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- Trader Psychometrics
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From the early stages of the Trader Training program trainees undertake
a series of psychological evaluations and assessments that help to determine
personality type, intellectual quotient (IQ), pattern recognition skills,
risk profile and short-term and long-term memory capacities. The results
of these tests give the assessors a basis upon which to build a more
in depth evaluation of the trader which assists in being able to select
the most appropriate metrics to use. The results shape each trainee’s
individual development program as they progress through the training.
At The Trader Training Company we use scientifically rigorous methods
to assess our trainee’s realtime trading behaviour. The program
utilizes Trader Psychometrics, a scientific approach to assessing
trading behaviour developed by one of our Directors, David James Norman.
It is the study, and ultimately the quantification, of electronic trader
behavior where we have a unique window into the performance of the trader.
Through the use of proprietary algorithms, ratios and equations, the
electronic trader’s audit trail is captured and assessed realtime
enabling us to study, risk manage and improve the trainee’s trading
behaviour as they are in the process of trading in simulated and live
markets. This opportunity is completely unique to the Trader Training
Company and puts us leagues ahead of the industry.
Trader Psychometrics could be described as a new field of behavioral
finance as well as a subset of psychology. It is the study of how traders
make decisions to trade and as we know, the term 'trader behavior'
encompasses a multitude of elements including personality, level of
risk tolerance, decision-making competency, information assimilation
ability, spatial awareness, pattern recognition, IQ, emotional intelligence,
cognitive performance, manual and mental dexterity, and even humor and
musical ability.
Without Trader Psychometrics, everything else is history.
A subset of the 17 Trader Psychometrics Categories:
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1.Time interval' and 'Time taken' Metrics
2.Trading sequence measures
3.Measures of confidence
4.Pattern recognition
5.Learnt experiences and adaptation levels
6.Restoration and recovery metrics
7.Explosive moments
8.Information bias
