random revenge trades.

Under extreme stress, fatigue or illness these characteristics can appear in an INTJ:

• doing things to excess - e.g.: eating, drinking or exercising
• acting very impulsively, perhaps starting off more projects than the INTJ could hope to accomplish
• expressing emotions in an intensive and uncontrolled way
• being very sensitive to criticism
• asking for lots of information that is irrelevant

Summary – INTJ

Contributions to the Organization
• Provide strong conceptual and design skills
• Organize ideas into action plans
• Work to remove all obstacles to goal attainment
• Have strong visions of what the organization can be
• Push the organization to understand the system as a whole with its complex interaction among parts

Leadership Style
• Drive themselves and others to attain the organization's goals
• Act strongly and forcefully in the field of ideas
• Can be tough-minded with others
• Conceptualize, design, and build new models
• Are willing to relentlessly reorganize the whole system when necessary

Preferred Work Environment
• Contains decisive, intellectually challenging people focused on implementing long-range visions
• Allows privacy for reflection
• Efficient
• Includes effective and productive people
• Encourages and supports autonomy
• Opportunities for creativity
• Task-focused

Potential Pitfalls
• May appear so unyielding that others are afraid to approach or challenge them
• May criticize others in their striving for the ideal
• May have difficulty letting go of impractical ideas
• May ignore the impact of their ideas or style on others

Suggestions for Development
• May need to solicit feedback and suggestions
• May need to learn how to appreciate others
• May need to learn when to give up an impractical idea
• May need to focus more on the impact of their ideas on people

26 comments:

Solfest said...

After reading all that again you can see why I now work for myself.

LOL

Jules said...

Solfest,
I'm an INTJ!!! Diagnosed by the one and only licenced MBTI practioner here then (I was with police).
No wonder I like you!!!

Solfest said...

And you now work by yourself. LOL

JE said...

According to the Myers-Briggs Facebook app, I'm an ISTJ. Is that close enough to join your cool kids' club? :-)

Solfest said...

I don't know, S, sensing, sounds kind of touchy feely. You might be too human like.

Jules said...

JE,
It's ok, you can join D's club. He's an ISTJ. That's why we fight. He thinks he's always right, and that's what I think about me too.
So, forget Solfest. You are not going to get along. :-)

JE said...

Jules, I don't THINK I'm always right, I KNOW I'm always right. Big difference.

So, based on your answers, that's a resounding (albeit nicely presented) "NO!" to my prospective club membership.

Oh well, I'll have to content myself with joining D's club. He evidently can hold down a job, so at least there's some security in it!

LOL!

longandwrong said...

INFJ, like Oprah Winfrey, who I often thought would make a good trader! - UF

Solfest said...

INFJ
"Seek meaning and connection in ideas, relationships, and material possessions. Want to understand what motivates people and are insightful about others. Conscientious and committed to their firm values. Develop a clear vision about how best to serve the common good. Organized and decisive in implementing their vision." Myers Briggs Web Site

Wow, I feel, wait a minute INTJs don't "feel", I know that I am now jealous of your "type".

I mean you're like Oprah.

You go girl!!

longandwrong said...

But I am the rarest and that is what *really* matters...

http://www.myersbriggs.org/my-mbti-personality-type/my-mbti-results/how-frequent-is-my-type.asp

Solfest said...

I thought I was the rarest.

Solfest is despondent.

Solfest thinks all INTJs should refer to themselves in the first person.

Jules said...

To the best of my knowledge, most priests are INFJs....

Jules said...

JE,
yes, most ISTJs are extremely trustworthy, reliable and practical. If you have money that you want to pass to your kid, an ISTJ is someone you'd want to appoint as trustee :-)

Jules said...

Solfest,
wonder if you noticed that none of us here are "E"s...hmmm....

Solfest said...

I did notice that Jules.

I'm glad Father UF is here to keep us honest.

longandwrong said...

Apparently INFJ is also known as 'The Mystic' so when I think I am doing all this hardcore analysis I am actually just having visions :-) - Father UF.

[@ Jules - Missing your progress, but understand your reasons, still following the public blog with interest]

Solfest said...

Solfest likes this one.

http://keirsey.com/handler.aspx?s=keirsey&f=fourtemps&tab=5&c=mastermind

The reason Solfest took all the courses to become a broker was not because Solfest wanted to be a broker, Solfest just wanted to buy his first stock.

LOL, so Solfest did a "little" research on how that whole process works.

khalid said...

Y'all might want to check out Naomi Quenck's book Beside Ourselves, an excellent highly readable book on MBTI personalities. She looks at MBTI in a different way than Keirsey and examines each TYPE by analyzing the weaker functions of each TYPE.
So when a certain TYPE is under pressure or severe stress, or with their guard down, say the INTP, Quenck looks at how that TYPE's weaker functions the Feeling and Sensing and Extroversion and to a lesser extent Judging manifest themselves awkwardly in that TYPE's behavior.
Usually the TYPE exhibits the opposite of its TYPE, but it comes out all unnatural. Example: A Thinker's "Feeling" comes out as if it is "fake" or not genuine.
She is really looking at the tertiary and inferior functions of each TYPE.
for an INTP, the tertiary is Introverted Sensing, and the inferior is Extraverted Feeling.
So the INTP might do IS in a very awkward way compared to the true IS's ISTJ, and ISFP, the real Introverted Sensors.

Even more awkward for the INTP is doing Extraverted Feeling which becomes way more overdone and exaggerated compared to the true masters of Extraverted Feeling:
ENFJ and ESFJ.

ISTJ and INTJ according to Quenck's book do not share as much as the letters suggest they do.
ISFT's have more in common with their fellow Introverted Sensors ISFJ who share the dominant features IS.

INTJ are related to INFJ's due to the Introverted Intuition dominant function in the personality.

Thought I'd "comment" a little. Been a while since I thought of MBTI, but I fully support incorporating the system into an understanding of you are.
Interestingly, it's the introversion/extroversion that plays a big role in the personality analysis Jung and Quenck talk about.

Solfest said...

Khalid, Solfest thanks you for this information.

Jules said...

UF,
That's so sweet :-) I think I can like an "F" now LOL!
I'm still going to be posting on my private blog. You got my invitation, correct?

Speculator Ed said...

Just took the test, and I'm INTJ, :). Seriously thinking of how I can work for myself.

Jaroslav said...

ENTJ here :D

Solfest said...

ENTJ
"Frank, decisive, assume leadership readily. Quickly see illogical and inefficient procedures and policies, develop and implement comprehensive systems to solve organizational problems. Enjoy long-term planning and goal setting. Usually well informed, well read, enjoy expanding their knowledge and passing it on to others. Forceful in presenting their ideas." Myers Briggs

Jaroslav you should be leading troops into battle.

thelonelytraderv2 said...

Yep. Me too. INTJ.

Solfest said...

Welcome to the club LT.

Now shut up and get back to work.

thelonelytraderv2 said...

k