Andrew W. Loy, Dmitry V. Repinz, and Brett N. Steenbargeryy
First Draft: December 27, 2004
Abstract
We investigate several possible links between psychological factors and trading performance
in a sample of 80 anonymous day-traders. Using daily emotional-state surveys over a ve-
week period as well as personality inventory surveys, we construct measures of personality
traits and emotional states for each subject and correlate these measures with daily normal-
ized pro ts-and-losses records. We nd that subjects whose emotional reaction to monetary
gains and losses was more intense on both the positive and negative side exhibited sig-
ni cantly worse trading performance, and large sudden swings in emotional states seem
especially detrimental to cumulative pro ts-and-losses. Psychological traits derived from
a standardized personality inventory survey instrument do not reveal any speci c \trader
personality pro le", raising the possibility that trading skills may not necessarily be innate,
and that di erent personality types may be able to perform trading functions equally well
after proper instruction and practice.
Category Educational
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