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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TRADING WISDOM
VENERY AND THE SEROTONIN SINK
Up, down, up, down..nauseating trading range. Whipsaw. Traders in greed one day, and in fear the next day. What is going on? The markets are bipolar and fibrillating. The markets are manic-depressive and volatility is increasing. Just when you think they are moribund and going down, they wake up and rally. Just when you think they might start really rallying ,they go down and look like they are finally rolling over.
And guess what? The markets are going nowhere and have gone nowhere in weeks. Many of you are also on an emotional roller coaster, as the markets are doing exactly what they always do...try to take your money before you can take theirs and catch the maximal number of people off guard. This is particularly true of the index traders who, unless they are highly skilled, are in total whiplash and very much in need of medical treatment at this time. Or is it whipsaw? Same thing... basically a pain in the neck and some large fluctuations in your trading capital unless you are very swift and can range trade. Not too many can do this..Yet!
It is the nature and the rules of this great game of trading and investing. People fear the most when they should be the most greedy, and are the most greedy when they should be the most fearful.
It is in the nature of the market mistress to punish you as much as possible... IF you allow it. And, unfortunately, many of you do.( More on masochism and the desire to lose. ( more on the desire to lose coming soon to a Trading Wisdom in your neighborhood )
Throughout all of this, the, majority of our subscribers are NOT in pain, suffering or emotional whipsaw. These are the people who took positions on the alerts and are holding through. Holding through is the most difficult thing for some of you to do. You--blinded, hypnotized and diseased by tick-itis are doing everything you can do to hurt yourselves. What might that be, you ask?
Well, think about how many times you sold at the lows after a portfolio position had already dropped a few points so you decided it was time to get out? Or shorted at the lows because the stock was down so much that you thought it was now safe to get in? Or- how you bought near the highs after a portfolio position had already run up nicely so you decided it was time to get in. Then the loathing and self-hatred starts. The anger appears and manifests in every aspect of your life; it carries into everything you do, both in and outside of the markets. It unleashes an inner world of rage and loathing and affects your interactions with your family and society. It is not a good thing.
Venery is an old English word for a noun which describes a collection or a group. My favorite is a group of larks...an Exhaltation of Larks. That is just beautiful, isn't it?
But, unfortunately, in the markets, we are dealing with a less-pleasant -sounding venereral term (YES- the adjective is venereal so no perverse thoughts, please!) . A venery of rat brains. Bring on the cheese, people!
At any given time, on any given trading day, I witness the following nouns of venery:
- a colony of rat brains
- a horde of rat brains
- a mischief of rat brains
- a pack of rat brains
- a colony of rat brains
- a swarm of rat brains
- a plague of rat brains and my very favorite: an infestation of rat brains.
Your rat brain is the most primitive part of your brain. It is the seat of greed and fear. It is what causes you to turn on yourself and others when things are not going your way. It is the part of your brain that tricks you into addiction and craving for excitement or danger. It is the part of your brain which prevents you from being able to pull the trigger when you get an alert. It is the part of your brain that terrifies you into selling out of your position too soon or too late. It is the part of your brain that chases price.
It is a massive rushing stream of dopamine, serotonin and any number of neurotransmitters and electrochemical impulses which you have not yet learned to control. It is the part of your brain that you either learn to master, or forget about trying to be a consistently good trader. Your rat brain is still out to get you. Always has been and always will until you get a grip and get it under control. AND....when you get an infestation ( a venery of rat brains) the process feeds on itself. Fear breeds more fear, greed breeds more greed, anger breeds more anger. Suddenly, there is no longer any order. There is only chaos, confusion, dissembling and defeat.
I am not advocating that you trade like a robot without emotion ( although many superior traders do that, and..of course..we now have the massive program trades which flood the markets whenever the programs fire). Maybe the people who programmed the machines had emotions while they were programming, but- once programmed- there is no emotion. There is only a trigger. Programs fire. Bang and that's that.
So- you are trading against machines. The futures traders know this very well and must be constantly vigilant for program trades. But stock traders also must now realize that, more and more, the markets are coming to be dominated by program trading, and what has been referred to as the program trading architects.
It is you, or your trading group, against them. If you are rat-braining and allowing yourself to switch on a minute to minute basis from fear to greed to joy to sorrow from bullish to bearish, then, not only will your rat brain get you ( eat you up and spit you out by dissipating every last bit of emotional energy from you), but the robotic program trades will also get you. They don't have feelings and they don't care on bit about you, who you are or what you are feeling. They want to take your money before you take theirs.
The choice is yours. Either get a grip, get to know and control your the rat brain ( especially the venereal context with fellow traders), take the alerts, take the positions and hold through.
If anything changes, you will get an alert. If you do not get an alert, then nothing has changed. Step away and do something nice for yourself....even if it's for a hour. Lift weights, do some yoga, hug someone you love, go fishing, nurture yourself, call your mother, don't call your mother, eat some healthy,clean ( preferably organic and not cheese!) food, meditate, go outside and take a walk or a run...whatever it takes to get yourself centered and away from the addiction to ticks and the drowning in your own serotonin sink and the vast venereal neurochemical ocean of the millions of other traders.
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