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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How did I get into this, and how do I get out of it again, and how does it work?...Soren Kierkegaard
For the past five years, I have made what can best be called an incredible journey. Several times a month, immediately after nightfall, I get in my car and drive 45 minutes north of the city where I live. The mountain roads are narrow, winding and treacherous, especially in the dark. Nonetheless, I continue, trying to be oblivious to the steep falloffs and the hairpin turns that come upon me in an instant. I make this trip for two reasons, and both are relevant to trading.
The first reason is that I decided to face my fear of driving at night—a fear that is made worse by poor night vision and acrophobia from childhood when I was thrown out of a car and found myself dangling over a bridge staring down into the raging waters below. The second reason is that I have a destination to reach and nothing will deter me from it.
As the road narrows, it climbs higher and higher, leaving the paved highway and winding its way up to the top of the mountain where the height is about 5,000 feet. I see the house in the distance, at first as a very large shadow, then becoming more and more clear as I approach it. It is a place built by a longtime friend of mine who made millions by building a business that nobody else wanted. He went through many trials by fire, including law suits, major losses, persecution from those who said it couldn’t be done and personal tribulations, including betrayal from a woman he loved. Nonetheless, he persisted and flourished. At 35 years old, he is a role model, community leader and a seventh degree black belt in Tae Kwan Do. His name is Able, and he is a survivor.
His 15,000-square-foot home on the mountaintop is but a small testimonial to Able’s ability to face the wilderness and return as a triumphant survivor. He refused to quit, kept his discipline and never stopped moving forward until he emerged on the other side. Right next to the palatial estate is a 5,000-square-foot structure called a dojo. As I approach the dojo, I see five or six other cars there, and I park and walk slowly into the dojo. It is immaculate, and there are a couple of parents sitting in chairs while their children prepare for their lesson. These people have also made the treacherous trip up the mountain and brought their children with them. I look at the children, ranging in age from 6 to 14 years old. They are dressed in their white outfits, each with a different colored belt. They are talking, punching, kicking and waiting.
At exactly 7:30 p.m., Able enters the room, and class begins. The class is free for all who dare to make the trip and the commitment. It is Able’s way of giving back to those who want to give to themselves. It is an inspiration and a true joy to see the children so engaged in learning to defend themselves, in making themselves strong, in giving up time they might be spending with video games, TV or just hanging out. Like Able, they are learning the art of survival.
The wilderness is a metaphor for the challenges that we face on a daily basis—both in the markets and in life. The behavior of the markets this year has taught us one thing, and that is how to survive. We survive by preserving our financial capital, and with that, our mental, emotional, physical and spiritual capital. The markets will not rescue us from the wilderness. In fact, they are the wilderness. It is our responsibility to do whatever we can to face them and to survive.
How do we survive under such brutal and unfriendly conditions? How do we make it through the wilderness to the mountaintop? Let me relate something I read in Deep Survival: Who Lives, Who Dies, and Why by Laurence Gonzales (published 2004, W. W. Norton & Company), with Able's dojo and the markets.
There is a Korean martial art called Kum Do. This is a brutal game that involves a fight to the death with very sharp swords. The way it is practiced today, in this dojo on the mountaintop and in other similar places, is with bamboo sticks. The moves, however, are the same. Kum Do teaches the student warriors to avoid what are called “The Four Poisons of the Mind.” These are: fear, confusion, hesitation and surprise. In Kum Do, the student must be constantly on guard to never anticipate the next move of the opponent. Likewise, the student must never allow his natural proclivity for prediction to get the better of him. Having a preconceived bias of what the markets or the opponents will do (prediction bias) can and will lead to momentary confusion and—in the case of Kum Do—to death. A single blow in Kum Do can be lethal, and, as such, is the only blow dealt in that game since the object is to kill the opponent. One blow—death—game over.
Instead of predicting, anticipating, and being in fear and confusion, the trader must do exactly the opposite if he is to survive a death blow from the market movements. A trader must watch with a calm, clear and collected attitude and then strike just at the right time. One second of anticipation, hesitation or confusion can mean the difference between life and death in Kum Do—and wins or losses in the stock markets.
These are treacherous market waters. The sword is always ready to strike you. If you are holding on to preconceived notions, if you are either paralyzed with fear or unprepared for surprises, if you make bets that are too large and put too much money at risk, if you are not prepared to wait for the right moment to strike, you may feel that moment when the sword enters your body and you are out of the game forever.
Please do not let this happen to you. Always remember the long and winding road to the top of the hill in the dark of night. Always remember that victory can be yours if you are patient, ever watchful, non-anticipatory and always on guard for the exact moment when you can strike. This is a game of war, and the spoils are money. It’s your money, your life and your future. You have the power to survive and flourish if you remember the lessons from Able and Kum Do.
Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat…Sun Tzu
Until Next Time,
Good Trading and Brain On!
Janice Dorn, M.D., Ph.D.
janice@thetradingdoctor.com
P.S. Take a sneak peek at my new book, Personal Responsibility: The Power of You, published in January, 2008, at www.personalresponsibilitybook.com .
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