Myers-Briggs Personalities and Binary Options Trading
Have you ever taken a personality test? One of the most well-known and commonly used tests out there is the Myers-Briggs Type Indicator (MBTI) test. This test is based on the work of Carl Jung, who had a theory that there are four psychological functions which we use as we go through life. The Myers-Briggs types and test were developed by psychologists Katharine Cook Briggs and her daughter Isabel Briggs Myers. The test, originally developed during World War II for women entering the workforce, is still used today by students trying to decide on a major or career. It is also used by psychologists to help their patients.
Understanding your own personality can make you a better binary options trader. There is no one perfect method for ascertaining your own personality, and the Myers-Briggs test is just one type of analysis. Since it is such a common type though, many people are familiar with their own Myers-Briggs types. There are 16 types based on four dichotomies:
• Extroverted (E) vs. Introverted (I)
• Sensing (S) vs. Intuitive (N)
• Thinking (T) vs. Feeling (F)
• Judging (J) vs. Perceiving (P)
So for example, you might be an ESTJ, or an INFP, or an INTP, or an ENFJ. There is no single “best” personality type; each type has different strengths and weaknesses. Those strengths and weaknesses can influence how we work and relate to others, and even to ourselves. How can your Myers-Briggs personality type impact your trading?
Extroverted vs. Introverted
Are you an introvert or an extrovert? A lot of people think about social situations when they consider this question, and base their answer on whether they are more social and outgoing (extroverted) or tend to prefer isolation or a few close relationships (more introverted).
Extroversion and introversion also relate to the way we soak up knowledge though and relate to the world in general. Extroverts, in general, tend to prefer breadth over depth. Introverts are the other way around. An introvert is more likely than an extrovert to plunge deeply into an obsession and learn everything possible about it, while an extrovert is more likely to cultivate a variety of interests and passions—but perhaps not delve as deeply into any of them.
How does this relate to your binary options trading? If you are an introvert, you may have some advantage in learning how to trade. Your highly driven, detail-oriented nature may help you to focus on learning a trading system very well and not get distracted by all the other methods or approaches out there. The danger though is in missing the bigger picture—or learning something new when it becomes necessary. The extrovert is more likely to understand the broader context of trading, and may feel more comfortable pulling himself or herself out of the comfort zone when necessary to explore new methods for placing trades.
Sensing vs. Intuitive
This is about how you gather information. Those with sensing personality types trust information which is concretely available to their senses. Intuitive learners on the other hand tend to be more trusting of theories and abstract principles. They may excel at intuiting something based on a past experience or an unconscious recognition of a pattern that they see.
In trading, once again, there are advantages and disadvantages which come with either method of information-gathering. Sensing traders will trust the evidence of their senses and distrust hunches, which means they are more likely to rely on their trading systems and less likely to make discretionary calls. This can help them to remain focused and avoid random behavior. On the other hand, intuitive traders are more likely to understand how a given trade fits into the context of the market, and pay attention to important mental cues to pay attention to a given situation which they may not yet consciously understand.
Thinking vs. Feeling
Thinking and feeling involve how you process the information you picked up through your senses or intuition, and how you then use that information to make decisions. Those who favor thinking tend to be more logical and detached, and make rational decisions based on rules. Those who favor feeling usually make decisions based on harmonious outcomes.
In trading, thinking is almost always superior to feeling, because your goal is to make objective, rational, consistent decisions—not to trade on emotion. Those who tend toward feeling will want to take extra care that their emotions do not drive their trading decisions, and that they take time to hone their thinking.
Are there any advantages which come with the feeling personality type with trading? Arguably, there is at least one. Someone who considers harmony and balance and his or her own personal needs—as well as the needs of family members, friends, and employers—may be more likely to balance trading with life, and may be less likely to develop addictive or workaholic tendencies. This may not be the case if emotional trading leads to addictive behavior. But if a feeling trader can learn how to think while actually placing trades and feel when scheduling work, a potential weakness can instead be utilized as a strength.
Judging vs. Perceiving
This is not actually a separate category of traits. It actually refers to whether a person leans toward information gathering or information analyzing and subsequent action. If a person leans toward sensing or intuition, they are considered a perceiving personality type. If a person leans toward thinking or feeling (putting what they discovered into action), they are considered a judging personality type. According to Myers and Briggs, judging personalities like to have matters settled, whereas perceiving personality types prefer to keep options open.
How does this relate to binary options trading? Traders with judging personalities generally will have an easier time jumping into action. They may struggle less with the question of when to “pull the trigger” on a trade. Traders with perceiving personalities, on the other hand, who like to keep their options open, may have a harder time committing to a trade setup when they spot one, or accepting that the evidence of their senses or intuition is sufficient for action. They may also have a hard time deciding whether to close out of a trade early or not—or they may lean toward early closure more often than they should in an effort to be more conservative.
Traders with judging personalities may err the other direction; they may be too swift to leap to conclusions about trade setups and may overlook important factors in their analysis before they leap into action. Perceiving traders may benefit from the fact that they are less likely to be risk-takers.
Hone Your Strengths and Seek Balance
From reading this analysis of the different personality trait dichotomies, you should be able to see how different personality traits can impact trading in both negative and positive ways. There is no personality trait that is ideal for trading. No matter what kind of person you are, the trick is to figure out your personal strengths and weaknesses, and how your personality is likely to impact your binary options trading activities.
Once you know yourself and know the potential pitfalls you could face, you can be alert for those pitfalls and start noticing patterns in your own behavior as you are learning as well as testing and placing trades. You can trade this in your trading journal. You can also become more aware of what you do well, and how you can take advantage of your positive traits to get even better at binary options trading.
It is important to strive for balance. Whether you are an introvert or an extrovert, sensing or intuitive, thinking or feeling, judging or perceiving, you want to cultivate the best in yourself—but also learn how to see the world and relate to it from different points of view. For example, if you are an introvert, and you excel at delving deep into a trading system and learning it inside and out, that is wonderful. But it is also a great idea to cultivate some extroverted qualities, and learn how to search for new strategies and explore a broader context outside your comfort zone.
As another example, if you are a sensing trader, and you do well making mechanical trades based on strict system rules and concrete evidence, then you should definitely continue to hone that strength. At the same time, though, you may want to learn how to think more intuitively and get a better grasp on market context based on your experiences. Integrating in those intuitive strengths can help you derive more from your trading method, even with concrete rules in place.
How can you find out your Myers-Briggs personality trait? There is an official test you can take if you are willing to pay a fee. Online you will also find plenty of free tests which are based on the Myers-Briggs test and should give you similar results. It does not take long to complete the test and find out your type. From there, you can read up on your type, and go back over this article. The more insights you gain into your own personality and identity, the more insights you gain into your binary options trading!