Monday, February 25, 2008

Tharp Trader Test

Spontaneous Trader

You are probably enthusiastic, warm and quite imaginative. You see life as being full of possibilities. In addition, you are able to quickly make connections between events and the information to which you are exposed and then make quick decisions. This quality can be good as a trader, but you also need to be very careful because you only have one of the three qualities that we find in the best traders.

You have the initiative to start ideas and projects and can usually succeed in any endeavor that you find interest in; but sometimes you have a problem with follow through or completion. Your enthusiasm encourages others to get involved in your projects; however this has no real bearing on trading. You should make it a practice to regularly check in with your values, center yourself on what you believe, and then make sure you are living on purpose. Doing so will help you tremendously with the discipline required for trading success.

You tend to want a lot of affirmation from others that you are not likely to find in the trading arena. You also like to give others appreciation and support and you are not likely to find people who want that in the trading arena. You are spontaneous and flexible, using your ability to improvise when needed. However, this is seldom called upon in the trading world in which your actions need to be preplanned and quite deliberate.

Details may seem trivial to you, because you tend to focus on possibilities. Thus, it would be easy for you to see the possibilities in trading success, but difficult to develop the plan that it takes to follow through with your vision. As a result, you may tend to struggle with certain aspects of trading/investing. In addition, you may also tend to take on too much risk before you are prepared to do so. As a result, you need to thoroughly understand the concept of position sizing and its ramifications before you enter into the world of trading.

Trading Strengths

Enthusiasm and a willingness to take action; you probably don’t have a problem with pulling the trigger or trying new trading systems.
You can easily trade a new system comfortably using real money and small position sizing.
If you understand low risk trading ideas then you should be able to trade quickly and easily. Although this is a great strength, if you don’t understand the importance of position sizing, then it could be fatal.

Trading Challenges

Discipline, follow through and attention to detail will always be challenges, and you need to find ways to achieve these that are automatic, scheduled and regular.
You are easily influenced by external sources which means you need approval from others to feel good about yourself rather than being able to trust objective data (this is probably why you want a mentor).
Because you get excited about new things, and like to share often, you can easily get distracted from something that works.
Good trading is boring, therefore you will need other external ways of fulfilling your need for excitement.

Wanna find out what kind of Trader you are? Take the Tharp Trader Test here.

No comments:

Post a Comment