The Mental Strategies of Top Traders: The Psychological Determinants of Trading Success

2.4. PERSONALITY FACTORS AND GOAL-SETTING

Remember, as a trading coach I am not interested in trying to change anyone's personality. I am somewhat skeptical as to whether people can in fact change that much even when they are motivated to change. But, I believe people can learn the way in which they are hardwired so that they can understand a bit better why they are acting and reacting the way they are, how they can compensate for some of those negative characteristics, and how they can exploit or maximize the use of their natural strengths in the performance process. If they can get some consciousness about themselves, they can move their game to an entirely new level.

Let me expand on this a bit more in terms of a few different traders and how their own personality factors influenced the way they were trading. I will then discuss some generic principles that one master hedge fund manager looks for and examine in greater detail some of the personality factors that color or influence the way in which a few more PMs function by way of understanding the complexity of the process.

Establishing a goal can sometimes be tricky, especially when you factor personalities into the equation. A cautious or fearful trader, for instance, may be reluctant to establish a goal that he considers too risky. For example, Mike had a difficult start to the year but had finally come out on top. He made $7.5 million the previous month and was up about $18 million for the year. Because of his success, ...