Trading And Falling In Love

[thetradingdoctor 10]

Several times in my writing and perhaps on this board, I have referred to the market as a demanding mistress. There are correlates between trading and falling in love.

 

According to the following recent report from the L.A. Times, falling in intense love is often based on potent threat, fear, worry or shared anxiety.

 

While people can and do fall in love for a variety of reasons, the spark that ignites powerful, tempestuous love can often occur as a direct result of shared danger, threat or perceived fear. The body ‘translates’ the anxiety felt in the perilous place and “gloms†onto the nearest love object in the vicinity at the time of the anxiety.

 

http://www.latimes.com/features/health/la-he-attraction30jul30,1,6896546.story?coll=la-headlines-health

 

Examples are obvious. People who experienced the anguish of searching for relatives following 9/11 sometimes connected passionately when they would never have looked at the other in balmier circumstances. Ex-pats often hook up when they are living in strenuously difficult new surroundings. Victims of disasters often bond. Holocaust survivors met and married in record time, brought together by inconceivable sorrow and grief, and bound by the urgency of living into tomorrow.

 

In my personal life, I experienced something similar in the mid-70’s. At that time I was traveling the world for a multinational pharmaceutical company ( ARRGH!! – nonetheless, it was a nine year gig that took me around the world way too many times for a total of some 1.5 million miles). On an approach to the Rome airport, something happened to the plane. I am not sure exactly what it was, but we thought that perhaps the tail of the plane had been damaged. There were people praying and chanting as we thought it was a crash and everyone was going to die. I looked at the man next to me who was a Finnish scientist of some kind. I had never seen him before we boarded that plane. We put our arms around each other and professed our love for each other. We held each other very tightly and I was in love with this man at the time I knew I was crashing to my death. How silly I felt afterward( as did he), but I will never forget his face, the way he held me and how much I loved him during those frightening moments, which seemed an eternity.

 

In these situations, the body pours out a variety neurochemicals and neurohormones ( dopamine, serotonin, oxytocin, phenylethylamine and others) that bond people to each other in certain ways.

 

If what the researchers have found to be true, men faced with attractive women in the middle of a rickety bridge will much more likely fall in love than those who meet those same attractive females on a ‘safe’ bridge without the ostensible threat of falling to their deaths.

 

The Market Mistress has the nasty habit of putting traders and investors into states of mini-panic---the threat of considerable loss, the anxiety of seeing the a position go against them, and the rush of seeing profits from buying or selling at the time when others are losing.

 

There is an ever-increasing body of evidence that the same biological substrates for falling in love ( or at the extreme, addictive love) are in play for those dancing on the bridge with stocks, options, futures, currencies, bonds, etc. The primitive brain areas ( rat brain, limbic brain) take over completely, leaving the newer cortical areas shaking their heads and powerless to do anything. The electrical and chemical impulses from the limbic rat brain overpower the new brain completely. Please re-read my article : This Is Your Brain On Trading to get a basic overview of how the brain responds to visual stimuli.

 

 

That inability to eat or sleep, the obsession with the beloved trades( especially those with high beta), the strange feeling of ennui which creeps in when the markets are not open, the search for excitement and something to do, going a little bit nutso or doing something wild and crazy just for “kicks†second, sneaking a peak at the markets while working at another job, trading in the car at lunch hour, constant preoccupation with the markets and trading to the exclusion of family and friends, etc. might be more than just normal curiosity about the beloved.

 

Are we having an affair with the market mistress? Is this true love? Is it addiction? Are we being seduced, teased, abandoned embraced? Are we in a large neurohormonal sink where dopamine begets more dopamine and the chemistry of love turns to the chemistry of addiction?

 

What do you think? How do you relate to this from your personal experiences? What effects has this had on your mind, body, family, friends, money and spirit?

 

http://www.youtube.com/watch?v=F0U5JfGYx4c&mode=related&search=

 

 

Thanks!

 

Doctor Janice

[notouch 10]

That's a really touching story about you on the plane but it does remind me of how I've irrationally clung to positions long after there's any rational trading logic to holding them. The phrase I often use is that I'm wedded to a particular position. It's not so much a case of being wedded to a market as being wedded to a particular position - for example a long position in the stock index futures. I think it's a case of fear of the market running away just after I close it - just as an over-possessive partner may cling on to you for fear that letting go will result in the end of the relationship. Being wedded to your positions sometimes works in your favour (you're less likely to get shaken out of the market) but other times it works against you as profits slowly disappear as you live in hope that it will come back in your favour - just like people in failed relationships cling to hope of reconciliation. It's odd because I'm fairly brutal in my personal relationships in that if things are not working out I bring them to an end. I need to be more like that when trading. Just as I always remind myself there are other fish in the sea when a personal relationship isn't working out so I need to remind myself that there are plenty of other positions I could be taking in plenty of other markets.

