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As a kid, I’d get on any ride. No roller coaster intimidated me, I was game for anything. But then something happened, and I’m not sure what it was. Some kind of mental obstacle just appeared, and I’m not sure why. All I know is that in recent years, I backed away from the big rides. I got on some of them, but I didn’t like them! Why?

It wasn’t the speed, it was about control. Going fast doesn’t spook me, I’ve driven 150mph too many times. But in those cases, I’ve been the one choosing the speed, having control.

On a flight last fall, however, I was reminded just how little is within my control. It was at night leaving Philly in a nasty thunderstorm – the kind which paints the radar red. Why we took off, I have no idea, but it certainly got my attention. That plane got tossed all over the sky, and at one point I’d swear we dropped 2,000 feet in a couple of seconds. I was honestly terrified, but the Lord got me through it!

Following that gut check, I went to Disney World with my family. After the thunderstorm flight, no roller coaster held sway over me. I pushed the pictured 458 Italia to its limits around the track, but more importantly I rode every coaster and thrill ride in every park, without fear, because my perspective had shifted. Just like as a kid, I knew I wouldn’t die! That sounds ridiculous, but my fear was removed and I was released to have fun again. I had overcome my worry through reason and as a by-product of some circumstances (US Scareways).

So what does this all have to do with trading?

In trading, we have the ongoing opportunity to push ourselves, to confront fears, and to reason our way beyond obstacles which have simply appeared. But it’s not as if we can just push through and ignore it. Fear is our mind’s way of warning us of danger, right? So it isn’t wise to just ignore it, nor is it easy.  I hear from traders almost every day who are too afraid to trade.  They’re handcuffed and simply cannot pull the trigger no matter how pretty a setup happens to be.  It’s overwhelming to them to just enter a position.

Getting beyond those mental hurdles takes a shift in perspective. It takes reasoning, and it takes some adjustments. Whereas that extremely turbulent flight happened by chance, in trading we have to create some of those new circumstances in order to train our minds to think differently again.  That takes intentional effort, not sitting back and hoping things will suddenly feel different.

Maybe it means temporarily eliminating certain types of plays which have harmed you in the past. Or maybe it means you still step out in the way of some (assessed) risk, but you do so with extremely small positions. You know they can’t destroy you, and the aim is to get back in the saddle – not to immediately make money. That can happen later.

If you find yourself shell-shocked in the markets, for whatever reason, start creating a different reality, somehow. Find a way and be creative if you need to. Take baby steps until your confidence returns. Learn some new techniques, and only size up when you’re emotionally stable again. But you have to find a way to limit your risk and get beyond the worry of ruin. It’s the only way you’ll return to profitability and start having some fun again in the markets.

Trade Like a Bandit!

Jeff White
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