Drowning In Denial

[thetradingdoctor 10]

DROWING IN DENIAL

 

Janice Dorn, M.D., Ph.D.

The Trading Doctor

 

Nothing is easier than self-deceit. For what each man wishes, that he also believes to be true . . . Demosthenes (statesman and orator of ancient Athens)

 

Why do we run from our own truth? What makes us close our eyes and bury our heads in the sand rather than confront what appears to be a harsh reality? Why are we compelled to cling to dysfunctional relationships and losing stock positions in the midst of increasing drawdown of our mental, emotional, physical, financial and spiritual capital?

 

We do this because we are driven by hope. We behave in a certain manner because we want to believe that, somehow, somewhere, sometime, things will get better. We refuse to cut losses in our personal lives and portfolios because it is an admission that we are wrong; that we can't make good decisions; and that we will have to say goodbye again. The final saying “goodbye” to someone or something for which we yearned, lusted and made our own is painful. We cherished this as a possession, believed that everything would be fine if we were a little more patient, held on just a little bit longer and kept doing everything we could to make it right. With each passing day, we were dying, slowly, inside.

 

As a psychiatrist and trading coach, people have been coming to me with "problems" for nearly 30 years. They have many challenges, including bad jobs, hideous and abusive relationships, childhoods from hell, depression, self-destructive behaviors, addictions, compulsions, anxieties, phobias and the devastating consequences of undisciplined, risky and inconsistent trading. It's always about what's wrong. After all, why go to a shrink or a trading coach if things are wonderful? Why celebrate the positive aspects of one's life when there is so much misery and despair? Why bother to take personal responsibility when it is easier to remain in victim mode?

 

My writings about the market were born out of these experiences, strengths and hopes -- both yours and mine. No matter what, we are always determined to "fix" the problem; to make the pain go away; to stay with the losing relationship or the underwater position because we "know" that everything is going to be fine if we just keep working on it. It will be OK. The person we love will change and the stock will come back. Forget about the fact that it is ruining our lives, so that we can't eat, sleep or exercise properly and can't remember the last time we felt any semblance of serenity or joy. Just deny that the whole thing is happening and everything will, like some magic trick, turn out just fine. Won't it?

 

One of the saddest lessons of history is this: If we’ve been bamboozled long enough, we tend to reject any evidence of the bamboozle. The bamboozle has captured us. Once you give a charlatan power over you, you almost never get it back . . . Carl Sagan, (American Astronomer and Astrobiologist)

 

Years ago, I bought many thousands of shares of a low-priced stock because I became convinced that it was the next best thing to sliced bread. I paid no attention to anything I read or heard because the stock was being touted continually by a trader guru whose opinion I respected. It made no difference to me whatsoever that the company had less than competent management, massive debt, no revenues and one of the ugliest charts on the planet. I had grown, fostered and nourished a belief that this was going to be the big win for me. I truly believed that I would get in on the ground floor and then watch with delight as Wall Street finally noticed what a groundbreaking product this company had and that the stock would start going up and up. Visions of a ten or twenty bagger infiltrated my brain and made themselves perfectly at home in my limbic system. I started having personal feelings about this four-letter stock.

 

I loved it; knew it was going to live up to every expectation I had about it; read every piece of news I could about it; told friends that this was the next biggest and best winner and it was only a matter of time before everyone would see the beauty and power that I knew. I was there first, so no worries at all. My belief system was so skewed and distorted that I could not see the truth. I did not want to read or hear anything negative about the stock, since I was now in love with it to the tune of tens of thousands of dollars. I owned it. It was my prized possession and I felt like, in some way, I needed to defend it against all naysayers. Like a marriage or a new relationship, I didn't want to hear anything bad about it. My brain was filled with the neurochemistry of new love and attachment, so please don't bother me with reality. Just like every other new relationship, stocks are entered into on hope.

 

I will spare you the details of the emotional roller coaster I rode with these stocks for over two years. Not only did I break every rule of investing and trading, but my mood swings were seemingly out of control. Graphically, it felt something like this:

 

 

The worst lies are the lies we tell ourselves. We live in denial of what we do, even what we think. We do this because we're afraid. We fear we will not find love, and when we find it we fear we’ll lose it. We fear that if we do not have love we will be unhappy . . . Richard Bach

 

I have omitted the moaning, wailing, gnashing of teeth, pulling of hair, screaming at the computer screen, and blinding migraine headaches, but you get the idea. In retrospect, it was two years of sheer madness. What started out as adoration morphed into desperation, disbelief and sheer disgust.