[thetradingdoctor 10]

Great insight, NoTouch. Are we marrying our positions, or dating them? Are they one or two night stands and "Next" or are we forming an attachment to them because they belong to us?

 

Relationships with positions bear strong resemblance to relationships with people. Either we get positive energy/reinforcement from them, or they sap our energy like vultures and leave us feeling sad, along, abandoned, disappointed, let down and just plain sick of it all.

 

Why do we cling to what is not working and forget about what IS working?

Why do we want to come to the emotional rescue of those stocks/bonds/futures/currencies positions that drain our financial, emotional and physical energy?

 

In life, it is more than likely that the squeaky wheel gets the oil. Who needs help? What is wrong with so and so? What can we do to "fix" them?

 

Why do we stay in relationships in life which are not working? Are we addicted to fixing? Do we think that, with some kind of magical whatever, that the next day will be different and our partner will change and everything will be just fine the way it was ( or we thought it was) when the relationship started?

 

Why do we hold and hope when positions are going against us day after day?

 

The addict is addicted to the feeling he or she had when he or she took that first hit. Those who are chasing the dragon are trying to get back that very first high, while sinking deeper and deeper into addiction.

 

In what ways does addiction to trading resemble addiction to hope in relationships that are not working?

 

Thanks!

 

Doctor Janice

[OAC 10]

Dear Doc:

Most of us here are professional traders or striving to be professional traders. We treat it as a business. Those who don't treat it as a businesss

have no business in professional trading. As for those who have addictions and trade emotionally ? I wish there are more of them because I love to

take the other side of their trades.

[thetradingdoctor 10]

Thanks OAC. Yours is a really great response. Because you have this knowledge and experience, it would be wonderful if you would share with us the following as regards behavioral trading:

 

 

How do you know when people are trading emotionally or when they are addicted? What do you look for on your screens to find them? How do you know when they are trading so that you can take the other side of the trade?

 

Thanks for your great input!

 

Doctor Janice

[Jakew 10]

Good metaphor with many many possibilities. It wouldn't hurt if I was more fidel. Looks like I leave my loyal and beautiful partner in an early stage of a fruitful relationship all to often. No problems with stop losses though.

[notouch 10]

OAC, we may be professional traders but none of us are perfect traders. If you don't confront aspects of your trading behaviour that impair your trading performance then you'll never improve.

[Soultrader 12]

Hello Janice,

 

Thank you very much for this refreshing yet entertaining thread. While reading it allI can think of was... "that is sooo true!". Looking back at my own experience, the relationship I was most emotionally attached to was during the period in my life when things were the hardest and life was full of uncertainty. Very interesting.

[walterw 10]

I think as time goes by and experience is there you dont fall in love with market, but the temptation is there... and we must be aware of this temptations, specially on winning positions... thanks Janice for another great thread... cheers Walter.

[thetradingdoctor 10]

Thank you! There are so many analogies between trading and our lives outside the market, and this is just one of them. This topic is related to fear of loss and fear of success. From a behavioral neurofinance point of view, we are dealing with a core tenant of Kahneman and Twersky's nobel winning economic thesis on Prospect Theory.

 

Why do we cling to what is not working? Why are we risk averse in the realm of profits and risk taking in the realm of losses? In other words, why do we hold loser and let winners run?

 

Thanks!

 

Doctor Janice

[thetradingdoctor 10]

One of my colleagues who is a trader and ocean surfer just sent this to me. Talk about the course of true love, the trials and tribulations, the waves of adoration and despair as we try to find balance,equilibrium and perfect symmetry. Wow!

 

http://www.charthub.com/images/2007/08/06/Jim_ES.png

 

 

Perfect Symmetry from Friday to Monday's mirror reverse image down and

up form such a terrifyingly beautiful form of symmetry and aesthetic

beauty. Some of the most terrifying forms of nature, Hurricane

Katrina, huge storm swell waves, atomic bombs, tornadoes create

nature's most terrifyingly beautiful and perfect forms. Large and

powerful forces are at work here. It is only possible to ride big

waves with respect and with fear firmly in control, but with an

aggressive stance or be crushed and tossed in the maelstrom. This kind

of 20 plus big wave up and big up close has not occurred for over six

years and after such a big down for over 7 years since prior historic

highs and only 2 times in the last 10 years

[PYenner 10]

Doc, I am struggling to get this one.

