Are Traders Psychopaths?

Interesting article from Zerohedge and a separate video.

New Study – Traders are worse than Psychopaths
http://www.zerohedge.com/contributed...se-psychopaths

Defense Against the Psychopath (Full length Version)

It's not really new news, there's been a decent bit of research re: traders and psychopathy before.

However when put into context, I don't think it's really that big of a deal.

In a nut shell, traders are generally competitive, motivated people, in a cutthroat industry where one man's loss is another's gain, with the potential for huge rewards taken along with huge risk, and often devoid of personal interaction with the person or persons who would be hurt if that risk does not pay off. Of course when it comes to these aspects they are going to bare similarities to psychopaths, however it hardly makes them even close to psychopaths.

But let's look at the aspects of psychopathy that don't deal directly with risk, reward, ego, and other things that are all direct aspects of the trading industry.

Probably the most defining characteristic of psychopaths is their lack of empathy. They simply do not care about others, period. When put into the context of trading, it makes perfect sense that a trader needs to lack empathy-- yours wins are coming out of someone else's losses, and vice-versa. The difference is when you remove a trader out of his profession, you'll find that most are about as empathetic as the average person. Certainly a study involving traders pitted against each other in a competition is hardly the best example of where you'd find empathy. Why wouldn't they use a real world example, perhaps one where the traders actions directly impacted a loved one (oops, psychopaths generally don't "love") in a negative way?

In summary, I believe trading definitely attracts psychopaths (much like many other industries, such as extreme sports, boxing, professional gambling, etc.), primarily due to the fact that the characteristics of psychopaths happen to be pretty beneficial in the industry; however, I would also say that most traders are hardly psychopaths, especially once removed from their professional environment.

You make some great points on the average trader for sure and I think I agree as well. I think the rules change a bit at the high levels of the big Investment banks that are bankrupting whole countries though, which is different from the average joe trader.

I know the question of moral trading has come up before too. For example would you buy a prison etf? An etf that makes money on how profitable prisons are as they put more and more people in jail for petty crimes so they can make money. Or make money on a company that makes its profit from wars. I personally don't trade things like that, but it doesn't bother me that others do. Well maybe a just a little. Haha.

Good stuff.

I misinterpreted initially that this is another thread on trader being a 'bad' person. It is not. Thanks LasVahGoose for correcting my misinterpretation.

I have seen in other forums and thread calling traders as gamblers, psychopaths, unethical speculators who caused market crashes etc. Whether you like it or not, trader carries a bad reputation in the mind of the non-traders.

The reason of my decision to take up full-time trading is on the other hand opposite to what others think. I have pretty much work as an employee for a large bulk of my life and in comparison, I can be and am a 'better' person as a trader with just me and the price rather than working in other occupations where human dynamics are involved.

In other occupations, competition for career advancement often result in nasty office politicking. People backstabs and fix you up without a single soul of conscience, especially when you are performing well in an organization. You can choose to not compete and is satisfied assuming the lowest form of beings in the organization hierarchy. Even that, you will still be fixed by others occupying the same lowest level form of beings. The intensity of getting fixed at the lowest level may be less than higher up in the organization hierarchy, but nonetheless, you are and will be fixed.

Therefore, in order to 'survive', you have to join in the politicking game. In order words, you have to fix others before they fix you. You have to be just so bloody nasty to work as an employee. If and when you looked back when you retire, you will see pools of blood behind you as a result of the vicious carnages that you are an initiator or willing party. To regret then would be too late.

After becoming a full-time trader, I have the freedom to choose to be a 'good' person capable of loving kindness. Basically back to the true self that I am when I an born to this world. Full-time trading is and never will be an easy task. But the fact that it allows me to exercise the freedom to be a 'good' person is well worth whatever pains that are inflicted upon oneself on the road of professional trading.

