Who Should Not Be A Trader?

From time to time, Dr Brett Steenbarger states that certain people should not trade. He usually states that these are people who are impaired, in some way. They have deep-seated psychological problems that problems that must be addressed first. Then, and only then, can they be coached into becoming a good trader. Now, of course, no one believes that they are the ones with those deep-seated psychological issues. So I started thinking about this question: "Who should I try to dissuade from trading?" This is the list that I came up with. It is not exhaustive. And some of my conclusions may be controversial. But nevertheless, here it is.

1. The Ill-prepared. This goes without saying. No one should commit their money to a trading career without thorough and rigorous preparation. I have been harping on this since the inception of this blog.
2. The Lazy. Like our anonymous trader who was so incensed because Woodie would not call out his entries or exits - and for free! If someone is unwilling to put in the work, then how can they really expect to reap any reward?
3. Substance Abusers. I've talked about this frequently. How alcohol and other drugs of abuse will deleteriously affect our judgment and ability to learn. That is, to modify our behaviors.
4. People with psychiatric disorders. The severely depressed or manic patient will view the market and, indeed, the world through his own distorted view. How can he objectively assess a complex market when he is nihilistic or wildly exuberant?
5. The Rigid Perfectionist. The market, no matter how good your indicator, is not amenable to rigid analysis. It is chaotic and even tempestuous. The perfectionist will demand 100% perfection in his indicator. Or worse, in his performance. Frustration at the inevitable inability to be perfect in a chaotic market will erode his self-confidence and emotional control. It will likely lead to emotional eruptions as the acute stress response arises when trades do not go as predicted.
6. The Gambler. This is kind of the opposite of The Perfectionist. The perfectionist demands predictable, reproducible results. The gambler knows that this is not the case. He throws his money into a trade and hopes to be rescued by "Lady Luck" or "The Gods of Chance." As they don't exist, his wins and losses are random events. The worst thing for a gambler is to hit a winning streak. His belief in his "luck" or his "winning system" will encourage him to rapidly escalate his "bets" and, therefore, his losses.
7. The Indecisive. This may, or may not be, a sub-category of The Perfectionist. He demands predictability, but knows that that is impossible. And so he hesitates. Or, he may be inadequately prepared, and so lacks confidence in his trading plan. Or he may have experienced a loss or series of losses and so that weighs on him. He may know that losses are a part of the game, but is unwilling to accept that fact.
8. The Under Capitalized. As noted above, losses are a part of the game. You may have an excellent indicator with an 80% win rate. But what if your first 20 trades are losers? Can you withstand the draw-down?
9. The Impulsive. I discussed this in my last series. Are you willing to wait for the proper circumstances. Are you willing to sit and wait? Can you follow your trading plan without modifying it on the fly? Can you say to yourself: "Wait. Be patient. Do the harder thing."
10. Those, who by training and education, becomes perfectionists. By this, I mean Doctors, Architects, Engineers, and, perhaps Lawyers. Many professionals are trained to go "beyond a reasonable doubt." They frequently demand absolute certainty in their decision-making. Would like an architect or engineer to design and build a skyscraper or bridge that would only be safe 55% or 65% of the time? Would you go to a doctor or trial lawyer who could accept losses; cut them short; and walk away saying: "Well, the next one will turn out better"? And yet, that is exactly what the trader must accept and do. It may thus become very difficult for these highly-trained professionals to mentally switch gears and do what, instinctively, goes contrary to their very nature.
    

As you can see, some of these issues are not an aspect of "trading psychology." Nor may they have anything to do with "controlling your emotions." Some of these issues may be deep-seated, characteralogic issues. They may be deeply ingrained in a person's character and psychological make-up. I doubt that any "Trader's Coach," without a thorough background and training in psychology and behavioral therapy can adequately address these issues in a few 30-minute telephone sessions.