Type As are particularly attracted to the idea of being dealers, ambitious as they are for money, excitement and risk. But if you had three months’ spending put away, this could be a lifeline if you were made redundant, because it would give you time to make other savings liquid.You can’t afford to take any risks with emergency savings, so don’t use this money to buy shares or any other investment where you could lose your capital. Typically, type A individuals:l move and eat rapidlyl feel impatient with the speed of most eventsl strive to think or do two or more things simultaneouslyl cannot cope with leisurel are obsessed with numbers, measuring their success in terms of how much of everything they acquireType Bs, on the other hand:l never suffer from a sense of time urgency or impatiencel feel no need to display or discuss their achievements unless such exposure is demanded by the situationl play for fun and relaxation, rather than to exhibit their superiority at any costl can relax without guiltWe have not researched exactly the degree to which Liffe dealers are type As, but we suspect that they are mostly type A. This is what screen-based trading demands: cool, careful, deliberate calculations as to which way the market is heading.Do Liffe floor traders have the emotional control for screen trade? One measure that psychologists use to gauge people’s ability for emotional control is the distinction between type A and type B personalities. Now consider how difficult it is to make carefully judged decisions when you are in a state of high excitement or fear – when your heart is pounding and your hands are shaking.

Just think how excited people get at the race course, when they put on a pounds 5 bet. Multiply the pounds 5 by a factor of 10,000 or 100,000, and imagine the effect That’s what futures traders live with, minute by minute. Few jobs are as emotionally demanding as trading large sums of money in volatile markets. The traders can make money only if they are correct in their judgement of market direction, because they must cover the cost of making the trade. Intuition and gut- feel are less important than logical analysis and sound trading methodology.A big difference between successful and unsuccessful screen traders is their level of emotional control.

Floor dealing is usually a short-term activity, with deals commonly lasting only a few seconds between purchase and sale Dealers have to make rapid decisions. They have no time for analysis; they must use their intuition and gut-feel.By contrast, electronic trading is a longer-term activity. Although there are some market-makers, most traders enter the market of their own volition, buying at the offer price and selling at the bid price, thereby giving up the “edge” that goes into the market-makers’ pockets. If they do so simultaneously, they instantly make a profit – so they often make money despite being incorrect in their assessment of market direction.

They act as market-makers, quoting buying and selling prices, which gives them an “edge” over other market participants. They buy at their buying price and sell at their selling price. But dealers are less interested in the overall direction of the market, and more short-term in their thinking. What will happen then to Liffe’s colourful (both in clothing and in language) floor traders? Some will want to try their hand at screen-based trading, but will they be as successful when removed from pit and put in front of monitor and keyboard? To answer such a question we need to look at the psychological make up of City dealers and traders, and what their jobs really involve. From the perspective of an occupational psychologist, not many of Liffe’s floor traders will successfully transfer their skills to an electronic trading system.
There is an important distinction between open outcry dealers and electronic screen traders. Both are engaged in figuring out the direction of the market and acting accordingly.