|
|
|
|
|
|
|
trusting the opinion of people whom they don't even know and whom may not know any more about the stock than they do. |
|
|
|
|
|
|
|
|
They are not able to trust their own due diligence and then make up their minds as to how to proceed. This inability to trust their own judgment can make for arbitrary decisions, unreasonable risk taking, or becoming paralyzed and unable to take action in a timely manner. And it may happen again and again. |
|
|
|
|
|
|
|
|
So, a particular personality weakness, in this case the inability to trust your own analysis, judgment, and decision making, forces you to seek the approval of others before taking action. And yet you may not actually realize this is what you are doing! |
|
|
|
|
|
|
|
|
Here's another example. If you happen to have the kind of heavy risk-taking personality that likes to always be in the action, you will tend to err on the side of making too many trades. You will go about your merry way as a day trader without any awareness that being in the action and feeling the flow of adrenaline rushing through your body is what the trading is all about for you. |
|
|
|
|
|
|
|
|
Yes, you will say you are doing it to make some money. And consciously, that is true. But the thrill is in making the trade, and it is this that unconsciously pulls you. If you have no awareness that this tendency is operating, you will make hundreds of trades and often have little or nothing to show for it. In fact, it is clear from studies that track the trading records of day traders that the greater percentage lose a good deal of their initial stake. And they lose not only their initial stake, but continue to lose even as they become more experienced. |
|
|
|
|
|
|
|
|
For example, a study just released by the North American Securities Administrators Association concluded that only 11 percent of All-Tech traders (a large day trading firm) make money consistently. |
|
|
|
|
|
|
|
|
My point is that you need to know something about your own personality tendencies and how they affect your trading behavior. So, with this in mind, let's now turn to some broad types of investing and the personalities that go with them. |
|
|
|
|
|