The Traders Journal

You Do Want To Be A Type D Investor!

Gatis Roze | 

I have two things in common with Richard Sherman, the Seattle Seahawks’ Super Bowl star.  We both graduated from the same university and we both have two personalities.  Sherman articulated that fact nicely the other day when he explained to the press corps that he has his game face for interviews, team functions and on-field athletic efforts.  His game face is how he makes his living and what he shows to the public.  His other face is for family and friends, and he doesn’t care to share that side of himself with anyone outside of his inner circle.  

As an investor and trader, I, too, have both a game face and a private face.  For 6.5 hours a day, I’m in my stock market trader mode and it’s all about me.  I am wearing my game face.  I am one of the ‘haves’ – everyone else is a ‘have-not’.   It’s the selfish mindset that  I literally wear for those 6.5 hours, but hopefully only for those 6.5 hours, 5 days a week.  It’s most apparent when I’m actively putting on a trade or literally taking money off the table.


Metaphorically, I often elbow my way onto a crowded train just as it’s leaving the station or as my equity is breaking out into a new high.  And watch out when it comes time to exit.  Once again, I’ll elbow, push, shove my way through the crowd so I can sit close to the exit and sell my position before the crowd even realizes the train is slowing down or nearing the station.  Steer clear of me for 6.5 hours a day, but don’t assume that’s the only ‘me’.  

This is a metaphor for how I think about trading.  I suspect most of us live life amongst a series of personal metaphors and anchors.  Selfish behavior for 6.5 hours a day is part of my me-first metaphor.  If attitude gives you traction, I say “go for it”.  It provides a sort of certified edge.  What makes this so powerful and unique is that this actually releases my stress because I realize I’m role-playing.  I role-play the self-centered investor, self-focused and hyper-vigilant to potential threats to my position.  

Trading the markets as what I like to call a ‘Type D’ (Dual Personality) has its advantages and strengths.  Type D investors empower their investor selves with a calm steadiness.  They never get moody or vacillate or act strange.  Reserve the strange behavior for your social-self side.   That’s where you can act differently and exercise your bravado or flex your ego, if you must.  

Type A (Average Investor) will try to trade the stock market as a single-dimension human being.  You might as well be a grenade because you will almost certainly blow up like one.   The issue with Type A investors is that their behavior is driven by a need for short-term satisfaction, and inevitably the great Wall Street disinformation machine convinces them to do exactly the wrong thing at the wrong time.  

So, I suggest you face up to it sooner than later and embrace a Richard Sherman Type D personality or a similar metaphor with respect to your investing.  If you do, both halves of your life will improve!

Trade well; trade with discipline!
-- Gatis Roze

 

Gatis Roze
About the authors: , CMT, holds an MBA from the Stanford Graduate School of Business and is a past president of the Technical Securities Analysts Association (TSAA). He is also the co-author of Tensile Trading: The 10 Essential Stages of Stock Market Mastery (Wiley, 2016). A full-time investor for over 25 years, Gatis has taught sold-out investment courses throughout the Pacific Northwest and beyond since 2000.

Grayson Roze
is the author of Trading for Dummies (Wiley, 2017) and Tensile Trading: The 10 Essential Stages of Stock Market Mastery (Wiley, 2016). He has worked in the financial services industry for StockCharts.com since 2012, and now serves as the Business Manager for the company. He holds a Bachelor's degree from Swarthmore College.
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