 

The last week of this sordid affair, I sat in disbelief as the stock lost nearly 30% of its value. That was it. I simply could not take it any more. I was sick and tired of being sick and tired. I refused to endure one more minute of this. I was too good to suffer any more. I could no longer sit in misery and hope and wait for the market to throw me a bone so that I could get all excited and happy again. It was just simply too much torment and I was no longer taking responsibility. I was letting the markets dictate to me how I would feel that day. I was allowing the markets to exploit every aspect of my personality that would cause me to be weak, tricked and off balance.

 

Denial ain’t just a river in Egypt…attributed to Mark Twain

 

I had to get my head out of the sand, get out of denial and SELL. Tens of thousands of dollars vanished into the market abyss. Two years of mental machinations and emotions which covered the entire range of any "feelings" chart I had ever seen also vanished. I bought with hopes and dreams and sold with despair and defeat. I ran screaming into the other room; then, suddenly, I felt a sense of utter calm and tranquility. I was free from the daily suffering, from the agony of thinking I knew something when it was really about how much I did not know. I was no longer a prisoner of brain scramble, endless tormenting of self, and the depletion of personal energy. By taking action, I stripped through the denial and magical thinking. I took personal responsibility, empowered myself and gained great courage. Yes, I have scars and wounds which I cherish because they are there to remind me of hard fought times and lessons learned. It is idiocy to hold and hope, and bravery to admit you are wrong and get out before it's just gone too far. This experience is etched in my brain and written on my soul. I shall never forget so as not to repeat it.

 

I committed every one of the mistakes a trader could possibly make! I drove myself into a state of almost complete mental, emotional, physical and spiritual drawdown. I broke my cardinal rule of "Don't Lose Money, Cut Losses Quickly!” I held on because for some reason I could not get myself out of denial. It was only when the denial lifted that I felt both courageous and free. I faced the truth and got out of hope and fear. Through this brutal experience I learned lessons which I teach to others daily. I know what it feels like because I have been there. I know what courage it takes to play this great game and to rid yourself of false evidence; to stop playing ostrich and to deal with the absolute truth which is staring you in the face.

 

 

In the markets, as in life, the only way to grow and preserve yourself is to get rid of what is not working for you. It doesn't matter if it's your relationship, your house, your car or your position in the markets. If you do not have the courage to cut your losses, they will fester and take you down with them. To see and know in your heart what is right, but to not do it, is a complete lack of courage. To be courageous is to do, in the face of seemingly overwhelming obstacles, what must be done. Courage is getting out of denial, admitting you made a mistake, and taking personal responsibility. Courage is freeing one’s self from the shackles of lies, hopes, dreams and white picket fences which are built upon shifting sands. Courage is listening to the voice inside of you and following your heart, which never lies to you. Only in knowing what is false does one come closer to the truth. Courage is the eternal and heroic struggle to find and face your authentic self. Look it squarely in the eyes and know that you are now becoming the person you want to be.

 

Many of you spend your entire life running from the mistaken belief that you cannot bear the pain. But you have already borne the pain. What you have not done is feel and see everything you are beyond that pain...Kahlil Gibran (artist, writer and poet)

 

Until next time

Good Trading and Brain On!

 

Janice Dorn, M.D., Ph.D

The Trading Doctor

© Copyright 2007 – Janice Dorn, M.D., Ph.D. – Ocean Ivory LLC.

 

Dr. Dorn is a psychiatrist and futures trader since 1996. She has written over 400 articles on Behavioral Trading and has coached over 600 traders. She will answer questions about trading neuropsychology. She may be reached through her website: The Trading Doctor

[walterw 10]

What's your point?

 

This reads like advertorial for a piece of software for 100% winning trades (but don't order yet), or a tip sheet or some new guru trader counselling service.

 

What are you saying that hasn't been said a million times before? Differently? Anything?

 

Do you really trade Janice, or do you just feed on the masses of Traders that think they don't know what they really need to do to trade well?

 

There's a massive secondary industry growing up among the principal activities of the trading fraternity. They're called brokers and data providers.

 

Then there are the tertiary parasites called trainers and mentors. And then there are the bottom-feeders called trading psychologists.

