What Type of Trader Are You? Try Tharp Trader Test

Many experts will tell you that there is not one way to make money in the investment world.  Many experts employ various strategies that suit them best in order to beat the market.  Well, have you ever wondered what type of an investor you are?  What fits your personality the most? What are your strengths and challenges?  If you’ve pondered these questions, try The Tharp Trader Test.

As described by the site:

Dr. Van K Tharp, armed with a Ph.D. in psychology and several losing experiences in the market, realized that perhaps the poor results that he’d been getting in the markets had more to do with him than the markets themselves. So in 1982 the quest began for how he could become a better trader. He conducted in-depth research to determine the qualities that great traders and investors had, and his research uncovered ten distinct areas that were important to investment/trading success.

These studies led to the creation of a 176 question test called the Investment Psychology Inventory Profile based around these ten areas, and after testing thousands of traders over many years, it has proven to be a great indicator of success in the markets.

The Tharp Trader Test is a mini version of this extensive test that is designed to provide a snapshot of the various types of traders that Dr. Tharp has identified. Each of the types has its own temperament, personality, perception and interpretation that ultimately affect how the market is approached and traded. Some have a distinct set of core qualities that are great for trading, whereas others may find trading more of a challenge. There is no right or wrong trader type; it is merely an identifier of possible patterns that could enhance or block success in your trading, relationships and all areas of your life.

This is not a test to determine what type of trading you should be doing, or what time frame or markets you should be trading. Nor does it discuss the methods, techniques or systems that suit your trader type. All of these things are an individual choice based on your own objectives and lifestyles, which may differ greatly based on your age, location and circumstances. The test will, however, address how you most likely gather, store, comprehend and act on information about the markets. It will also provide you with details of commonly observed strengths and challenges of each type and subsequent solutions.

With only 35 questions, the Tharp Trader Test is not an exact science and some people may find that their answers place them on a borderline between two different types of traders. Because this is the mini-test, if you become really stuck, go back and re-do the test with the opposite answer and see if your trader type changes at all. If so, then read the solutions for both trader types and determine which traits resonate with you the most. This will enable you to deal with the strengths and challenges that most adequately represent your situation. Then you can work toward becoming the best trader or investor that you can be.

Here’s my result:

Innovative Trader

Your goal is probably to understand the world, constantly absorbing new information that comes your way. You then process all of this through your intuition to quickly size up what is going on around you. This can be an excellent quality for traders and investors if you get the right information. Otherwise your decisions and conclusions may tend to be flawed. And this could be costly for you as a trader.

You are probably quite quick in your thinking, stimulating and alert. You are an ingenious innovator. In addition, you are probably quite outspoken. You are also probably good at reading other people. However, your ability to express yourself with others and read others is not required as a trader.

Nevertheless, you have two of the three qualities that I would expect to see in great traders. As a result, you are also adept at generating conceptual possibilities and then analyzing them strategically. This is a great quality that you have that will help you in developing sound trading systems.

You enjoy being both an inventor and a business owner, therefore the idea of developing your own trading system and doing your own thing probably appeals to you. However, you are a big picture person and do not always follow through on existing ideas.

Your biggest weakness is that you get bored by routine and are likely to find new ways of doing things. After pursuing trading and learning the craft, you may keep looking for creative alternatives trying to make things better or more effective. It is important to realize that good trading tends to be quite boring, so you must find ways to overcome this tendency and accept trading for what it is.

Trading Strengths

1. You can quickly determine if a new style of trading or system will fit well with your personality and you get very excited about it.
2. You can rapidly evaluate when something is working for you.
3. You like the challenge of sorting out market conditions and seeing where you fit and can be competitive in the markets.

Trading Challenges

1. You want external confirmation for everything and have a strong need for a mentor.
2. Despite your normal attention to detail and rational thought processes, you may find your self making emotional decisions when under stress; with dramatic consequences.
3. You may experience profound negative self talk if you bend your rules. Self inflicted emotional scars from negative trading may be damaging psychologically.
4. You may be tempted to abandon systems prematurely that are performing well but which are going through a string of losses.