The Judge

Trading Strengths

• Dedicated – Seeing things to completion borders on an ethical obligation for Judges. Tasks aren’t simply abandoned because they’ve become difficult or boring – people with the Judge personality type take them up when they are the right thing to do, and they will be finished so long as they remain the right thing to do.  In trading, this dedication is borne out in the thoroughness the Judge displays in learning the craft of trading and in the completeness of the trading plans they produce.

• Strong-willed – A strong will makes this dedication possible, and Judges don’t give up their beliefs because of simple opposition. Judges defend their ideas and principles relentlessly and must be proven clearly and conclusively wrong for their stance to budge.  This strong will allows trading Judges to calmly sit through the day-to-day noise of the markets and capitalize on the long-term trends.  

• Direct and Honest – Judges trust facts far more than abstract ideas or opinions. Straightforward statements and information are king, and Judge personalities return the honesty (whether it’s wanted or not).  This directness leads to solid, logical, rule-based trading.

• Loyal, Patient, and Reliable – Judges work to exemplify truthfulness and reliability, considering stability and security very important. When Judges say they’ll do something, they keep their word, making them very responsible members of their families, companies, and communities.  Loyalty and patience translate directly into their trading styles.  Judges are loyal to the trading plans they’ve created, they are patient in waiting for trades to confirm before entry.

• Enjoy Creating Order and Organization – Chaos makes things unpredictable, and unpredictable things can’t be trusted when they are needed most – with this in mind, Judges strive to create order and security in their environments by establishing rules, structures, and clear roles.  This commitment to truth and clear standards makes Judges capable and confident leaders. People with this personality type have no problem distributing tasks and responsibilities to others fairly and objectively, making them excellent administrators.  These traits translate directly to the Judges’ trading.  Plans are detailed and clear, with contingencies in place to account for potential uncertainty.  Judges grasp the need and benefit of a strong capital allocation plan and, when asked, will be able to explain how a particular position fits a need in the overall portfolio.

Trading Weaknesses

• Inflexible and Stubborn – The problem with being so fixated on what works is that Judges too often dismiss what might work better. Everything is opinion until proven, and Judge personalities are reluctant to trust an opinion long enough for it to have that chance.  Judges require experienced coaches with a variety of market experience.  When coaching a Judge on ways to improve trading, statistical studies backing an improvement will be accepted, extensive experience will be listened to, and anecdotal examples will be dismissed out of hand.

• Uncomfortable with Unconventional Situations – Judges are strong adherents to tradition and when suddenly forced to try unvetted solutions, they become uncomfortable and stressed. New ideas suggest that their methods weren’t good enough, and abandoning what has always worked before in favor of something that may yet fail risks their image of reliability.  In trading, Judges are best suited for swing and position trading timeframes as day trading has extended periods of noise and unexpected situations.  Judges need a strong, nearly directive coach early on in their trading careers and benefit from a comprehensive training program that can be backed up with data on its performance in different conditions.  Judges who try to learn trading on their own tend to concentrate on a limited number of trading strategies because of the discomfort of admitting that their previous efforts fell short.  This limits the market conditions that Judges on their own can successfully trade.

• Judgmental – Judges have strong convictions about what is right, wrong, and socially acceptable. Judges’ compulsion to create order often extends to all things and everyone, ignoring the possibility that there are two right ways to get things done. Judges do not hesitate to let these “deviants” know what they think, considering it their duty to set things right.  In trading, this judgmentalism can pit Judge traders against their own trading plans, leading them to focus on whether they were right about a trade rather than whether they were profitable in their overall portfolios.

• Too Focused on Social Status – Judges take pride in the respect of their friends, colleagues, and community, and while difficult to admit, they are very concerned with public opinion. Judges can get so caught up in meeting others’ expectations that they fail to address their own needs.  As with some other personality types, Judges can subconsciously link the performance of their portfolios with their self-esteem and social status.  During prolonged periods of success, Judges can appear to be insufferable to colleagues, and during sharp drawdowns or a string of losses they can become despondent and withdrawn.

• Difficult to Relax – This need for respect fosters a need to maintain their dignity, which can make it difficult to cut loose and relax for risk of looking the fool, even in good fun.  In trading, this difficulty in relaxing makes it hard for Judge traders to step away from their screens and take a break even when market conditions aren’t conducive to trading.  Their need to be seen as diligent and their difficulty in stepping away can lead to trading out of boredom or making a trade simply to justify sitting in front of the computer for extended periods.

• Difficulty Expressing Emotion – This is all evidence of Judges’ greatest weakness: expressing emotions and feeling empathy. People with the Judge personality type get so caught up in the facts and most effective methods that they forget to think of what makes others happy, or of their sensitivity. When trading on a team, Judges can be oblivious to the success or difficulty their teammates are experiencing, causing friction and strife if they are playing up a good trade and someone else is booking a loss.  When trading on their own, Judges view losses as a failure of their own efforts rather than a common, reasonable, and expected part of trading.  Their difficulty in expressing emotion often bottles up this unreasonable feeling of failure, eventually causing it to explode in an unexpected direction.

Conclusion

The Judge personality benefits from a structured training program backed up with statistical justification of the techniques taught.  In this venue, the Judge can learn from the beginning to trade in a holistic manner and build a logical, step-by-step plan to leverage others’ experience and acumen.  For Judges attempting to learn to trade on their own, the experience is an emotional roller coaster.  On their own, they learn a small trading skill set based on current or recently past market conditions, trade with some success for a time, encounter irrational or previously unseen market conditions, take outsized losses, suffer a massive crash in self-esteem, and start the process over from square one.

Judges are excellent at rule-based trading and quickly grasp the benefit of a capital allocation plan, picking the right trade to fill a hole in the plan, and exhibiting the patience to wait for a textbook entry point.  The exception to this is in stagnant or volatile markets.  In stagnant markets, Judges feel they should be making trades to justify the time investment they have made, that idle time is wasted time.  This can lead to Judges forcing trades that often fail to materialize a profit, leading the trader to question the continued efficacy of the plan rather than recognizing that market conditions aren’t conducive to trading.  In volatile markets, Judges are so dependent on rule-based trading that they find it difficult to understand the psychological underpinnings of the market action and can be whipsawed in and out of positions.

In coaching a Judge, the trader must continually be re-focused on overall portfolio profitability rather than the results of individual trades.  Coaches must recognize the correlation between trading performance and self-esteem and also recognize that the correlation can run both ways with respect to causation.  When the trader feels good, the plan is followed.  When the trader feels bad, it causes emotional interference in the decision-making process.  Finally, anecdotal examples should not be given to justify and convince a Judge to make a change to a trading plan.  Extensive personal experience can be used, but statistical evidence is best.