Your Trader Brain Type

Brain dominance matters because our left and right hemispheres perceive and solve problems differently: both life problems and trading problems. Neither hemisphere provides a complete picture or a balanced solution.

The Left-Brain perspective is emotionally detached, detail oriented and proceeds in a logical, step by step manner. It breaks things down into their component parts and studies historical precedent before it draws any conclusions.  All of that is useful, but it’s not enough.

The Right Brain does the opposite.

When faced with a problem, our Right Brain gets excited as it searches for relevant patterns, context and confluence to better understand the situation. Then, it formulates a tactical response on the fly and doesn’t hesitate to take a leap of faith to find out if the theory/solution is correct.

Whereas the left brain deduces from precedent, the right brain extrapolates from the current context and whatever wisdom it has gleaned from its lived experience on the Road Less Travelled.

From the Left-Brain perspective, this improvised problem-solving approach appears impulsive, but the Right Brain operates by trial and error and doesn’t judge the errors. It approaches all challenges like Nelson Mandela: “I never lose. I either win or learn.”

WHOLE BRAIN TRADING
Trading is not only a complex activity requiring lots of study, it’s also dangerous. Jumping into the deep end of the pool without proper training is not recommended. But we don’t want to get stuck on the sidelines, either. And we don’t want to fight the last war. We need to grow and adapt.

Clearly, the complementary skills from both hemispheres would be ideal for this challenge. The ability to be both methodical (left brain) and adaptive (right brain) is critical for success.

To understand how this Left-Right Brain model might inform and improve your trading, let’s start with your Dominance Ratio to see where you fall on the Left-Right scale.

Your profile result gives you a dominance ratio. If you have a Left-Brain score > 50 you are Left Brain Dominant, and vice versa for the Right Brain Dominance. We can divide each Brain Type into three sections according to the distribution of the scores around the balance point of the scale (a score of 50 Left/50 Right).

LEFT BRAIN DOMINANCE

The gray tones on the left side of the scale were selected to represent the left-brain style, which thinks in mostly “black and white” terms. To expand on the description above, left brain dominance is a Mindset that is analytical, objective, literal, sequential, numeric, deliberate and even a bit “judgmental.”

Regarding the judgmental trait, left brain dominance comes with a clear sense of right & wrong, good and bad and lots of other polarities. Therefore, it has a psychological range that runs from ‘Balanced’ to ‘Rigid,’ as shown on the scale above.

LEFT BRAIN DOMINANCE (50-59)
A Left-Brain Dominance Score in the 50’s indicates that you have a relatively balanced brain. Although you prefer an analytical approach to life and trading, you also have access to the real-time tactical (and improvisational) skills that arise from the Right side. So, you can “think on your feet,” so to speak. You can handle surprises and you don’t get intimidated by adversity.

LEFT BRAIN DOMINANCE (60-69)
A Left-Brain Dominance Score in the 60’s indicates that you have a stronger preference for analysis over action. You are somewhat inhibited and think twice about most things because you would rather be safe than sorry. You don’t really like surprises and you take time to come up with a plan to deal with adversity.

LEFT BRAIN DOMINANCE (70+)
If you score in the 70’s or higher, it is likely that your disciplined approach to defining and solving trading problems is rather extreme and may be holding you back from achieving your full potential. You hold all your ideas with strong conviction and don’t waver or wobble.

This mindset produces consistency, but it also means you are not very open to information that contradicts your preconceptions. If you are profitable, you will stay profitable, but if you are breakeven or losing, it will be difficult for you to make the changes you need to make in order to move forward.

RIGHT BRAIN DOMINANCE

The colored tones on the right side of the scale were selected to represent the right brain style, which is more nuanced and emotional. To expand on the description given earlier, right brain dominance is a Mindset that is synthetic, subjective, metaphorical, multi-tasking, image and pattern based, improvisational, spontaneous, dis-inhibited and more “observational” than judgmental.

Regarding the non-judgmental trait, right brain dominance embraces polarities and paradox. It has a psychological range that runs from ‘Balanced’ to ‘Impulsive,’ as shown on the scale above.

RIGHT BRAIN DOMINANCE (50-59)
A Right Brain Dominance Score in the 50’s indicates that you have a relatively balanced brain. Although you prefer a more creative approach to life and trading, you also have access to the methodical skills that arise from the Left side.

You prefer to solve problems creatively, but you also appreciate the importance of planning in both life and trading. You approach most surprises and instances of adversity as challenges that raise your game.

RIGHT BRAIN DOMINANCE (60-69)
A Right Brain Dominance Score in the 60’s indicates that you have a definite preference for improvisation over planning. You have a tendency to shoot first and ask questions later. You prioritize going for results over tedious deliberation because patience isn’t your strong suit.

Timing is a problem. In trading you are often the First Mouse, when the Second Mouse usually gets the cheese. But you never give up. Suprises and challenges motivate you to try harder to solve emerging problems.

RIGHT BRAIN DOMINANCE (70+)
If you score in the 70’s or higher, it is likely that you have an improvisational approach to defining and solving most trading problems, which is probably holding you back from achieving your full potential. You mostly rely on your intuition and gut feelings, especially when you feel some pressure from adverse results.

Although you are not greedy in the traditional sense, you feel “On the Verge of Greatness” and you will do almost anything to achieve it… because it feels so close. This leads to high drama and boom bust results.

CONCLUSION
Our brains constantly learn and grow. All they need is direction from us. Functionality can be optimized through experience and training.

If you want to be a whole-brain trader… resilient in the face of stress and uncertainty… then strive to incorporate skills and habits from your non-dominant side.  The more we integrate these opposites, the more balanced our decision making becomes as we craft solutions with a wider range of tools.

This core balancing process happens naturally, as we mature. Active trading (daytrading), however, is a time-compressed business venture that lacks supervision, timely feedback and guardrails. We are our own boss, so periods of imbalance can be quite costly.

I offer a range of coaching services that start at $297. Check out my coaching programs page here.

To your success!

Kenneth Reid, Ph.D.