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.
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Love reign o'er me.
Rain on me
Rain on me
On the dry and dusty road
The nights we spend apart alone
I need to get back home to cool cool rain.
The nights are hot and black as ink
I can't sleep and I lay and I think
Oh God, I need a drink of cool cool rain
…from "Love Reign O'er Me," part of Quadrophenia by The Who
The Memorial Day holiday is upon us, and it's time for rock 'n' roll, rest, reflection and relaxation. In the spirit of going to the beach, let us not forget the tragic character of Jimmy in Quadrophenia (a rock opera by The Who). As described on Wikipedia, his last, desperate mental breakdown occurred on a beach:
"At this point, Jimmy is inconsolable. Everybody from his parents to his girlfriend had disappointed him before, but he had never expected the Mod lifestyle to let him down. Drunk and depressed, he steals a motorboat and takes it out to a barren rock protruding from the sea, and crashes psychologically. With nothing left to live for he finds redemption in the pouring rain, which is expressed in the final song, 'Love, Reign O'er Me.' "
In trader language, we have the phrase "going to the beach." It's a simple concept that has meaning for each of us in and out of the markets. It is about stepping back, walking away for a while and putting things into perspective. There is almost no profession that carries the amount of stress that traders experience. It is natural to have times of great victory and periods of losses, as this is the nature of this game. No one wins all the time. No one is right all the time. Traders go through many ups and downs in the course of their careers. We all know examples of traders who have amassed huge amounts of money one year, only to fall behind and actually lose the next year.
In the case of professional portfolio managers, we see many instances where someone is experiencing a string of losses. In response to this, the manager is encouraged to liquidate his or her portfolio and walk away from the markets for a given period of time. In other words, the trader is urged to temporarily close shop and "go to the beach."
In general, the larger the losses, the more remote from the markets the "beach" should be. This means that the larger the losses, the longer the trip away. Although it is difficult for most to walk away, especially when they are losing large, it is critical to do so. The drawdown on financial capital is one reason (and not to be underestimated); however, it is the drawdown on psychological and physical capital that really takes a toll.
Stepping aside and walking away from the markets is a gift that the trader gives to his body, mind and spirit. It enables the trader to put things into perspective, to renew and recharge his mental, emotional, physical and spiritual resources. Taking time away changes many things and gives the trader a whole new perspective on trading and life.
Trading breaks, vacations, turning off the computer monitors and walking away for a while are among the nicest things that a trader can do for his or her own personal health and well-being. Once back from the beach, the trader is able to see with new eyes. Questions and challenges that seemed impossible prior to the beach are now much clearer. Were the losses due to poor decision-making? Were the losses in just a handful of unfortunate trades, or are they widespread across the accounts? How are the losses distributed in time? So many things that were almost a pre-beach blur become crystal clear.
The trader is refreshed and renewed. Brain function is back to the 90% needed for effective and profitable trading. Energy returns to the trader. Trading plans and strategies are reworked and refined. The world seems a better and brighter place!
Most of all, the markets are still there. Yes, the markets are there every day and will wait for you to return. You are not missing anything by taking time away. Rather, you are preparing for the next stage of your trading career—i.e., one where you put your mistakes into perspective, strengthen those thinking and feeling processes that have given you success in the past, and move forward as a stronger, wiser and more profitable trader.
If you watch how nature deals with adversity, continually renewing itself, you cannot help but learn…Bernie Siegal
Until Next Time,
Good Trading and Brain On!
Janice Dorn, M.D., Ph.D.
janice@thetradingdoctor.com
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