The first psychological trader profile we will examine in our series on Van K. Tharp’s personality types is the Accurate Forex Trader.
This trader is the type of person that pays much attention to details. As traders, they like to keep detailed records of all important matters related to their trading and then analyze this information.
It is a tremendously valuable characteristic for traders and with determination and dedication, the accurate trader has very good chances of succeeding in Forex trading over the long run.
Characteristics of the Accurate Forex Trader
These are individuals that are generally very realistic, responsible and reliable people in everything they do. Basically, when they know what needs to be done you can be sure that they will get it done well – often surpassing expectations and duties.
As the term itself describes, the Accurate Forex Trader wants to have accurate historical records of the important trading-related details and as a result, they will have no problem with keeping a regular trading journal. This is an excellent habit for any trader because it speeds up the learning process as traders reflect on the gathered information and then refine their trading techniques.
In trading, they can execute a trading plan in a perfect manner just as it was designed to be traded and this is one of their strongest points.
However, while they do well in analyzing each trade in-depth, the accurate trader also tends to actually spend more time in analyzing and researching the market rather than in trading it which is a potential weakness for them (see trading challenges section).
The advantages of the typical Accurate Forex Trader are related to their superior ability to be precise and to thoroughly collect and record trading data which can be analyzed to filter out potentially good trading opportunities.
These types of traders will have the best performance if they can trade with a trading plan that is first tested and profitable.
For best results, such a trading plan would have clear parameters for initiating and closing positions.
In essence, it should be detailed enough to enable the trader to take appropriate action in any situation without having to think too much about what needs to be done. The trading plan can be based on fundamentals or technicals, and complexity is not a problem for the average accurate trader as they are normally very detail oriented people.
However, as we often know, things in the markets are not so straightforward and exact and markets often behave in irregular and unexpected ways. Grasping this concept is something that the accurate trader may struggle with and may need to work on improving.
The Accurate Forex Trader type has a tendency to focus too much and analyses the reasons behind a trade which can subsequently lead to them hesitating excessively when the time to take the trade comes.
This trait of Accurate Forex Trader personality type can practically curtail the effectiveness their thorough and well-conducted analysis. Basically, this happens when they are not able to quickly and efficiently execute trades – both in entries and exits.
Essentially, first, they need to realize that this behavior is occurring and then look at every trade objectively and work to improve on this point.
Second, they need to realize that trading concepts can be quite abstract and trading is often more an art than a science.
In fact, being good with numbers is not a great predictor of trading success hence there is no need to be so focused on the exact numbers.
Overall, the accurate trader personality type possesses characteristics that are crucial for success in Forex trading but needs to work on getting in tune with the market and with the larger picture.