Q: I recently took a leadership class which explored our personalities. We took the Myers-Briggs as part of the class, and I tested as an ESFJ. Do you have an opinion as to what kind of Myers-Briggs "type" makes a good trader?
Maybe that would give me some insight and understanding into the psychological obstacles I need to overcome as I develop as a trader.

A: Three personality types—the ENTJ (known for their ability to develop strategies), the INTJ (known for their scientific reasoning), and the ISTJ (the trustee type person)—combined should constitute about 12% of the population. However, at this time these three groups represent 50.1% of our current sample (our client base). The NTs constitute 45.6% of our sample, probably because these people are always attempting to improve themselves.

To learn more on how personality type relates to trading and how to strengthen your skills in areas that are not part of your "type" (such as NT), go to our Site Map on our website and read the free article on personality and trading type or follow this link: http://www.iitm.com/articles/Personality-Type-and-Trading.htm.

Posted by Van K Tharp at 06:35 PM | Permalink | Comments (0) | TrackBacks (0)

A: In your book Safe Strategies for Financial Freedom you recommend doing an expectancy analysis on newsletter services based on the last 50 trades. Then once you select the service, to follow every recommendation they make. What happens when all of my money is tied up in the market from all of the recommendations and the service makes additional recommendations? Should I sell the lowest performing issue in my portfolio and invest it into the new recommendation?

Q: Your issue is really a position sizing issue. Answers to position sizing questions depend upon two issues: 1) what is the quality of the system (i.e., newsletter) that you are trading; and 2) what are your objectives. You haven’t given me enough information to determine either so it’s impossible for me to really answer your question.

However, if you are determined to take every trade and your portfolio is full, then it might suggest that your position sizing per position is too large. That being the case, either 1) start taking smaller positions; 2) sell losing positions; and 3) be very careful about new positions. I strongly recommend that you only take new positions if they have been going up over the last two months. Never buy a new position that is in a downtrend.

Posted by Van K Tharp at 03:56 PM | Permalink | Comments (0) | TrackBacks (0)