Janice Dorn, MD, PhD
Neuropsychological Trading Coach
Janice Dorn, M.D., Ph.D., has been a full-time futures trader since 1994. Doctor Janice holds an M.D. in psychiatry and is board-certified by the American Board of Psychiatry and Neurology in general psychiatry and addiction psychiatry. She holds a Ph.D. in brain anatomy. A graduate of Coach University, she is a pioneer market psychiatrist and financial neurobehaviorist. Doctor Janice has written over 500 articles on the financial markets and coached over 600 traders worldwide. She is the Global Risk Strategist for Ingenieux Wealth Management Group, Sydney, Australia.
|
This time we almost
Made the pieces fit
Didn't we, love?
This time we almost
Made some sense of it
Hum... didn't we, love?
This time I had the answer
Right here in my hand
Then I touched it
And it had turned to sand...Lyrics J. Webb, Sung by Barbra Streisand
It has been going on now for over 25 years of my professional life. Year after year, the faces change but the song remains the same. Some traders do magnificently, continuously grow their equity and strengthen all aspects of their capital. Others go through highs and lows and end up with mediocre performance at best. Many of these leave the markets and do not come back. The rest of the traders hang out, go from service to service looking for the Holy Grail and end up in various degrees of mental, emotional, financial, physical and spiritual disruption. The harder they try to find answers, the more struggle ensures, and their desperation increases with each passing day. One in ten of these people either are addicted to trading or will become addicted to trading.
Self-sabotage is a great deceiver. It wears many disguises, but is at the root of almost every case of trader failure that I have treated. As a trading coach, it is critical to say "the things which cannot be said." In other words, it is my responsibility to tell people the truth as I see it, then allow them time and space to process this and to come to their own conclusions. This causes immense resistance, because no one really wants to believe that he or she is sabotaging success. Everyone wants to be a winner, to make the big bucks, to live the large dream, to see tons of good trades and believe the promises made by everyone hawks trading systems, newsletters and the next best money making machine.
Yet, 90% of traders wipe out completely in the first year, and 50% of traders want to lose. Telling people these risks losing them as coaching clients because the majority are simply unable to deal with the truth. It is easier to run, to hide, to put on a mask, to pretend, to deny and to use every form of mental defense mechanism to escape from the harsh reality that they are losers in the great game of trading. Denial is self-sabotage. Being hooked and not willing to admit it is self-sabotage.
The highest rung on the ladder of being hooked via self-sabotage is what is called "overtrading." I am weary beyond words of listening to people who talk and write about trading psychology speak about the possible psychological reasons for overtrading. As a practicing psychiatrist for over 25 years, I know good psychobabble when I hear it. Euphemisms such as "overtrading," "loss of discipline," "getting out of the zone," "holding, hoping and praying" and a litany of other "buzz phrases” are just another way of saying that the trader is compulsive, obsessive and addicted. Let's call a spade a spade, and try to get to the bottom of it so we can fix it. Attempts to provide reasons for this behavioral mindset are equivalent to asking a heroin addict why they are using heroin. They are using heroin because they are addicted to heroin. The addict can spend years and thousands of dollars sitting on a shrink's couch discussing all the reasons that they are using heroin and that does not fix the problem. Understanding WHY someone is an addict is absolutely counterproductive to getting rid of the addiction.
Addiction is a brain disease. It is a behavioral situation which is sub served by electrochemical changes in the brain. Talking for years might help, psychopharmacology might help, rehabilitation in some facility might help, subjecting an addict to five hours a day of intense sauna or steam might help. But, in the end, the only way to deal with addiction is for the addict to stop the behavior.
The addict must make a total commitment to abstinence. No one and nothing can do that for the addict. This is a highly personal disease and a highly personal decision. Once the commitment is made to changing the behavior, the true healing can begin. Within approximately eleven months of cessation of the addictive behavior, the brain chemistry is restored to normal. Cravings may still occur, but the addict is now in a position where his or her healing brain is able to override them.
The descent into the disease of trading addiction can be broken down into four separate phases. I will deal with each of these phases in Trading Wisdoms throughout the coming year; however, for now, please just be aware of them:
(1) Winning
(2) Losing
(3) Desperation
(4) Hopelessness
Additionally, for anyone who is concerned that they may be suffering from this brain disease called trading addiction, I am prepared to provide a list of 20 questions which require a simple "Yes" or " No" answer. When the student is ready, the teacher will appear, and I will send these questions to anyone who speaks up and asks for them.
Trading addiction occurs in many people and at all levels of trading skills. Next week, I will tell you a true and tragic story of Trader Nick which exemplifies the classic example of what happens through the four phases of trading addiction. The stakes were very high here, but you can scale them down and apply them to your own experience. After you have read it, please write to me and tell me if you see yourself in any aspect of this compelling and tragic story?
Here is something I wrote a few years ago, and plenty of food for thought for your trading brain--addicted or not!
Trader's Blues
There's trouble on the street today
I can feel it in my bones
I had a premonition that he should not go in alone
I knew his charts were loaded, and he was ready for the kill
Until the stock imploded and the blood began to spill.
So baby, here's your ticket...lick your wounds and slap your hand
Here's a little money now, do it just like we planned
If you're cool for 20 hours, it might pay you 20 grand!
I'm sorry it went down like this, and someone had to lose
It's the nature of the business.
It's the Trader's Blues.
The hedgies and the gurus, market makers and the law,
The pay-offs and the rip-offs, and the things nobody saw
No matter if it's futures, or the stocks that go mo-mo
You've got to get those loaded charts 'cause it's all about the dough.
There's tons of shady characters, lots of dirty deals
Every name's an alias in case somebody squeals
It's the lure of easy money, got a very strong appeal
Perhaps you'll understand it better standin' in his shoes
It's the ultimate enticement
It's the Trader's Blues
You see it in the headline, you hear it every day
They say they're gonna stop it, but it doesn't do away
They move it through an ECN or flip it on the NAS
They hide it up in ARCA, and I mean it's here to stay!
It's propping up the governments and big fat global stew
You ask any SEC man, he'll say "Nothin' we can do."
From the verbose newsletter writer back down to me and you
It's a losing proposition but one you can't refuse.
It's the politics of fear and greed
It's the Trader's Blues... Janice Dorn, M.D., Ph.D. (with apologies and gratitude to Glenn Fry and "Smuggler's Blues")
|