From this perspective, I believe many (but not all) traders of like minds, are one of the kindest people to walk on this earth. They are not the 'bad' person that people accuse them to be. The accuser are the 'bad' person or an innocent person who have never experience the nastiness of working in other occupations.

No it is not.

I have edited my posting. Apologies and thanks for correcting my misinterpretation.

This is just a media hype youtube wtf. analysis. They are comparing two totally different things. The key characteristic of psychopaths is an absence of conscience. Greed or risk taking are not. Plus to say that professional traders are less risk averse then psychopaths. They are less risk averse because they can better asses risk. This Internet age is just full of trash information. And to finish correlation doesn't imply causation.

Objective and logical. Current media would to anything to attract attention...

Maybe placing the Article and Video together was a bad idea. They don't necessarily go together. The main thing is the article in regards to traders. The video just provides more insight into psychopaths in general.

I'm with you on that. I think a more accurate statement would be "traders (in order to "win") require a similar mindset and adopted morals to that in which psychopaths live by in every day life

But that doesn't really have the same ring to it I guess.

We're taught early that emotions are bad etc etc and so when trading, this is the behavior we learn to adopt. Does that mean we go home and knife the neighbors cat? I hope not, I can only speak for myself lol

Silly article if you ask me. And like the guy above outlined the same thing is present in any competitive environment. Trading by nature just happens to be the most competitive of them all.

Hello,


A serious full time professional Trader is an Psychopath!

“unless” he/she spends some money on self. Traveling and having serious fun outside of the screen is a great compliment to trading profession and it’s a must.. cost? 20k a year minimum.. which leads me to point out.. if you cannot make that kind of profit and don’t possess a big enough account to even produce 4 times of that amount, you should not be even in this field.. if you are (which there is a lot of you out there.. lol) then losing will catch up to you eventually as psychopath-ing has creep-ed inside.
.. a psychopath Trader would not fuck with no body but to self.
I put it in the nutshell, hope you all got my drift.

so, PD's advise and recipe for whatever worth's..
-Work hard within a plan and live life like no other.. enjoy the fuck out of it otherwise your just holding all the profit (that's if your making any in the first place) only to give it back and some soon down the line.
-Weekend getaway with well planned social events of kinds.. full vacation on the last couple weeks of each quarter with complete December off.. and last but not least, have lot's of sex in between of it all, this one is huge, trust me.

Yeah, I agree, but something from the video that was interesting was that if you have to adopt psychopathic behavior to adjust to a psychopathic system then you become what they call a secondary psychopath.

I think the word psychopath brings up too many images of a horror movie, but as the video showed there are different levels of behavior. Overall I think traders to survive eventually will need to adopt traits of psychopathic behavior and the study in the article I think shows that it can be extreme. Which doesn't mean they are going to go out and destroy (but we shouldn't ignore the ones that do). This is not a judgement call or saying this makes them good or bad people, just kind of it is what it is type thing.

When two willing participants enter into a zero sum game you'll have a winner and loser. I may think it sucks taking someones account and maybe they lose everything, but at the same time I'm not giving the money back either!

Cheers yeah, I watched about 20 minutes of the video the other night. It's quite confronting. I agree that the word "Psychopath" in general instantly draws up all sorts of crazy images.

And lol how good a trader would we be if every time we won we shed a tear for whoever was on the other side. lol. I'm not about to call my broker up and hand him back my winnings just so I can say I'm NOT a psychopath. It's not like I took their money at gun point, we entered into a willing exchange, one wins the other loses. We both knew what the stakes were.

Interesting subject anyway, perhaps also touches on the reasons why some people find the psychological adjustment to trading very difficult. Perhaps the more Empathetic, Sensitive, Remorseful etc. you are, the more time and effort it will take you to get these elements right for trading.

By admission I've been told all my life by others I'm a sensitive person. I prefer the word observant lol but I did struggle at the beginning with the psychological aspects of trading quite a bit for the first year or two.

Thanks for sharing the article and video though. Always nice to see how "the other side" view us.

