I am a Detailed Trader (or so the test says)
As part of my daily research into ways to help me advance my knowledge of stock trading, I came across a website, The Van Tharp Institute, which had a free test which suggested it would determine if “you had what it takes to pull big money out of the market.
The site of Dr. Van K Tharp also offers workshops, newsletters, videos and the like.
Anyway, I did the test and got a PDF of my results which identified me as a Detailed Trader.
Not that this was surprising. But what I got from it was that it went some way to validating the approach that I have decided to take with my stock trading. It also confirmed what I already suspect; that while I make logical decisions and am orderly, my love of detail makes it harder for you to grasp the big picture (and maybe pull the trigger and place a trade).
Happily, it suggests I have the potential to do very well in the markets—if I am willing to do a few things (my skeptic senses were aroused at this point).
The things it asks me to do is to:
- Take responsibility to understand the big picture and interconnected relationships;
- Treat my trading as a business, and;
- Develop a trading system that fits me.
All good. It’s exactly what I’m planning to do.
The report says their model of the Detailed Trader is Warren Buffett. Okay, sure. The question I have here though is whether Warren Buffett is indeed a trader or is he an investor. Mr. Buffett himself says, “I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for ten years.”
My goal as a trader is to attempt to make money on the stock market.
But, that’s fine. There’s worse things than being told you have a similar investment style to Warren Buffett.
On the positive side of things, as a Detailed Trader:
- I should have no problems staying with and executing a simple trading system,
- I should be good at data analysis and developing business plans, and;
- I could easily treat trading as a business.
Very happy to see all that.
Another thing that was pointed out is that trading can be a solitary and lonely business but that this is something that might actually suit me because I do not mind working on my own. It’s certainly something I’ve considered as a long-term issue but, they’re right, I don’t mind working on my ow.n
On the flipside:
- My love of the details might be misguiding if I follow the wrong guidelines;
- Under stress, I might tend to redouble your efforts in the belief that I can dig my way out of a situation, and;
- I can tend to be overly critical and only notice the negatives in my trading.
I can definitely relate to the last point. It goes on to suggest that I need to get clear on the various mistakes that I can make and learn to recognize them.
Interestingly, the report says one of my biggest challenges is that I have a distinct idea of what is right and I feel it is my duty to defend that. It suggests this can be a real problem in trading the markets where being independent and a nonconformist are important.
I’m not sure how I agree with that on a personal level, but it will be something I will keep in the back of my mind.
All in all, I thought it was worthwhile doing the test and I will follow up and watch some of Dr. Tharp’s video. I’ve also just put an order on his book, Super Trader: Make Consistent Profits in Good and Bad Markets