When we talk about personality types, most people fit into two broad and relatively well-known categories; namely ‘extrovert’ and ‘introvert’.
Each has very different characteristics, although it’s fair to say that they remain susceptible to a variety of misconceptions.
There has also been an historic debate about which personality type best suits the world of trading, particularly in volatile marketplaces such as forex.
In this post, we’ll consider the core dimensions of introversion and extroversion, while asking how the Myers-Briggs personality test can help aspiring traders to understand their key characteristics.
Is There a Perfect Trading Personality Type?
The short answer to this question is ‘no’, especially when you consider the various assets and investment vehicles that exist even with the forex market.
For example, major currency pairs such as EUR/USD and USD/JPY are considerably more stable and predictable than more exotic and less liquid assets, making them more suited to risk-averse investors who are a little more cautious in their approach.
The reverse proposition is also true, creating a scenario where different personality types and appetites for risk can achieve relative success within the forex market.
To help shed further light on this, the Myer-Briggs Indicator (MBTI) serves as a self-questionnaire that explains how people manage their energy, process information and approach decision making, with scores awarded across four continuums. These are introversion (I) or extraversion (E), sensing (S) or intuition (N), thinking (T) or feeling (F), and judging (J) or perceiving (P).
For those who qualify as ISFP personality types, they’re categorised as being introverted individuals who are detail-oriented, instinct-driven and capable of thriving in less structured or creative environments.
Conversely, an ENTJ personality type would be classed as an extrovert, who’s more big picture in their decision making and prefers rational objectivity over thinking.
Similarly, they thrive in more structured and orderly environments, while enabling them to benefit from higher levels of focus and concentration.
Finding Your Own Pros and Cons as a Trader
By undertaking this type of test, aspiring traders can understand their core strengths and weaknesses, helping them to arguably formulate viable trading strategies that suit the way in which they think and process information.
These findings can be further honed when utilising demo accounts, which is where you’re able to test and optimise said strategies in a simulated, real-time and completely risk-free environment.
In the case of introverted traders, they’ll essentially manage their energy internally, by focusing on their inner voice of ideas, theories and abstractions. As a result, they’ll use market data and action to measure and define facts over time, which are then aligned into their internal thinking to execute decisions.
For extroverted traders, they find meaning in people and the world around them, with interaction helping them to formalise decisions and execute orders. Interestingly, there’s a need for affirment that encourages extroverts to take decisions in teams, following collaborative discussion and idea generation.
While both personality types have pros and cons that can succeed in the forex market, it’s inarguable that introverts are more suited to ‘going it alone’ when operating in this space.
The reason for this is simple; as they’re much better at processing information and executing decisions on an individual basis, while relying on the collation and analysis of detail that drives the most seasoned traders.