 

At first it seemed obscure.

Academic what if, maybe, who cares stuff.

A bit Freudian and cartoon-like, too two dimensional, like most philosophy.

 

Kids spend large chunks of both waking and sleeping hours with active fantasy mixed up with reality, enjoying it and learning from it but still "on another planet". You could categorize that as addiction, obsession-compulsion, selective exclusion of reality. It is also very much about learning, test driving our growing image of reality.

 

During the great depression, booze and the movies were two "useless" things that thrived against the odds. People needed to escape harsh realities, be lifted out of a hopeless mire into a childs dream world escape. You could categorize that as addiction, obsession-compulsion, selective exclusion of reality. Hope must survive, not just the body.

 

But I would not say that the intellect is disapproving, however rat brained and counter-productive in an obvious way, in a less obvious way the intellect is studing and judging. Perhaps it is rat on a long leash stuff, perhaps it is blowing a raspberry at a dismal reality. A protest over everything we have learned and been told leading us only to dismay.

 

You seem right on the individual points but I cant string it together.

I end up with a pile of feathers not a bird that flies.

 

Reality is never entirely real to us, our internal model of reality is a dream inside our heads, we are fonder of the dream than of the physical reality which can be far nastier than anything we care to imagine.

 

There are large chunks of market reality that I also need to shut out, unpleasant stuff. Now I go chasing a mistress for the pleasant stuff, not for the nasty stuff. The nasty stuff is no mistress of mine. She is only my mistress when we dance in step, not when she steps on my toes.

 

But bottom line is, I am unlikely to ever want to fertilize a forex chart!

There aint no procreation motivation, uh uh no way.

Keep Freud out of this. Analogy fails. Zero carnal content.

 

To me the promise of the market resembles the promise of the silver screen, to lift you out of the mire, deliver you from some of life's harsher realities.

So, yes and no, agree and disagree.

 

Hope is what draws me, hope of deliverance.

[thetradingdoctor 10]

Pyenner,

 

This has to be among the most profound and introspective of any post I have read on this thread. It is truly remarkable that you have the ability to pour your thoughts out in such an articulate manner.

 

The money in life goes to those who, even for a minute or an hour, lift us out of some reality that we perceive to be painful, intolerable, unbearable, pedestrian, quietly desperate. Think of the TV stars who get paid hundreds of thousands of dollars per one hour episode. Think of the movie actors who get paid millions for one film, the rappers and musicians who inhabit megamansions and drip with bling. Think of the athlete superstars making many millions a year. These and others give us deliverance, transport us to another place and time and another reality. Over eight million people now are living in secondlife.com ( and 40,000 are there right now which means that the others may have found a new and improved virtual community) where they can be anyone they want to be and do anything they want to do. Children play at fantasy and it is fantasy that draws us to it because it is just that. Pornography is fantasy and is a multibillion dollar a year business.

 

 

 

At some level, we are all addicts. Everyone is addicted to something, even though they may not know it or may not tell you.The ego is soluble in alcohol, drugs and and addicting activities. We escape the pounding demands of our ego through substances and fantasies. Those who are addicted to trading escape through the flickering ticks.

 

Fantasy can become our reality. We are in a day and age when we can have fantasy anytime we want it and can play as long as we want. Sometimes ( usually) we pay to play, but it is worth it because it keeps the dream alive and we don't have to remember that which is so painful and that we chose to forget.

 

There is nothing good or bad about any of this. It simply is what it is. We each make our own reality and it is our personal choice. This is far from Freudian psychobabble. This is about how we each chose to spend our time.

This is about taking personal responsibility for living our lives in the way that makes us the most happy and fulfilled. Different strokes for different folks and there is nothing bad about any of it unless it does harm to another sentient being.

 

You want deliverance, Pyenner. From what do you want deliverance? Does hope float and reality bite? What does deliverance mean to you?

 

Thanks for the awesome post, Pyenner!

 

Talk to me as I need to hear you. I might be a little addicted to the way your brain works.

 

Thanks!

 

Doctor Janice

[PYenner 10]

Gee Doc,

 

I had been concerned that I might get my wrist slapped for spamming your threads. Practicing shrinkage without a licence. Particularly the James_gxs thread "coulda woulda shoulda". Apologies if I bounced off the walls with that one but it struck a chord.

 

Now I have the dubious distinction of attracting professional attention.

It was not a cry for help. My big crises were 30 years ago so I learned to dig my way out of them.

