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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The magical mystery tour is coming to take you away,
Coming to take you away.
The magical mystery tour is dying to take you away,
Dying to take you away, take you today
…from “Magical Mystery Tour,” The Beatles The markets are speaking, just as they have spoken for the last several hundred years. The challenge, as always, is to understand the language. I can assure you, no matter how intelligent you are or how fluent you are in any language, the market will speak in words and phrases that you will not be able to understand. Just when you think you have it figured out and translated, it will morph into a polyglot and throw even more new words at you. There is a wonderful story about a successful British trader who was walking on Brighton Beach. He found a talking frog who told the trader he would grant him two wishes. The trader, looking pleased and puzzled at the same time, said to the frog, “I would love to visit the United States, but I am afraid of water and flying, so can you please build a bridge across the Atlantic Ocean so that I can drive there? The frog was taken aback for a minute, and then said, “Do you have any idea what would be required to build a bridge across thousands of miles of ocean? Even with all of my powers, I cannot imagine the costs, the engineering genius or the time it would take to complete such a task. I am a miracle frog, but you have asked me something which is absolutely beyond my ability to comprehend.“ Anxious, he looked with longing, bulging eyes at the trader and added, “Go ahead, please ask me to grant you one more wish? I am truly magical and I want you to see that. Anything at all, just ask me?” The trader stepped back, thought long and hard, and then looked at the frog and said, “I have always wanted to know the secret of success in the financial markets. If you, dear frog, tell me this, I will consider you to be the most magical and wonderful thing to ever cross my path on this or any other beach. What is the key to unlock the mystery of the markets?” The frog immediately blurted out, “Do you prefer two or four lanes on that bridge?” The market knows more than you or I, and it is constantly speaking to us. It is a mysterious living and breathing entity that represents the combined input of all so-called economic agents. In theory, these agents act to protect their own interests, making decisions based on universally available information that they process in a rational manner. If you stop to think about this, you will see that the market is a formidable force that cannot, in my 20-plus years of experience, be overcome in a sustained fashion by the efforts and talents of individual humans. This does not mean that the market produces rational outcomes, however. Those of you who have been reading Trading Wisdoms for some time know that the markets are less than efficient and less than rational. All one has to do is to look at history (since hindsight is always 100% accurate) to stand back in amazement that certain asset prices could possibly have been the result of rational thoughts of human beings making decisions in their own interests. Ironically, this realization comes rather quickly—i.e., the same people who contributed to the irrationality are the most dumbfounded when prices return to normal. From Dutch tulips in the 17th century to virtual booksellers and virtual second lives in the 21st century, markets have demonstrated their collective mastery over every human attribute. Markets are governed by an unwritten law, spoken in mystical languages and subject to both wisdom and whimsy. In order to be successful in such an environment, you need to be humble. If you attempt to beat the market, you are at overwhelming odds for failure. What separates losing from winning traders and investors is having an edge and realizing with every fiber of your being that this edge is at risk every moment of every day that your monies and brains are in the markets. Why? Because other economic agents are traveling down the same path that led you to your presently happy state of affairs. They are on your heels and will not be satisfied until they take your edge and make it theirs. I urge you to never overestimate your abilities in the markets and never underestimate the power of the markets to humble you. There are ways to be in a happy medium with the markets, to find joy in the discovery of self and of taking personal responsibility for everything you do in the markets. This is part of this miraculous journey to trading and investing success. Be humble, take personal responsibility, learn that you are irrational and that your rat brain is always out to get you, do something to contain those impulses, and never, ever stop learning, growing and playing. This is a game. Learn how to play it and have some fun with it. It is time for us to lighten up, to begin to enjoy this journey and to start having more fun. Let’s learn to laugh, to play, to realize that there are so many other things in life besides constant fretting over the markets. We will not understand them—period. We will respect them and try to do their bidding. We will learn to play in them, have some fun, make some money and not fall down so many times that we forget to get up again. Love, look at the two of us
Strangers in many ways
Let's take a lifetime to say
"I knew you well"
For only time will tell us so
And love may grow
For all we know
…from “For All We Know,” The Carpenters
Until Next Time,
Good Trading and Brain On!
Janice Dorn, M.D., Ph.D.
janice@thetradingdoctor.com
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