The Spontaneous Trader

The next psychological profile in Van K. Tharp’s series on trader personality types is the Spontaneous Trader.

Among the fifteen psychological trader profiles developed by Van K. Tharp, ten of them have a chance of overcoming their foibles to become successful traders. The Spontaneous Trader is among this lucky group of traders.

This trader type would suggest an individual who tends to think and react quickly when trading.

Spontaneous Trader Qualities

The Spontaneous Trader has one of the three core qualities essential to the make-up of a successful trader. Specifically, this is the ability to see the big picture and to make connections between relevant market elements. 

Nevertheless, while Spontaneous Traders tend to be quick to think and quicker to react, this may impede them from performing more time consuming analytic evaluation to confirm their trading ideas.

Also, while Spontaneous Traders may be exceptionally adept in initiating positions, they will often demonstrate difficulty in following through and completing their trading plans when taking profits or otherwise liquidating trades.

Trading Strengths

Spontaneous Traders tend to be enthusiastic and willing to take action and they generally have no problem pulling the trigger on a trade.

They also tend to feel quite comfortable trading new systems and have no issues with trying new systems out using small positions and real money.

Trading Challenges

The Spontaneous Trader’s main challenges involve maintaining their trading discipline, paying attention to the market and following through on existing trades.

They can help overcome these challenges by developing and implementing a trading system that will objectify and perhaps even automate their trading activities.

Also, external stimuli could distract and influence the Spontaneous Trader if they are not aware of this tendency. Such traders may also tend to seek the approval of others instead of relying on objective market data and their own analysis.