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Transgender is an adjective.  A transgender person has a desire to live and act like a member of the opposite sex.

A transgender woman is a male who has the desire to live and act like a woman.

A transgender man is a female who has the desire to live and act like a man.

The opposite of transgender is cisgender.  A cisgender person has NO desire to EVER live or act like a member of the opposite sex.

Transgender is a comprehensive term describing an entire spectrum of this desire to live and act like a member of the opposite sex.  This includes social behavior, activity preferences, mannerisms, speech patterns, and appearance.  A transgender person may dress and appear cisgender and yet prefers friendships with the opposite sex, prefers activities that are typically enjoyed by the opposite sex, behaves more like the opposite sex, or speaks more like the opposite sex.

Harry Benjamin studied a wide range of people and attempted to define a range, similar to Kinsey's range of sexual preferences.  The criteria for the range values has evolved over time as larger survey groups are studied.  The most recent survey group was over 700,000 respondents.

Gender is one's identity, how you see yourself, how you think, how you act, how you interact with others.

Sex is one's biological characteristics

One's sex may be clearly male, clearly female, or ambiguous.  An ambiguous male may have a very small penis, undescended testicles, or even urinary abnormalities.  These are obvious forms.  More subtle forms that are often not detected until surgery, MRI, or CT scan, include organ abnormalities including testes that are shaped more like ovaries, known as ova-testes, internal uterus, internal ovaries, even a malformed uterus that empties into the bowels.  Brain variations include a smaller hypothalamus, which results in lack of aggression, most common in women, less common in men.  Also skeletal variations including hip width and position, and even finger lengths.  There are about 50 forms of gender ambiguity, so the odds of having one or more are actually pretty high.

There are a number of different causes.  The current theory related to sexual ambiguity has been that there was a deficiency of testosterone in the male fetus, or too much testosterone in the female fetus.  Possible causes for this include high levels of stress (children born in concentration camps, prisons, and refugee centers have higher incidence), medications (DES to prevent miscarriages, birth control methods such as Norplant or oral contraceptives taken after pregnancy), and other environmental factors.  Recently, research has shown that there is a genetic pattern that causes something called Androgen Insensitivity Syndrome (AIS), which prevents the fetus from assimilating and processing testosterone during early pregnancy.  There are also a number of genetic disorders including having XXY chromosomes.

There are similar issues with girls.  Girls may be sensitized to testosterone produced by the mother's kidneys, testosterone introduced into the mother's bloodstream by a partner, or possibly even a genetic sensitivity that makes a girl exhibit more masculine traits, including an enlarged clitoris, closed or partially closed labia, and internal organ differences.

Gender Identity - how one perceives themselves, may be influenced by various forms of gender ambiguity.  For example, a boy with a lack of aggression may find that it is too dangerous to play with other boys because he cannot fight back.  A girl with a strong aggressive nature might be frustrated or bored with the passive and fine motor activities enjoyed by cisgender females.

Transgender females were so common that Freud called it "Penis Envy".  This may be because aggressive and competitive girls are encouraged and supported as "Tom-Boys" and are often able to compete with boys even into early puberty. 

On the other hand, boys who exhibit feminine behaviors are often ridiculed, derided, abused, even assaulted, terms such as "Sissy", "Pussy", "Wimp", "Girlie", and "Mama's Boy" are frequently used.  During puberty, homosexuality based terms such as "Fairy", "Queen", "Queer", and "Faggot" are often misapplied.  As a result, it is more common for boys who are transgender to go into "Stealth Mode", doing their best to hide or minimize feminine behaviors and desires from public view.  In many cases, they hide by isolating themselves, becoming "book-worms", "Nerds", "Egg-heads" and similar terms.

Transgender males and females are often very intelligent, because they have to be smart to survive.  They are acutely aware and observant of things that most people take for granted.  They are acutely aware of the activities of their desired gender as well as those of their forced gender (the gender they are forced to exhibit based on birth traits).  Their isolation often involves intellectual pursuits, solitary hobbies, as well as a wide variety of interests.  In some cases, they may enjoy activities of both their desired gender and their forced gender.  For example, they may love cooking, housework, and crafts, but they also enjoy science, technology, and philosophy.  Many also have strong spiritual beliefs.

Here are some characteristics of the various levels.

