Here, I'd like to focus my study on one of the chapters regarding how to overcome weaknesses of a trader's personality. In order to identify a trader's strength and weakness, the book presents a series of questions in the following 4 aspects to categorize trader's personality, depending on the answers of the reader:
- How does the energy come from: Introversion or Extroversion
- How are decisions made: Intuition or sensation
- What kind of attention is used: Thinker or feeler
- What kind of lifestyle of a trader: Judging or perceiving
As an example, the trader with the following set of personality has specific strength and weakness as shown in the table below.
|
|
Strength
|
Weakness
|
|
Introvert
|
Informed decisions; thorough in analysis
|
Analysis paralysis; less comfortable trading with a
team
|
|
Intuitive
|
Good chart reader; look for relationships
|
Deviate from rules; overuse indicators to support
biases
|
|
Feeler
|
In tune with market; understand big picture; trade
with good accuracy
|
Stick to losing trades; emotional; too many bearish
trades
|
|
Judging
|
Decisive; self-starter; take action quickly; good
risk management skills
|
Susceptible to noises; not taking advises
|
The book gives some other insights beyond the typical baseline solution of imposing trading discipline: create specific trading rules and environments so that the weaknesses have minimal chances to show up in the trading process. This methodology, rather than trying to correct the weakness, should help to overcome the weaknesses since trader's personality is likely to remain over a long time in the trading career.
It's stated that the root cause of all weakness is the fear and greed. The only way to remove this element completely is not to care about profit and loss. Trade the amount that is totally comfortable for you if you face maximum loss. Personally, I think we can also avoid looking at the P&L all the time, by not showing the P&L in the trading software windows during trading battles.
For intuitive decision makers who like to look for evidence to support some trading biases, this type of traders needs to simplify the indicators to just one or two. For feelers whose trading action may be clouded by emotions, they need to calm down or look for the trades opposite to the extreme mood. For the judging traders, they may get out of trades too early due to market fluctuations. So they may trade a basket of positions so that the overall portfolio does not produce extreme losses.
I don't think there are any recommendations about how to tackle the shortcomings of introversion in the book. Personally, I think the establishment of simple but specific rules would help minimize the analysis paralysis. Actively participating group discussions should also make it more comfortable for taking advises.
Overall, this book of "Professional techniques to create generational wealth" provides an extensive range of topics on trading successfully as a professional trader. If a trader would like to deep dive into any one of the individual topics, he can find other books on each specific topic with similar length.
