What happens to a trader when he gives the best of himself to becoming a successful trader and it just does not happen?

Recently, I counseled a trader named Harold, whose trading was flat. Eventually, I came to the conclusion that he was not giving his trading the level of commitment it needed in order for him to be successful. It was clear that something was holding him back from making that commitment and whatever the underlying issue was, we needed to root it out and deal with it.

In the course of our session, Harold began to talk about the fact that he had worked tirelessly in high school to get himself accepted into a top school. Since he was a young boy, his dream had been to attend a certain school that his deceased father had attended.  All of his intense efforts had resulted in top grades and board scores with a long list of extra-curricular activities, honors, awards, charitable activities and outstanding recommendations from his teachers. He and another boy in his high school applied to the same school. For political reasons, the other boy was accepted, while Harold was not.

Afterward, the conclusion that Harold came to was that hard work and commitment resulted in pain and failure. Life was not fair and it did not matter that you gave it your all.  Many years later, unconsciously, Harold was applying that same conclusion to his trading. He feared that a full commitment would actually result in pain, rather than success, so he held back from giving his trading his all.

How many other traders out there are struggling with the same fear? Unfortunately, there are many. The reason is that life is not fair and that hard work and commitment are not always rewarded. This painful lesson is often bestowed upon the most promising young men and women who have dreams and who work tirelessly to achieve them, only to see their efforts result in failure.

Things the Way They should be

As children, we are told that things should be a certain way. People should be good and they should be honest.  Merit and hard work should be compensated. The good should be rewarded while the bad should be punished. We should wait patiently in line and not jump ahead of others. We should not take what is not ours. We should follow the rules and the law. This is the education that most of us get and it grounds us in the fundamentals of ethics and values. However, this kind of education does nothing to prepare young people for the way the world actually is.

Unfortunately, many young people come into the world expecting it to be the way it should be and are disappointed with the reality and become cynical.  For this reason, the flip side of naiveté is cynicism, not maturity. Naiveté and cynicism are mirror opposites. When the naïve are confronted with the pain of reality, they take refuge in cynicism. But, cynicism does not represent a form of personal growth. What our trader, Harold, had done was take refuge in cynicism. For him, there was no point in trying. Failure was inevitable. Hard work would simply be rewarded with failure and pain.

Coming to Terms with Reality

The fact that hard work and total commitment do not always get rewarded: that the prize can be stolen or given to the less worthy is one of the most painful lessons in reality.

At the time the dream is lost, no one wants to hear that there is a silver lining to this experience – but there is. If you are able to learn the lesson of dealing with the fact that life is not fair, you will have reached one of the highest rungs on the ladder to full adulthood. This is a particularly good place for a trader to be. If a trader can come to terms with the unfairness of reality and accept this fact, he will be completely prepared for the vagaries of the market. If there were ever an arena in which one could see the unfairness of reality in operation, it would be the market:

• The hardest working and most prepared trader can lose concentration and lose it all while a novice trader can have the luckiest day on the street.

• A trading system that has been tested and retested for years to work perfectly in the current market can become obsolete in a day.

• A novice trader who has saved for years to become a full-time trader can give all his savings to an unscrupulous “guru” who can lose all his money in less time than you can say “there is no magic bullet.”

• Since trading is a zero-sum game, when one trader has a brilliant day that changes his life for the better and makes all his dreams come true, it is likely that he did so harvesting the dreams of another trader.

• Markets can change on a dime, or languish in ‘Flatland,’ or become so volatile that everyone gets whipsawed, and it does not care. 

What all of this means is that a trader must be prepared to deal with the unfairness of life on the most basic, emotional and psychological level. He must be willing to accept and expect the unpredictable as part of an everyday experience.  The maturity and wisdom that a trader derives from this life lesson will serve him well. He will not be overwhelmed by unexpected loss and turnarounds or the unfairness of loss and gain in the markets.  He will expect and accept it all. He will remain calm and self-assured in the face of the storm.

It is not Personal

Part of the process of dealing with accepting reality the way it is rather than the way it should be is coming to terms with the fact that reality is not personal.  For example, Harold’s experience felt very personal to him. For that reason, he had an even harder time dealing with his failure to achieve his dream. Unfortunately, most people are like Harold and they see their lack of reward for giving their best effort as a personal experience – as though the universe had placed their hearts in the middle of the target.

How do you convince someone that he or she is NOT the target, especially when it feels that way? Many years ago, Laura Huxley wrote a wonderful book entitled, You Are Not the Target, in which she contends that you can only achieve peace and happiness in life when you begin to realize this concept. In her book, she helps the reader to see that even when someone is actively pounding on you, you are never the target. 

Whatever an individual is doing, it is always about what is happening inside that person. You may represent something to that person, but you are merely a symbol and not the actual thing. He may be angry, frustrated, wanting, and distressed.  You are in the path of all those feelings. The same analogy can be applied to any aspect of reality. How could this happen to me?  Well, it was not personal. You were in the path of forces set in motion before you entered the picture.

For a trader who has been leveled by an individual in the past or by the markets in the present, the important thing is to come to a different conclusion. What if your conclusion was that the individual who leveled you was acting out his own drama, and you were just a walk-in for his real target? That real target might have been a parent, a sibling or an important figure in his past or present world. You could also conclude in a situation where the markets crushed you that you were in the way of a random force.

Some helpful strategies

What can prevent you from surrendering in the aftermath of having given it your best and then failing?  Here are some strategies to keep in mind.

1. Change your self-talk

One of the most powerful forces in your life is your own self-talk.  Most people do not listen to their own self-talk on a conscious level, but they certainly do on the unconscious level.  If you listen to your own self-talk as it concerns the experience of having given it your all and then losing, you will hear what messages you are sending to your unconscious mind.

You get the picture…Notice that all of these statements have universalized the negative experience. Universalizing is simply extrapolating the specific to the general. This habit of universalizing is one of the signs of a pessimistic thinker and has been demonstrated to lead to depression.

Positive self-talk after one of these experiences is exceptionally good medicine to inoculate your spirit against defeatism, cynicism and universalizing.

2. Focus on your successes, your good fortune and all your blessings.  Write them down. Re-experience each one, building up good visual memories and positive emotions. This practice has been shown to elevate mood and to refocus your attention away from negative imagery.

3. Are there positive lessons you can learn from this experience? Identify any areas of weakness or vulnerability in your previous effort. A caveat – do this exercise without judgment and without self-condemnation. This is not a critique but a way to improve your chances of success the next time.
 
4. Create a plan of action for the next attempt. Enlist outside support and resources. The universe tends to support the more powerful in each competition, without any regard for the moral superiority or worthiness of the weaker opponent.

5. Talk out the losing experience with a trained professional who is capable of helping you to put the experience in perspective and of motivating you back into the saddle. A trader I know was thrown by his family’s horse as a child.  Afterward, he never got back into the saddle because he universalized the experience: “all horses are dangerous and I will always get hurt if I get on a horse.” Had he been able to talk this out with someone who could question his assertions, he would have been able to see that he was free to try again – even on the same horse!

When you give any project your best try and you fail to achieve your goal, you have many choices in how to interpret the experience.  First, it is important to deal with the fact that life is not necessarily fair and that bad things can happen despite the hardest work and the best of intentions. Once you have done that, you can get back in the saddle and try again if you let go of your universalizing. Learn from your experience, make a plan of action and work out your feelings with someone trained to help you.