Trading Markets Trap #2 Failure to Take Personal Responsibility for Your Trades & Investments
InvestorEducation / Trader Psychology Dec 02, 2008 - 06:17 AMBy: Dr_Janice_Dorn
"One can have no smaller or greater mastery than mastery of oneself… "
- Leonardo da Vinci
We buy stocks, options, futures, currencies, commodities, etc, because we want them to go up and make profits. We short them because we want them to go down and make profits.
Bottom line:
(1) We trade to make profits
(2) So does everyone else
(3) Someone has to win and someone has to lose. You need look no further than the futures markets to understand that this is a zero-sum game.
So, why do so many of you lose money consistently? Why is it that you put on a position and it seems like it goes against you immediately?
For most people the answer is clear: “It's "THEM. THEY are doing this to my position. THEY are taking it down. The newsletter writer is an idiot; the guy who told me to buy the stock has no clue what he is talking about. What is wrong with all of these people? Don't they know that this stock has a really low P/E, great earnings history, is innovating and is a fantastic company? After all, I heard it mentioned on some TV show, and the almost all the analysts have a buy on it. Why is it not going my way?
This has nothing to do with me. It's all of THEM that are out of touch. I am just a victim sitting here watching it go against me and I have no control whatsoever. I'm a helpless pawn in this game, victimized by all of “da boyz” constantly doing things to me and out to get me. How dare they? Don't they know that I am right and THEY are wrong?”
In life outside the markets, we have a society focused highly on litigation. Everyone one of you is either suing someone, being sued by someone or knows someone that is suing someone or being sued by someone. In the markets, there are lawsuits almost daily, and some come to your mailbox in the form of class actions (where the attorneys always win the most anyway). Others are much more high profile, involving billions of dollars against firms, funds or individuals. This is part of the great game of being in the market. Lawsuits happen. Perp walks happen. Investigations happen. There are consequences.
However, where you are concerned, it is more insidious. There is absolutely no scarcity of people, places, or things to blame. Think about it for a minute, and ponder many times you personally have blamed some unknown or unseen person, place or thing for the fact that your positions are not doing what you want them to do. Who have you blamed? The hedge funds, market makers, floor traders, Bernanke's Fed, arbitrageurs, quants, cabals, Working Committee on the Financial Markets, economic reports, climate changes, war, threats of war, your ISP provider, your brokerage, presidents and rulers of countries, newsletter writers, radio and TV market commentators, momentum traders, value investors, CEO's, CFO's , people in your own trading room, people in other trading rooms, short sellers, program trading architects, grain farmers, China, Japan, and every other country if necessary, your trading platform, your scans, your dog, wife or your screaming child...( the list is incomplete, so please feel free to add your own contribution, as space does not permit the ad infinitum naming of every person, place or thing that could be responsible for your losing position)
The reality is that, to one degree or another, every one of these forces may be in play every minute of every trading day, so go ahead and blame away. If you do not comprehend the simple fact that somewhere, somehow, someone is manipulating some part of the markets every day, then you have absolutely no business playing the great game of trading and investing. So--hurl invectives, bang on your computer, yell at someone or have another drink. There is nothing you can do about it...right?
Wrong!
There is one thing you can do about it and that is to take personal responsibility. None of these people, places or things forced you to put your hand on the mouse and click it. None of these people, places and things picked up the phone and called your brokerage. You did it, and you are responsible.
If you find yourself making excuses constantly, you are not taking personal responsibility. You are lying to everyone around you. Worse than that, you are lying to yourself. If you do not get out of your ego and off your pity potty, and realize that you are totally responsible for every thought, word and action ( both in and out of the markets), then you are covering yourself with a shroud of secrets, excuses and lies. The outcome is that you are putting yourself in the position of a victim and taking away both your self esteem and personal power. In your secrets lies your sickness. Excuses and lies come always in moments of weakness and are symptoms of low self-regard and the inability accept the truth of what you have done.
The benefit of taking complete personal responsibility for your thoughts and actions is that you attain true freedom and power. You cannot control all of those visible or invisible hands, so don't even try. However, you can control yourself-- how you think, feel and act. This is called moving forward from an internal locus of control. The majority of our frustrations in life and in the markets stem from the fact that we blame others or look to others for approval (external locus of control.) This sets up a spiraling series of negatives that tends to feed on itself.
Once you give up blaming others and look to yourself (internal locus of control) as the source of whatever is or is not right with your trading or your life, you find a new freedom and a new happiness that is born of radical honesty and authenticity. You will become more calm and centered. Nagging doubts and worries about what others are thinking or doing or saying will fade away. Everything in your life, including your trading, will improve enormously.
How can you begin this journey to become personally responsible and a more evolved human being, trader or investor?
WHAT DO YOU SEE WHEN YOU LOOK IN THE MIRROR?
First, take a very hard and close look at yourself. Go inward with radical honesty and do not be afraid of what you see or feel. These traits are part of you and make you both unique and extraordinary. Use your strengths to deal with what you perceive to be your weaknesses. Grow your strengths and let the weaknesses fade further and further into the background.
Second, take total responsibility for everything you do, say and think. Thoughts are the precursor to actions. Accept what you cannot change. Instead, ask yourself what you can change, what steps you can take to effect that change, and then just do it.
Lastly, see yourself as powerful and in control of yourself. Relinquish any tendencies to control others. Accept others without condition, as you would like them to accept you. Take action to evolve yourself to a place of radical personal responsibility by knowing that all changes on the outside start from commitment within.
"When a man points a finger at someone else, he should remember that three of his fingers are pointing back at him..." - Louis Nizer
Until Next Time,
Good Trading and Brain On!
By Dr. Janice Dorn, MD, PhD
Prescriptions for Profits
www.thetradingdoctor.com
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© Copyright 2006-08 -- Janice Dorn, M.D., Ph.D. -- Ocean Ivory LLC
Dr. Janice Dorn is a graduate of the Albert Einstein College of Medicine, where she received her Ph.D. in Neuroanatomy. She did her postdoctoral work in Neurophysiology at the New York Medical College. She received her M.D. from La Universidad Autonoma de Ciudad Juarez, did one year of clinical clerkships in Phoenix, Arizona. and then completed a Neurology Internship at The University of New Mexico in Albuquerque. For the past twelve years, Dr. Dorn has focused her attention on trading, mentoring and commentary in the financial markets, with emphasis on Behavioral NeuroFinance, Mass NeuroPsychology, Trading NeuroPsychology, Futurism and Life Extension. A graduate of Coach University, she is a full time futures trader and trading coach. Dr. Dorn is the author of over 300 publications, relating to Trading and Investing Neurouropsychology, Market Mass Neuropsychology, Behavioral Neurofinance, and Holistic Wellness and Longevity.
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