Did you read my last blog entry?  It was entitled, “YOU are the Holy Grail” in which I wrote about the three expressions or aspects of YOU and I used the analogy of a ship to make the distinctions between those three versions of “you.”   I referred to them as “me, myself and I.”  Let’s go into greater detail on that idea.

“I” as the “BIG I” is the omniscient character up in the crow’s nest of the ship with A Higher Point of View.  This YOU is the Holy Grail that everyone is looking for…outside of themselves. The “me” is “the Captain,” which is the you that is in charge of making choices and decisions.  “Myself” refers to the “little i’s.”   The “little i’s” are the saboteurs; they are the parts that have faulty subconscious programming. 

So, in the last article I said that the “BIG I” IS the Holy Grail.  In this article I will emphasize the fact that if the Holy Grail is YOU it’s imperative that you “Know Yourself!”  That phrase is the inscription that was written on the Oracle of Apollo of Delphi, Greece, 6^th century B.C., so the notion has been around a long time.

And WHY is it so important to know yourself?  That’s a fair question.  I repeat – because YOU are the Holy Grail. Your power and clear decisions come from within, from an “Inner Self” that is powerful and wise.  You must learn to use your strengths more effectively and at the same time develop an awareness of your weaknesses and how to overcome them.

Interestingly enough, you might automatically assume that you know yourself, but that is definitely NOT the case.  You actually have to STUDY yourself! This is why there is such an emphasis on Trading Psychology at the Van Tharp Institute.  

An aspect of knowing “Your SELF” is gaining an understanding of your personality type.  Your personality type can cause you to win or lose in trading; you might have heard Van and I discussing this on one of his Trading Psychology CDs.  

We discuss both the Myers-Briggs Type Indicator as well as the Enneagram.  I believe that between these two personality typology systems, all behavior can be accounted for.  The Myers-Briggs deals with “normal” behavior, whereas the Enneagram covers healthy, average and unhealthy behaviors.

Carl Jung, a noted Swiss psychiatrist developed a theory of personality to explain the normal differences between healthy people.  He calls it your “Psychological Type.” Based on his observations, Jung concluded that differences in behavior result from people’s INBORN TENDENCIES to use their minds in different ways.  As people act on these tendencies, they develop patterns of behavior.  When YOU know your pattern of behavior, you can work at your peak.

Jung’s psychological type theory defines eight different patterns of normal behavior, or types.  These patterns of normal behavior result in what Jung and the Myers-Briggs Type indicator call “preferences” which are divided into for groupings, or “dichotomies.”  It is vital to gain a very basic understanding of how your personality strengths and weaknesses impact your trading. 

In this article, I can only briefly introduce the four dichotomies of the Myers-Briggs: Extravert/Introvert; Sensing/Intuition; Thinking/Feeling; and Judging/Perceiving.  Each dichotomy has its inherent strengths and weaknesses that need to be understood through further study and is a entirely different discussion; however, I will present a simple explanation of what each dichotomy reveals.

The Extravert/Introvert dichotomy has to do with where people (traders) PREFER to focus their attention and get energy.  The extravert is energized by the outer environment and people and likes to talk things out, whereas the introverts are energized by their inner world and like to work out ideas by thinking them through.

The Sensing/Intuition dichotomy refers to the way traders PREFER to take in information.  The Sensates are factual, concrete and focus on details and specifics.  The Intuitives see the big picture and patterns. 

The Thinking/Feeling dichotomy has to do with how traders PREFER to make  decisions.  The thinking types are objective, and solve problems with logic and analysis.  The feelers are subjective, display empathy and won’t make a decision until they assess its impact on people.

The Judging/Perceiving dichotomy deals with how traders deal with the outer world.  The Judgers (having nothing to do with the word “judgmental”) PREFER to operate in a systematic way, get closure and want control over their life.  The Perceivers like to stay open to change, let life happen and stay open to possibilities.

So, what does personality type have to do with trading?  Well, personality type influences your thoughts, emotions and actions.   And because your trading performance is driven by your thoughts, emotions, and actions (TEA), they MUST be consistent with achieving good trading results!   Have you ever been in the market and not worked your plan because some emotion came up and seemed to “take over” you thoughts? That’s one of those “little i’s” at work.  That is a weakness that both needs to be and CAN be overcome.

Let me give you an example of how a personality strength/weakness can actually lead one astray and away from his/her system.   I was working with a trader a few months  ago who was having difficulty following his system.  A lack of trust had arisen that 

was related to his being a “Thinking” type on the Myers-Briggs.  Usually, we see thinking and analysis as wonderful traits and positive assets for a trader.  However, that thinking CAN be a double-edged sword.

Let me explain.  For this trader, sometimes his “thinking” was causing him to actually NOT follow the rules of his system. What happened was that when events transpired in the market, instead of just following his system, he would begin to OVER-analyze the situation.  The more he analyzed, he would come to the conclusion that “he knew better” than his system, throw out the rules and consequently lose money.  We had to work with the part of himself that was relying his own thoughts and over-analytical assessments instead of his tried and true (back-tested) system.  Through our work together, he learned to use his analysis to his advantage as well as to trust his system to do what it was designed to do.

Both Van and I emphasize the importance of knowing your personality strengths. When you are armed with that knowledge, you can then capitalize on your strengths and eliminate your weaknesses.  Of course, it takes self-understanding AND inner work.  However, the reward is that you then have a definite EDGE in trading.   Have you already discovered through your own experience that your personality weaknesses are costing you money? Are you ready to take charge and fully utilize the YOU that is your personal “Holy Grail”?

I have alluded to the Myers-Briggs as one system of personality typing.  There is another typology system called The Enneagram, which literally reveals a “MAP” of trading psychology.   It is important to be able to locate where you currently are on that map and to know how to move closer to your destination of consistently profitable trading.  I will write about the “map” of the Enneagram in a future addition of the newsletter.

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