The Values Driven Forex Trader
The last type of trader that we will discuss in our series on Tharp’s trading personality types is the Values-Driven Trader.
According to Dr. Van K. Tharp, these traders fall in the average group of 10 trader types who have relatively good prospects for becoming profitable if they are willing to work hard for it.
Values-Driven Forex Traders are generally independent individuals that are able to make good and rational decisions. They tend to be realistic, they know what their values in life are and they are mainly driven by them – including, to a large degree in trading as well.
Generally, those values for them would be people and relationships, life principles and material possessions.
Values-Driven Forex Trader Qualities
These individuals are passionate about making money which is a good and suitable characteristic for a trader. This drive to make money can be a factor that motivates them to be persistent until they succeed.
In addition, Dr. Tharp specifies that they possess two of the three key characteristics for a trader as determined by his research. Those are:
- Being able to comprehend the “big picture” and connect the different important points in it in order to use that information to profit in trading.
- Being good at making logical and analytical trading decisions based on concrete – factual information.
Values-Driven Forex Traders, however, have a tendency to have their principles or values affect their decision-making process which can, in turn, lead to dissections made based on their value system rather than pure logic and analysis. While staying true to your values may feel right, sometimes it can lead to making the wrong trading decisions.
Forex traders of the Values-Driven type are normally able to understand even the more complex market concepts and theories which greatly helps them to be better traders. They are able to see the big picture and can take good trades based on it.
These traders also have a strong sense of independence which mainly comes from their values and principles for which they deeply care.
They are mainly motivated by their values in everything they do, so it’s very important for them that their values are in line with their trading goals in order to achieve their maximum potential.
Values-driven Forex traders can even be good at generating new trading ideas and even new trading systems.
Traders of the Value-Driven type may be susceptible to flaws due to groupthink. While they can be very independent and generate independent trading ideas, they may also find themselves trading as someone else recommended them rather than according to their analysis.
This can, of course, can lead to problems because trying to copy others is often misleading and in most cases, it’s less effective than trading based on a solid analysis of the market situation.
Values-Driven Forex traders may also avoid or fail to take good trades because those trades may not be aligned with their most important values and principles. In addition, they may sometimes take trades on intuitive feelings rather than logical analysis.
Finally, they can easily become frustrated – especially when there are getting less desirable performance with their trading strategies.