Brett N. Steenbarger, Ph.D.
A common perspective is that traders run into problems because of personal (or personality) flaws. My experience with successful traders in professional settings, however, finds that the successful traders often have as many of those shortcomings as other traders. The difference lies in their personal strengths--and how they bring these to bear in their trading.
It's only been fairly recently--with the rise of "positive psychology"--that research has taken a hard look at strengths and subjective well-being. One excellent compilation of this research is the large text "Character Strengths and Virtues" by Christopher Peterson and Martin E. P. Seligman. It is an attempt to pull together everything we know about such qualities as wisdom, courage, love, kindness, justice, leadership, modesty, optimism, spirituality, and much more.
Another effort to study strengths are the Values in Action questionnaires that evaluate 24 positive personal qualities. (Interested readers can register on the research site and take the questionnaires for themselves).
My experience is that many trading problems occur, not because of traders' weaknesses, but because their strengths do not align properly with their trading. In an upcoming post, I will update the Trading Coach project and illustrate this concept. Interestingly, very few trading coaches/psychologists seem to spend a great deal of time assessing specific trading and personal strengths. The assumption seems to be that, if you address a weakness, you'll then succeed.
The opposite approach is that, if you build strengths, you can work around your shortcomings.
Let's try a little exercise. Below is a list of strengths from the VIA survey. Identify what you consider to be your five greatest strengths from this list and jot them down:
creativity, curiosity, open-mindedness, love of learning, wisdom, bravery, persistence, integrity, vitality, love, kindness, social intelligence, citizenship, fairness, leadership, forgiveness, modesty, prudence, self-control, appreciation of beauty, gratitude, optimism, humor, spirituality
Once you've written down what you believe to be your five greatest strengths, now--next to each of these strengths--write down how you specifically employ that strength in your day to day trading.
What I find is that, sometimes, how a trader is trading does not make concrete use of his or her greatest strengths. As a result, the trader is pulled two ways: toward what he or she "should" do according to the chosen trading style and toward what comes most naturally as a personal interest and strength. This is not a problem with discipline per se; it is a problem of a lack of fit between trading approach and personal competencies.
It is not necessary for trading to actively engage all your strengths. If many of your top strengths are not regularly utilized in your trading, however, two consequences are likely to result: a) you will not be as successful as you could otherwise be; and b) you will likely find trading less than fully satisfying and will not sustain the motivation to develop yourself fully.
In our Trading Coach project, Trader C. is running into some difficulties that have reduced his profitability. As we shall shortly see, it is his strengths that are getting in his way. In an upcoming post, I'll show what we're doing to remedy that situation.
A common perspective is that traders run into problems because of personal (or personality) flaws. My experience with successful traders in professional settings, however, finds that the successful traders often have as many of those shortcomings as other traders. The difference lies in their personal strengths--and how they bring these to bear in their trading.
It's only been fairly recently--with the rise of "positive psychology"--that research has taken a hard look at strengths and subjective well-being. One excellent compilation of this research is the large text "Character Strengths and Virtues" by Christopher Peterson and Martin E. P. Seligman. It is an attempt to pull together everything we know about such qualities as wisdom, courage, love, kindness, justice, leadership, modesty, optimism, spirituality, and much more.
Another effort to study strengths are the Values in Action questionnaires that evaluate 24 positive personal qualities. (Interested readers can register on the research site and take the questionnaires for themselves).
My experience is that many trading problems occur, not because of traders' weaknesses, but because their strengths do not align properly with their trading. In an upcoming post, I will update the Trading Coach project and illustrate this concept. Interestingly, very few trading coaches/psychologists seem to spend a great deal of time assessing specific trading and personal strengths. The assumption seems to be that, if you address a weakness, you'll then succeed.
The opposite approach is that, if you build strengths, you can work around your shortcomings.
Let's try a little exercise. Below is a list of strengths from the VIA survey. Identify what you consider to be your five greatest strengths from this list and jot them down:
creativity, curiosity, open-mindedness, love of learning, wisdom, bravery, persistence, integrity, vitality, love, kindness, social intelligence, citizenship, fairness, leadership, forgiveness, modesty, prudence, self-control, appreciation of beauty, gratitude, optimism, humor, spirituality
Once you've written down what you believe to be your five greatest strengths, now--next to each of these strengths--write down how you specifically employ that strength in your day to day trading.
What I find is that, sometimes, how a trader is trading does not make concrete use of his or her greatest strengths. As a result, the trader is pulled two ways: toward what he or she "should" do according to the chosen trading style and toward what comes most naturally as a personal interest and strength. This is not a problem with discipline per se; it is a problem of a lack of fit between trading approach and personal competencies.
It is not necessary for trading to actively engage all your strengths. If many of your top strengths are not regularly utilized in your trading, however, two consequences are likely to result: a) you will not be as successful as you could otherwise be; and b) you will likely find trading less than fully satisfying and will not sustain the motivation to develop yourself fully.
In our Trading Coach project, Trader C. is running into some difficulties that have reduced his profitability. As we shall shortly see, it is his strengths that are getting in his way. In an upcoming post, I'll show what we're doing to remedy that situation.
