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30-May-2006
Human Be-ings, by Dr. Janice Dorn

Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish

--John Quincy Adams

There is an old Zen Koan that says: Don't just do something...sit there.

How appropriate for these markets.

The most difficult thing for traders to do is to sit there and wait. Why? Because we are in a society that is on a total dopamine binge, and this is never more clearly manifested than by those who absolutely have to be in the markets at all times, absolutely need to be trading, and absolutely cannot wait. They are human do-ings.

There is a wonderful advantage to waiting. It allows you to be neutral, it frees you from always looking for bearish or bullish views to justify your positions. Granted, you are not making money, but you are also ( and much more importantly) not losing it. You can take time to reflect, to study, to adopt some healthy exercise and dietary habits, and to be a better person. Just waiting without stress for the right opportunity allows you, in a way to be like an invisible observer of the scene around you. It frees you from active involvement in the chaotic and often reckless behavior of others in the markets, and it puts you and your trading plan into clear perspective. It allows you to see yourself as a human-being, rather than a human do-ing.

When you first started trading, what did you hear constantly? Preserve your capital. Preserve your capital. You heard it, but maybe you did not listen, or did not understand. If you have no financial capital to use, you are out of the game. If you are chasing or getting in just to get in and are getting whipsawed daily and you are losing, drip by drip or in larger chunks, you are out of the game. If you wait, take time, assess the situation and then pounce like a jaguar at the right opportunity, your chances for trader longevity increase significantly. You have preserved your financial capital, and deployed it appropriately with a good risk/reward ratio.

But, there is something that many do not recognize about capital. It is both financial and psychological.

Your financial capital is critical, of course. Money is money and money buys stuff and makes people happy. However, money is a by-product of the great game of trading.

You psychological capital is at the essence of the person you are....both as a trader or an investor and as a human being. The number one rule of trading is: Preserve your psychological capital. This means making yourself strong and healthy...emotionally, spiritually, physically and intellectually.

This means standing apart from yourself and looking at yourself with a critical eye, almost as if you were advising someone else what to do, how to trade or how to live.

This is the most difficult journey you have as a trader. Your psychological capital is all you really have. You can go out and earn more money, you can turn your money over to someone else to manage it for you, you can stop trading and invest in some new activity. You have infinite choices about what to do with your money. But- you have only one body, one mind and one spirit. When they are distressed, sleep-deprived, contaminated with continual worrisome thoughts or in a toxic state because of bad food, bad environment or bad relationships, then you have nothing but despair, self-loathing, anger, depression and lots of things around you seem to be falling apart.

In the end, if you lose your health, you lose everything. Money might be able to assuage this misery, somewhat like putting a bandage on a great gaping wound. But, the wound breaks open, becomes infected and just gets systemically worse unless you deal with the source of it. As always, you have the power to be the best you can be...in every aspect of life. It's really quite awesome when you think about it. You are the problem and you are the solution. Go for it! It just doesn't get any better than that. Find the freedom and serenity that accrues to you when you refurbish and restore your psychological capital. If you want to hear about Mad Money infotainment insanity, you know where to find that...time, channel, and big shout-outs.

If you want to get a true picture of who you really are, what you are capable of doing and becoming as a trader and a human being, then stop looking outside of yourself. Go within, as the answers are all there. I promise you that it will be the most amazing journey of your life.

Yesterday I dared to struggle. Today I dare to win

--Bernadette Devlin

Dr. Mark Goulston replies:

Maybe we all need to exhale

    Acting out makes stress worse;
    Venting exhausts you and others;
    Suppressing hurts your health;
    Exhaling opens your mind.

A few years ago, a stressed out executive was venting loudly to me about all the pressures on him, the things he had to do, the people he had to please, etc. After fifteen minutes I interrupted him and said firmly, "Shh! Listen!"

He was startled: "Listen to what""

"Listen to the quiet," I replied.

"The what"" he responded.

"To the quiet," I continued, "it's located between the noise in your head and the noise in your life and right now it is screaming out to me and you to be heard."

"Huh" he said, still confused.

"Close your eyes," I instructed, "and breathe slowly through your nose and in a little while you'll begin to hear it."

After several minutes he began to tear up, then cry. This went on for five minutes, after which he slowly opened his bloodshot eyes. He had a look of irony and a smile on his faced mixed with the fact that he seemed emotionally ten pounds lighter.

"What was that about"" I asked.

He chuckled wryly, "That (i.e. peace) is what I've been looking for all my life. And everything ,and I mean everything, I do to get me there, takes me further away. That's a lot to think about."

And think about it he did, because he got the chance to exhale, relax his defenses and open his mind.

Stress is not bad. It is actually good for you. It causes you to focus, become determined and test your mettle. Stress is only destructive when it crosses over into distress. That's you lose sight of your important long term goals and instead look for what will relieve you now. When you become distressed you sacrifice your future to feel better for the moment.

Acting out, a.k.a. shooting from the hip, is the worst way to deal with distress. In doing this you bypass your human mind and react from your animal brain. You react in a "fight or flight" manner and the chance for a positive outcome is small.

Venting is slightly less destructive, but is still likely to trigger either retaliatory defensiveness (either immediately or delayed) or will exhaust the person you are aiming it at. In either case, that person will resent your trying to make your problem their fault and responsibility to fix and is not going to want to deal with you in the future.

Suppressing either a behavioral or verbal reaction to stress is even less destructive to your outside relationships, but will suck the vitality out of you and if left unchecked will lead to "burnout" and/or physical health problems.

Only exhaling enables you to experience and express (like draining pus) your feelings in a way that doesn't attack others or yourself. It's the only response that relaxes you and then opens your mind to solutions from others (especially to those you are grateful to for having given you the chance to exhale). And that offers the chance of resolving the source of the stress and preventing it from reoccurring.