 

I would not have described it as articulate, I was struggling to string it together.

 

The mire was more a reference to the depression realities, my own mire is more like the humdrum realities. Forrest Gump on one level, it would be funny if it wasn't for real.

 

I did get a harsh eye-opener 10 or so years back, that poverty in old age could be a nighmare, not a risk to be taken lightly. That did prompt me to wake my ideas up and give money a higher priority. I do fear being helpless in a society that no longer cares, money is a security blanket against that, money is options, independence.

 

My current business was supposed to see me through 15 years to retirement.

The government cut the turnover in half, it meets survival needs but offers no security beyond that. Most businesses take maybe 4 years to get to payoff stage, I can't afford to lose another 4 years on top of the last "investment", because there is a big dream that has been on the back burner since my teens.

 

In that field they say that if you don't do it by age 25 you will never do it.

Senile confusion is the thing that can beat me, so there is something of a race against time and that is not a good thing with trading.

 

The market was a low entry cost business, so no 4 years to get to breakeven. Just learning curve. So yes, miracle answer, holy grail, yeah yeah okay.

 

There have been ups and downs, but there is reason for optimism provided the irrational moments get understood. Familiarity helps.

 

You may think thay our James_gxs has high ambitions, but mine were so improbable that I had to recognize that no-one would pay me to chase that dream. So my career was 2nd choice, from a list of only two. The Government sank that carreer 5 years down the road. There was no third ambition so the bulk of my working life was nothing about aspirations, just survival.

 

Used to be a sometimes computer geek and gamer.

Still gaming in my 50's and it is still escapist stuff but without the insights that you get from some movies.

 

One part of me would love to be computer gaming the market, just fun no serious consequences. So the addiction, obsession-compulsion, selective exclusion of reality equipment is all in fine working order and is being "helpful".

 

Can't fool you about addictive denial huh?

[PYenner 10]

Head in the stars, feet in the mud.

Want to leave the mud behind, before senility beats me.

The price of daring to dream an ambitious dream.

[PYenner 10]

Umm maybe it will save me some time on the dissection slab if I tell you what you don't want to hear.

 

I have probably been trading or demo trading 40-60 hrs/week for the last 6 months, plus about 20hrs/week of mundane business.

 

I got used to working 80hrs/week some years ago, brain fog sets in at around 100hrs/week and makes you useless at around 120hrs/week. Provided you alternate, paperwork and thinking in the morning, doing from then on, it is actually efficient. It worked anyway, so now I tend to expect it when needed.

 

Switching to a trading time window is one of the things I will be looking at with some reluctance.

 

Learning involves questioning and it is the more difficult questions that are last to get answered. So there is a tendency for the questioning to increasingly undermine the thinking that the trading relies on. That is also getting looked at, there is a spiral involved when I go off track, it is the early warning things that I need to pay more attention to.

 

It isn't just the siren song of the market, there has been another siren calling for much longer and that seems to be where my heart lies. So be it.

 

The choice of a golden bull for an avatar has less to do with the markets and more to do with recognition that while stubborness is no substitute for an adequate IQ, you just gotta go with what you have got.

 

On second thoughts, that lot might get me certified.

Bone headed Taurus.

[thetradingdoctor 10]

Pyenner-

 

The government will not take care of us. This is a delusion perpetrated on the gullible masses who believe that all they have to do is work their butts off for most of their adult lives and social security will provide. Ugh! You are good to go in this aspect since you see it and are attempting to do something about it.

 

There is still a child inside of you who loves to play. This is part of the conflict you are expressing right now---the playful, innocent, stubborn child who doesn't have to grow up. Yet you must. This is where the difficult questions come in--each question leading to another and another.

 

When on is truly committed to trading, something magical happens. The universe moves. You feel it all around you and know that you are truly called to this siren.

 

But what of the other siren that calls you? Do you remember the story of Odysseus?

 

In Greek mythology, Odysseus had to sail within earshot of the Sirens. No sailor could resist their seductive call. The penalty for giving in to this irresistible temptation was death by drowning - the fate experienced by all who had come before. Appreciating the danger, Odysseus filled his men's ears with wax so they would not be able to hear the Sirens. Odysseus wanted to hear what the Sirens sounded like. However, he knew that if he heard the Sirens he would be unable to resist, and so he pre-committed his future behavior by having himself tied with rope to the mast of the ship.

 

The plan was successful. When Odysseus and his men sailed past the island the Sirens called, but the men could not hear so they kept rowing. Odysseus heard the Sirens, but he could not give in to the temptation, because he was tied to the mast.