  1. Cisgender - This is someone who is quite happy in their gender role, often very invested in that gender role.  For example, an Alpha Male, or a "Girly Girl".  These people take great pride in their gender, which matches their sex.
  2. Secretive and Periodic - These people are mostly happy with their birth gender, but enjoy certain aspects of the opposite sex.  They might enjoy cooking or fashion, and may even enjoy cross-dressing - but usually any overt feminine behavior such as cross-dressing, are kept very secret.
  3. Secretive and Frequent - This is someone who struggles with their gender role, but enjoys aspects of their birth gender.  They have exhibited a number of "acceptable" behaviors that are traditionally those of the opposite gender, such as cooking, sewing, babysitting, and have many female friends.  They also enjoy cisgender activities and non-gender activities such as hobbies, dancing, or reading several books a week..  They may secretly engage in overt feminine activities like cross-dressing, often on a frequent basis.  They may elude discovery for years, even decades, because they are very good at avoiding discovery.  There are some level three cross-dressers who even hid their "stash" in secret compartments in the walls or ceilings.  An important warning sign is if they are frequently bullied and avoid socialization with others of the same gender.  This is often an indicative of someone who is more severely transgender and living in terror of discovery.
  4. Public and Periodic - These are people who openly exhibit transgender behavior, and enjoy living and acting like a member of the opposite sex, but only for brief periods.  One transgender woman called it the "Vampire" stage, because it was usually only at night on the week-ends.  Some engage in theatrical activities such as drag shows, however not all drag queens are transgender and most transgender girls are not drag queens.  Drag queens are often more cisgender, but enjoy dressing up and doing shows where they can earn tips and other money.  Periodic public transgender women often look for "safe" environments where they won't get attacked if they are read.  This may include gay bars, lesbian bars, or activities at LGBT community centers.  For many, these are the first steps toward transition itself.
  5. Public and Frequent - These are people who like to fully interact as the opposite sex on a regular basis.  They may be out most evenings and most week-ends.  Often they lead a double life, maintaining a cisgender identity at work, church, family, and socially, but they get great happiness being out in social environments as transgender.  Most of these people have little trouble "passing" but may be a bit too beautiful to "blend" when they first start regular outings.  This is often because they are only going to clubs and recreational events, so they dress to party.  Again, for many, these are early steps toward transition itself.
  6. Severe and constant - These are the most severe type.  These are sometimes called "Do or Die" Transsexuals.  They can barely stand to look in the mirror when in forced gender mode, and willing to consider extreme measures to be able to be their "True Selves".  Many have tried to castrate or emasculate themselves as early as 2-3 years old.  Sometimes they injure themselves pretty seriously.  Puberty is an especially terrible time for them as they see their bodies changing into the forced gender.  Many have strong faith and study multiple religions, including Christianity, Hindu, and Buddhism.  They often begin to consider reincarnation as the only way to be rid of the body they so hate, with the hope of either heaven as a girl, or reincarnation as a girl.  They are often seriously contemplating suicide, and likely to attempt suicide multiple times.  Suicide triggers include rejection by family, lover, and/or friends, often in combination with being "Outed" or Kicked out of their childhood home.

How many transgender people are there?

This is very hard to determine.  We know that there are about 700,000 transgender men and women who have sought out Hormone Replacement Therapy (HRT) and Gender Correction Surgery (GCS).  But we know that this is only the tip of the iceberg.  Part of the problem is that so many in the transgender community are so secretive, living in stealth.  Many live in stealth before their transition, and again after transition.  Other than their early transition period, they are not really visible as transgender.  The image of a guy in "Camp Drag" is extremely rare.  By the time a transgender woman comes out in public, she has practiced walking, talking, dressing, make-up, and behavior.  In many cases, it took great effort to exhibit forced gender behavior, so acting more like their "True Gender" is actually quite natural.

The other problem is the "Pressure Cooker" syndrome.  Both transgender men and women are often literally forced to conform to their birth gender.  A transgender girl is sent to play with the boys, where she is physically attacked, often by large groups of a dozen or more boys her own size and age, who take out anger at older sisters, stronger girls, and any other girl they aren't allowed to hit, by hitting, kicking, and even clubbing and stoning, the "Sissy".

As a result, many of those who might even be a 4, 5, or even a 6, may not show up on anybody's radar until they are full grown, and even then, may not want to risk losing spouse, children, job, career, social standing, status, even their home, because they "come out".  Some transgender women don't transition until they are old enough to retire.  Others will transition only after a divorce.

According to some surveys done back in the 1970s, before transition was a viable option in the United States, 1 in 3 men admitted that they had dressed up as women, and enjoyed it.   In an average classroom of 30 boys and girls in roughly equal proportions, there will be at least one "tom-boy" and at least one "sissy", but there will also be 4 to 6 "book-worms".  It's entirely possible that as many as 1 in 5 people are in the 3-6 spectrum of the transgender scale, but many may still limit or try to control overt behavior such as cross-dressing to avoid discovery and the fear of the persecution they experienced or saw as children.