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     holycow
Member
Username: holycow
Post Number: 642
Registered: 08-2004Rating: N/A
Votes: 0
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| | Wednesday, January 05, 2005 - 12:43 pm: |  
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Here is something interesting for you if you think you are a good or a bad stock trader...
Using interviews, questionnaires and tests, the researchers tried to find the personality traits that make some traders more successful than others. ``Personality accounts for significant variation in earnings,'' the investigation found. ``The higher performing traders in our sample are emotionally stable introverts who are open to experience.''
...
``The results produced a statistically significant negative association between illusion of control and both total remuneration and desk profits, but not risk management, analytical ability or people skills,'' the authors wrote. ``There is a clear case for saying illusion of control is associated with poorer performance and lower earnings.'
In other words, while the traders fooled by the graph were as competent as their less gullible peers, their earnings were typically lower.
Thick-Skinned Introverts
When everyone else is selling, there's often money to be made by buying, and vice versa. You have to have a thick skin, though, to go against the crowd. ``Introversion insulates traders against social distractions including the need to be liked and accepted; useful especially where there is a need to seek or tolerate contrarian positions,'' the academics said.
... yes, they have some good advice too:
-- Trade more often; the study suggests the best way to test a market hypothesis may be to implement it in a trade, securing long-term learning benefits from taking on short-term risks.
-- Spend as much time examining your profitable trades as you do autopsying your failures.
-- And try to stay cool when your spreadsheet is awash with losses. Losing money makes you want to ``avoid its recurrence at all costs,'' the study says, even when random events are the cause. In other words, sometimes, stuff happens; it's not always about you.
So do you reckon you have what it takes?
HC
"... if you've got a chart, I have an opinion!"
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