Regarding the topic of trading being a zero sum game and therefore it is 'bad' to win upon others' losses. Therefore trader are essentially perceived as a predator preying on others.

Which other 'system' so to speak is not a zero sum game? Economy growth? Equity investment?

We have often been painted the picture that company creates value and through such, it create wealth and everyone wins. So investment in equity is 'good' because your win is not others loss. Really?

What drives growth? Do you think you can create something out of nothing? The earth resources drives economic growth among other things. Crude oil is a major resources that drives economic growth for many decades. Crude oil is non-renewable. What is used up is gone forever. All the growth benefit that we reap is at the expense of our future generation who will be left with lesser earth resources.

The earth is a closed system within a 'closed' universe. A closed system essentially mean that you cannot create something out of nothing. As long as that holds, everything is a zero sum game. If you are diligent to track down the causation chain of events that leads to your win/benefit/growth in any ventures, you will find that it is 'paid' for by 'something'/'someone'.

This drives me to the point that if and when we are successful in whatever we do, we need to give back something to the 'system' without expecting any reward in return.

I think my points drifted from the main discussion topics. But it is to bring across the point that traders are not any 'bad' than other professionals.

Right, this is a good point. What should be considered though is the level of interaction between traders and "victims". When you are trading at a fund or bank, you're pretty far removed from who you could potentially hurt.

Consider two examples, (1) a trader who receives $1 million of random people's money to trade with, and (2) a trader who receives $1 million from people he personally knows. Both traders lose all of the funds. Is trader 1 going to react the same as trader 2? Doubtful. He doesn't know any of the "victims", so I certainly wouldn't expect him to identify with them as much as trader 2 who lost his friends' money. Is trader 1's behavior psychopathic? Hardly. This is why I find examples of traders losing a ton of other people's money to be lackluster-- this is, I believe, by the textbook NOT psychopathic. In other words, take trader 1, put him in trader 2's position, and his behavior will change (most likely). A psychopath would treat each situation identically and not care either way.

Your point about secondary psychopathy was interesting, but I think it's worth noting that there is a pretty huge difference between primary and secondary psychopathy, and that when people think of psychopaths in the traditional sense, they're definitely thinking of the behavioral characteristics of primary psychopathy.

In a nutshell...

primary psychopathy: lack of empathy/emotion, disregard for fear of punishment, few boundaries for behavior

secondary psychopathy: high levels of anxiety, very impulsive/lack of self-control, trouble tolerating boredom

Certainly not the best characteristics, but hardly as bad as these fluffy news articles are trying to portray traders as by labeling them psychopaths.

It is not enough to succeed. Others must fail. http://www.quotationspage.com/icon_info.gifhttp://www.quotationspage.com/icon_plus.gifhttp://www.quotationspage.com/icon_email.gifhttp://www.quotationspage.com/icon_blank.gif
Gore Vidal (1925 - )

At the very least, traders are professional masochists

On the subject of 'one man's gain is another's loss'... this is the way business works. I've seen Home Depot and Starbucks set up shop right next door to their competitor with the full intention of driving them out of business. Is that bad ?? No, it's business.

And, of course, everyone is different. But, as far as dealing with our own internal stuff.... I think most successful people are at least aware of their internal stuff.

Meaning... that some people will poison entire communities to make a profit, while others would choose not to invest in prisons and wars, or would choose only to invest in what they perceive as good or helpful. But the one's who don't mind poison for profit are at least well aware of themselves. And they would readily admit that they profit from others demise. I think the most important thing is to confront and be aware of our internal emotions and drive.

We're all here to make a buck and if we were such pr!cks, we wouldn't be sharing anything helpful here with each other. We would likely only post purposive misinformation. So no, were not psychopaths, we're just nuts.

Steve Jobs dies and the first thing I think, should I short the stock? What's going to happen to AAPL? Haha!

That's the absolute first thought that crossed my mind too, when i read the news myself. We are the devils of opportunity, traders : )