The Socially Responsible Forex Trader is the Tharp psychological trader profile that we will discuss in this post as part of our article series on traders’ personality types based on Dr. Van K. Tharp’s original research and work on this topic.
This kind of trader typically is someone whose concentration is mostly on ethics and the people that are valuable to him/her. Likewise, they tend to value having an enjoyable life overall, both in their work and social and family lives.
In his research on trading psychology, Dr. Van K. Tharp identified fifteen psychological profiles of traders. Further, he differentiates 3 sections of these 15 trader types each with different probabilities for success in the long term. The Socially Responsible Trader falls in the group of Forex traders that can succeed if they are prepared to put in a lot of effort in order to overcome their challenges and weaknesses.
Qualities of Socially Responsible Forex Trader
According to Van K. Tharp, Socially Responsible Forex Traders deeply care about their values and as a result, try to act only in a manner that is in line with those values regardless whether it is related to their social life or to their work as is trading.
The primary goals of the Socially Responsible Trader type are not only related to making profits but also protecting their values. A socially responsible trader, for example, may not trade or invest money in assets or financial instruments that may bring harm to others or to the environment – regardless of the potential profits it can bring.
So, although these traders may very well possess the needed capacity to trade and invest profitably, they may not always choose to do so if those investments are against their core ethical values.
Forex traders of the “Socially Responsible Type” will usually tend to have a very developed gut sense and intuition. Consequently, they tend to rely on it as it works very well for them most of the time.
It’s crucial for them, however, to combine their intuitive trading with a proper – solid risk management strategy in order to be consistent and successful in their trading results.
Following a risk management system is something they should be able to easily do in most cases.
Also, the Socially Responsible Forex Trader doesn’t seem to suffer from emotional trading as much as some of the other types, except when those emotions are related to their core values – as we discussed above.
As specified in the past segment, these kinds of traders rely a lot on their intuition and gut feelings. While it’s a great asset to have for those that are capable, still there are certain risks that using intuition may lead to.
This is why we suggested it’s crucial for Socially Responsible Forex Traders pay extra attention to their risk management approach.
Furthermore, this sort of trader generally must have a profitable and unbiased trading plan that will help them to limit the effects of holding onto losing trades which they may be inclined to do.
In the end, there are certain characteristics and habits that are desirable for all traders and Socially Responsible Traders should put in the work needed to overcome their potential weaknesses and get to the other side of successful traders.