This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
HPT is taking an important step that should benefit him.
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
January 24th, 2008 at 11:30 pm
He admitted he had a problem, that it was emotional, and that it was related to risk. Good. He introduced a crutch that he thinks will help him handle it (smaller size, apparently a common step per Dr. Brett). It’ll be interesting to see how it works.
The fascinating connections between all of these blowups? Disregard for the risks, failure to codify and follow rules, and unrealistic expectations of performance. They’re willing to borrow against the entire value of their homes (with a risky strategy! with some strategies and a good credit score/low rate, a small HELOC might actually make a little sense). They’re willing to swing 10-20 times their account balance overnight. All of them blow off their rules, based on emotional input. They even SAY IT, so it’s not a knowledge problem. All of them think it’s easy money. “I made $40K last year and $10K in a day, I’ll make it back!” Not a one of them thinks in terms like, “hey, if I can make 25% a year slow and steady, I can save money on my job and throw my savings into this thing, and by the time I’m ___, I’ll be swinging enough account to retire and live off of this easy!” Nah, these f*ckers are all about $10K to $2 mil in two years. Unrealistic? Hell yeah. Destined to blow up? Definitely.
It’s an attitudinal problem. It’s an emotional problem.
January 24th, 2008 at 11:34 pm
BTW, of all the different themes I’ve seen on this blog, I like this one the best. Y’all do it custom? Richard?
January 24th, 2008 at 11:43 pm
when you’re swinging for the fences, and disregarding risk, u can’t actually go on your past performance…that’s the same strategy that led to the blowups in the first place…details, details
however, when u break a leg, they do give u crutches for a reason…of course, if u break your arm, they just put it in a cast and send u home…so i’m done with my lame analogies
January 25th, 2008 at 1:08 am
Bill: I started with a theme called Mimetastic, and changed just a few things around.
January 25th, 2008 at 9:31 am
LOL @ “lame” analogies about broken legs (get it?)
Bill, you are so right on. It is an attitude and emotion problem! Size reduction and even rules (that can be broken) probably won’t fix it.
My question, in all seriousness, is how DO you fix this problem? Can it be fixed?
January 25th, 2008 at 11:15 am
@ Richard: check your email.
@ Prospectus: it’s all about fear and drama. Fear of losing “self”-esteem (in ” because it’s usually about how OTHERS perceive us), money, not meeting our ambitions, or losing relationships - these four fears usually trigger bad behavior. The “drama queen” aspect is about fulfilling some positive emotional need with the activity.
You ever do something really f*cked up because you thought it would make you look like “the man?” Get in a fight because someone dis’ed you? That’s fear of losing “self”-esteem.
You ever start a fight with a girlfriend or do something else stupid and destructive to the relationship, because in your heart of hearts you wanted to end the relationship but didn’t want the conversation; so arranging a “drama” could let you have an excuse to leave?
Now … how might someone act this out in trading????
The “not meeting ambitions” could arguably be related to a loss of “self”-esteem, but it’s a little different, in that these bozos all have unrealistic expectations about what they can do in the markets. When something goes against them, they don’t want to admit the f*ckup because that would conflict with their expectations of greatness, so they rationalize it into something that allows them to stay in the trade. Same thing with minimizing their losses, i.e., “I’ll make it back.”
There’s also the “drama” of f*cking up in order to get reassurance that you’re liked/loved/accepted, which you see in all the “there, there” messages that these guys get in their comments.
I think the first step is admitting the “why” of it. In Seykota-speak, they need to internalize the message that their results (and actions) are the best evidence of their intentions. If they intend to find an edge, design rules around it, stick to the rules, apply the edge repeatedly, etc., then they need to ACT their way into a new way of thinking, through repetition. When the feelings come up, admit to themselves “hey that’s my ego talking. I’m not godd*m Soros here, let me drop this dollar/pound trade now” instead of rationalizing reasons for staying in it. It’s a lot easier to do when you know why you were f*cking up in the first place.
I think they also need to find whatever emotional satisfaction they were looking for in trading, in some other place. That’s why I suggested, among other things, skydiving, hang gliding, and shooting slingshots at lions in the zoo at night. That oughtta give ‘em some drama!
January 25th, 2008 at 5:07 pm
bill: i don’t know if it applies, but i have a friend who is works with abused women…from what she tells me, there are women who stay in an abusive relationship, and are addicted (for lack of a better word) to the honeymoon phase…supposedly, after a man does that, he’s generally extremely nice and loving for weeks after…from what she says, some women enjoy that so much they put up with the rest
after reading a few of your comments, i thought of this…i have to wonder if they truly are getting exactly what they want through the outpouring of support after their public blowups…especially, since a couple of them have had more than one