Discussion in 'Psychology' started by efficiency, Mar 1, 2006.

  1. In the interest of self-awareness, the predator/prey scenario, the Pareto principle, and provide a little levity, forthwith is a list of investor and trader "classifications". We ALL fall into at least one category.

    1. ETERNAL OPTIMISTS: Can't lose and IF losing, doesn't cut their losses. Pride in the buy and hold and long term investor (by default rather than design) concepts.

    2. HYPERACTIVE: In and out with no NET progress. Addicted to random returns and immediate gratification. Money made on one is pissed away on the next.

    3. PLUNGERS: Everything into ONE position. Eh...... less than a smooth equity curve.

    4. GROUPIE: Buys WHAT well-known people are supposedly buying. In the US, Warren Buffett comes to mind.

    5. PRUDENT: Execution governed EVERY step of the way. Trigger often isn't pulled. Late entries. Selling too soon. Not enough position size to capitalize when one is correct.

    6. EDUCATED FOOL: Bound to THEORY but limited in practice. This may include redundant indicators. Using (5) different oscillators which basically portray the "same" thing.

    7. HEDGER: Not to make money BUT to preserve capital OR avoid paying tax.

    8. TAG-A-LONG: "I'll buy WHATEVER you're buying". This would include getting "advice" from message boards television shills, and even friends/neighbors/relatives/co-workers/Shoeshine Boys and Cab Drivers. A less selective variation of #4 the Groupie.

    9. MARKET MASOCHIST: Someone to BLAME, such as the evil short sellers, manipulative market makers or the government.

    10. CONTRARIAN: And contrary for JUST the sake of being contrary. Not necessarily wrong, but often very early. A stock's too high, it must go down.

    11. SERENDIPITY: Bought the bank stock BECAUSE the tellers are nice. Yesssssssss, there are people like this.

    12. GREATER FOOLS: AFTER the fact. The proverbial bagholders. Each share is always owned by someone. They provide a necessary function in the distribution of paper.

    13. TRENDY: Owns/buys what is in FASHION. Microsoft 10 years ago, Google at present. A case could be made for RIMM too.

    14. "INSIDERS": Has the proverbial brother-in-law that KNOWS something. Unfortunately, not enough.

    15. EGOTIST: Takes more satisfaction from being RIGHT than from adding to their equity.

    16. SCALPER: Takes advantage of MOB psychology and doesn't over-stay the party. Repetition and familiarity. Hmmm, helps to have a floor seat to minimize transaction costs.

    17. KAMIKAZEE: EXTREME version of #3, the plunger. Can you say fully margined? Total disregard for position size and risk.

    18. OPINION HUNTER: The MAJORITY knows best and their is safety in numbers. Basic herd instinct. This may include the feeling left out at the open. Opposite of #10, the Contrarian.

    No doubt, you the reader can think of some more (which is another reason why I typed this). I'd like to be aware of those I haven't pondered.
  2. squeeze


    How about the:

    The Celebrity Student; Spends all their time and money going to courses run by celebrity trading gurus.

    The Lazy trader; Spends all their money buying trading systems that don't work
  3. Very nice summary, thanks for posting it!

    I also like such segmentations, but for the sake of my nerves, I prefer to divide market participants into those that "get it" and those who don't.

    Saves you plenty of time and nerves whenever you run the risk of getting involved into a "discussion". :D

  4. Thanks, though not to be confused with an eternal optimist, like any good scientist with a piff helmet and butterfly net, I was HOPING to discover new species. So I can determine I'm not one nor becoming one.

    The get it versus those that don't get pertains to the Pareto principle, though in some arenas, the respective proportions might be 90/10.

    I also neglected to mention under the Kamikazee the cliche "there are old traders, there are bold traders, but there are few that are both".