 

Give me a break!

 

James, just how much increased traffic is worth the shame of being associated with this form of explotation of the weak-willed and inexperienced?

 

Bramble : very unrespectfull post... showing a great piece of ignorance from your part...

 

We traders DO need data providers, brokers , software, mentors and psicologist... and of course many of our providers not necesary are traders...

[Guest cooter]

Bramble : very unrespectfull post... showing a great piece of ignorance from your part...

...

 

There's nothing disrespectful, IMHO, about his post. Just the typical trader frustration that many of us deal with on a daily basis.

 

I'm also questioning the value of Dr Janice on this site, and have myself ruffled a few feathers already by challenging her credentials, based on the tone and content of one of her initial posts.

 

That being said, I'd find her contribution far more helpful to the TL community if the good Doc would actually take 5 mins of her time each day to visit her forum and interact.

 

This means responding to questions that are placed on her forum specifically for her input and response. There are several fresh questions that have yet to be answered by her.

 

Until then, you can expect some members of the TL community to find this forum a waste of space and time.

 

Just my two ticks worth....

[walterw 10]

I think any poster here deserves respect independently of how you find the content usefull or not...

 

It is evident that for both of you her inputs are irrelevant, well ok, thats fine, for many other people yes it is...

 

I think we are priviledged to have her here, would hate to see her go for people that have such bad manners like bramble...

 

So making comentaries of that nature its totally out of place...

[Guest cooter]

You assume facts not in evidence, Walter.

 

I never said nor implied that her inputs were irrevelant.

 

Quite the opposite, if you've bothered to read my posts in her forum, you'd know that.

[walterw 10]

Nothing wrong with you cooter, I think bramble crossed the line with the doctor as with James...

[Soultrader 12]

I have to agree that Bramble's post was not necessary. Every contribution/post should be treated with respect. If traders have something to say.... contribute and not just trash another members post/article. I have invited Dr. Janice on board with us here to add value to this site. Where else can traders freely interact with trading psychologists with valid credentials? My request is that if you do not have anything positive to post, keep it to yourself. Any ET type behavior here... I do not tolerate. Thats what ET is for.. not here.

[brownsfan019 17]

I can see where Bramble was coming from; however it could have been phrased a tad more friendly. I think the point was if the doc was adding value to the forum or simply using it as a way to peddle her services. I'm not going to comment on either, but it's a valid question.

 

As others have said, there's a few threads in her forum (I started one) that have yet to get a response from the doc. We are having good discussions there, but point is that these posts were put in her forum on purpose. If she's planning to be a contributing member here, then contribute. Perhaps something happened and she's unable to get to the forum, but as a new vendor/contributor it would help if she was actively contributing.

[Soultrader 12]

Hi guys,

 

Doctor Janice is currently away at the moment. My apologies... I published this article on her behalf. She should be back shortly and will be more active here on the forums.

[rolange 10]

Bramble : very unrespectfull post... showing a great piece of ignorance from your part...

.

 

Sorry to disagree but I would say it demonstrates a great deal of knowledge.

 

Physician heal thyself.

[steve46 12]

I think one has to hope, and to aspire, to rise above one's own conceptual limitations. Believing this, I look inward regularly thinking to uncover that which lies dormant. In order to do this, I think we have to learn to forgive ourselves first our shortcomings. I believe we have to recover those parts of our lives that embarrass us, that shame us, that we try to isolate ourselves from, that we try to bury..

 

To the extent that a person can come to terms with this, I think they eventually learn how to value themselves and along the way to mobilize enough self-respect to take responsibility for what they know...

 

In my opinion this is part of becoming more aware. I notice that as I progress along this path, I've been able to become more competent, more willing to be disciplined, and a better observer.

 

In practical terms, I notice improved impulse control, improved ability to put the markets in a useful context, improved ability to tolerate frustration. Unlike the past, I can now stay in a trade long enough for my edge to kick in.

I see the market and I accept that I am going to win and lose.

 

The idea of "drowning" seems to imply trying to hold feelings at arms length, being unable to do so, and finally being overcome. Having spent a considerable amount of time avoiding that feeling, I can say with some authority that there is a part of us that can't "drown". You just have to find it.

 

I admit that I haven't read any of the Doctor's articles. This is just my take on how denial limits us.