It's at least based on how you perceive yourself, not arbitrary data like the time you were born or how your parents named you or total randomness.
Yet, as was mentioned elsewhere in the thread, many of the questions aren't easily answered and the process essentially amounts to pseudo-random selection.

And anyway, the selection method is just a red herring. What's important is the end-result. And in this case, the end result is a set of descriptions which are vague enough to apply to anyone... just like horoscopes.

I think the main problem with horoscopes, or MBTI, or any other similar system, is that it tries to make a blanket judgment about something as complex as the human psyche, claiming that a few paragraphs can sum up a personality. They try to split it up into sections, but do you really believe there are only a dozen personality types on this planet? Okay, horoscopes have 12, MBTI has 16, but my point is that the granularity is still too large. With such extreme variation among personalities that I see in this world, even a thousand detailed personality classifications wouldn't be granular enough.

I think there is some value in the concept of having an axis for various facets of your personality. I think MBTI's problem is in assuming that there are only four axes, and that one must choose whether they fall at either end of a given axis to fit their cookie cutter. Because the resolution isn't granular enough, they have to generalize too much in their descriptions of each of the 16 possible results. Hence, the horoscope-like flavor to their types.

I see human tendencies more like a multi-band equalizer, with many many different and subtle traits (Dozens? Hundreds? Thousands?), and a wide variation of balance among those traits. Unfortunately, that metaphor doesn't work into a packageable, saleable product with a simple quick-and-easy multiple-choice test.

Hmm... Then again, with the right marketing, the TFEQ personality system could one day supplant MBTI as the most accurate personality test ever devised. And then... I shall rule the world... and everyone on this BBS will get a piece. But remember, I still have dibs on New Zealand...
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Tony Fabris