 

The Lessons of Odysseus and the Sirens:

1. Odysseus made his plans in advance. If he had waited until he heard the Sirens to try to figure out what to do, it would have been too late.

 

2. The men did not give in to temptation because they did not experience it. Likewise, you can engineer your environment to minimize your exposure to temptation - at least until the healthy habits have become well established - i.e., avoid high risk situations.

 

3. Because no sailor had previously survived, some might take a defeatist attitude and passively accept the inevitable defeat. But Odysseus was a hero, and approached the challenge as a problem to be solved. He devised a well conceived plan, and executed it as intended.

 

4. Finally, and most importantly, Odysseus experienced the temptation, but did not give in to it. How did he accomplish what had previously been impossible? Odysseus understood that the sirens had the power to make him act contrary to his current wishes. So while he was still in his right mind he predetermined his future behavior by having himself bound to the mast of the ship. It would be the rope, not the siren's call that determined Odysseus's behavior when they sailed past the Island of Circe. As Odysseus was bound by strong rope, so you can be bound by your committment to yourslef.

 

Thanks for you always stimulating posts, YPenner!

 

Doctor Janice

[Guest cooter]

The government will not take care of us. This is a delusion perpetrated on the gullible masses who believe that all they have to do is work their butts off for most of their adult lives and social security will provide. Ugh!

 

Exactly. For those who needed a real world example, just look at what happened when Katrina hit a couple of years ago.

[PYenner 10]

Thank you Doctor Janice

 

As far as I can tell the child/fun thing is the bottom of the iceberg, the least visible bit and the part that was most reluctant to be questioned. It surprised me that a most trivial aspect seemed to have the most compulsive kneejerks.

 

The old me has been a durable model, have a lot to thank it for.

Not sure I trust the notion of rebirth, yet there has also been obvious reason to aim at one, extensive reshaping that addresses the future rather than the past.

 

My overview comes but slips away again.

I need to revisit the scene a few more times.

 

It is about entraining constructive habits as you say.

In business, once you see the need and see the means, it really takes care of itself, just happens and it is pleasing to see functional stuff happening on auto pilot.

 

In my family I see people identifying themselves with a rat phobia, its as if they cling to a lead weight believing it to be a life belt, believing it to be "me". You should have disposed of that in infancy, what do you gain from carrying pointless baggage? It denies you freedom to act and think.

 

Not so easy to see it in yourself.

Thing is if I can genuinely see the need, it should largely fix itself.

Thats how it used to work anyway.

 

Regards

[PYenner 10]

Exactly. For those who needed a real world example, just look at what happened when Katrina hit a couple of years ago.

 

I'm going right off topic here, but governments around the world have acted quickly to prop up the banking system. It seems to me that the only thing that governments do by reflex is deception and PR, same thing really. It is making me uncomfortable. False confidence is not what I want.

[Soultrader 12]

One of my own personal complex I hold is my lack of book smart due to my limited educational background. Many traders on this board have the academic knowledge and the wisdom through years of life and trading experience ahead of me. Although I have been told that I am extremely street smart, this is something I have been working hard to grow. It has been a life of academic catch up for me the past few years..... thank you very much for sharing your posts PYenner and the responses Dr. Janice. It is through these readings that my knowledge grows in creative ways and allows me to originate thoughts and ideas on my own.

[PYenner 10]

That inability to eat or sleep, the obsession with the beloved trades (especially those with high beta), the strange feeling of ennui which creeps in when the markets are not open, the search for excitement and something to do, going a little bit nutso or doing something wild and crazy just for “kicks†second, sneaking a peak at the markets while working at another job, trading in the car at lunch hour, constant preoccupation with the markets and trading to the exclusion of family and friends, etc. might be more than just normal curiosity about the beloved.

 

Is this true love? Is it addiction?

 

I rate it as addiction. Got all the above and going nutso about it.

It aint my idea of businesslike. Nor my idea of love despite the parallels.

 

Fwiw you can add physical and mental fatigue to the list of triggers for cupids arrow but while it is potent it is resistable. Workplaces are actually the most dangerous, when you see someone daily it wears down your resistance and leaves you with no options. First you notice them, progressively you need to see them or your day is meaningless frustration. Addiction.

[Jakew 10]

And someone said it's very well to approach trading like dancing, allowing the market to lead you. No wonder majority of men are poor traders:)

[PYenner 10]

So she is distinctly kinky and he is the only one taking damage...

[PYenner 10]

Couldn't find the one where she breaks his neck with her foot.

But anyway he'll be bahk for another beating.