Personality and Trend Following

Personality and Trend Following - Personality and...

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Personality and Trend-Following Brett N. Steenbarger, Ph.D. I would describe my approach to trading as research-based trend following. By that I mean that I attempt to ride strength or weakness in the market after it has been manifested. I do not, however, automatically assume that any trend is my friend. Instead, I use historical research to distinguish between trending movements that are likely to continue and those with a high probability of reversal. This is a highly disciplined approach to trading in that it requires significant research and preparation time, as well as an ability to stick with market movements and one’s game plan. In my book The Psychology of Trading , I referred to personality traits that tend to distinguish successful traders from less successful ones. Several of these traits are also likely to influence the degree of success traders are likely to have in adopting a trend- following approach to trading. Below are several self-assessment questions that might be useful in determining whether you’ll face particularly great challenges in riding market trends. Please write down “yes” or “no” answers to each of the twelve questions before reading further: 1. When something goes against you in the market, do you often find yourself venting your frustration? 2. Do you enjoy (or as a child did you enjoy) roller coasters or other thrill rides? 3. Do you often find yourself procrastinating over work? 4.
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This note was uploaded on 08/11/2009 for the course FINANCE Fixed Inco taught by Professor Proflim during the Three '09 term at University of Adelaide.

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Personality and Trend Following - Personality and...

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