- 1997: Volume 6, No. 1 Options for Traders

Life is a smorgasbord for traders: there are so many tempting options from which to choose that the process can be exciting and rewarding or confusing and disappointing. Unfortunately, it can also be filled with hidden dangers. So, I've decided to provide you with the risk/reward content of your trader options. Then, you can make more educated choices that will fill your needs, not only for the moment, but for your entire career.

What are the life options from which a trader must choose? Once you have made your general and logistic decisions, such as:

• What criteria to use for making decisions about trading.
• Whether to trade for yourself or work for someone else.
• Whether to trade from a home office or outside the home.
• Whether to day trade or position trade.
• Whether to be a mechanical or intuitive trader.
• Whether to trade on or off the floor.

Then come the life options which will support or take away from your performance. The options to which I am referring are the ones that have to do with your personal decisions, actions, thoughts, feelings and beliefs. The choices you make from these options determine what your life will be like, how you will conduct yourself and how you will feel about life:

• Whether to have rules or not for your trading and your daily conduct.
• Whether to follow your rules or not.
• Whether to work relentless, long hours or to live on a schedule that allows for breaks, vacations, rest, time with family, etc.
• Whether to indulge in addictive gratification such as smoking, drinking, gambling, taking drugs, loading up on caffeine or to forego the pleasurable rush, the instant energy boost, the temporary relief from stress or pain or sadness offered by these addictions for long-term health benefits.
• Whether to jump into trading unprepared or take the hard road of study, preparation, and testing.
• Whether to ignore all negative feelings and emotional problems or to face them, work on them, seek help in resolving them.
• Whether to abuse your body with bad food, inactivity and stress or take the time and effort required to feed yourself properly, get adequate exercise, and practice stress-reducing activities such as meditation.
• Whether to break your agreements with yourself and others when they become difficult or inconvenient to keep or whether to do whatever it takes to keep those agreements.
• Whether to ignore, neglect, or otherwise fail to nurture the relationships in your life or to commit the time and energy required to nurture the relationships in your life.
• Whether to ignore, neglect or otherwise fail to sustain the spiritual needs in your life or to make the commitment to keep that flame alive in your life.

Paying the Piper

If you look at these options carefully, you will see that they all come with positive or negative consequences. Most, if not all of them, also require you to choose between immediate gratification (with long-term sacrifice) or immediate sacrifice (for long-term advantage.)

These choices are the hardest ones that we ever have to make because we must pay the piper now or later - a little now or a lot later on. Unfortunately, many of us are extremely good at deluding ourselves into believing that we will never have to pay up. This inevitable reckoning is the risk/reward factor for each option a trader faces when he decides how he will handle these options. The problem is that we are often unaware that we are making these choices, even though we are making them, literally, all day long. If we could be more conscious of the fact that we were making choices, perhaps we would choose differently.

Bundling Options

Once a trader has made his selection from this first list of behavioral/psychological options, he then finds himself linked to a new set of options or "option packages" which bundle together many of the day-to-day life decisions made by the trader. The results of these options have a far greater impact than any single choice he may have made because they reflect a trader's general approach to life.

Option Package Number One: Abuse now, pay later.

I don't know how many times I've gotten calls from traders who say to me, "Adrienne, why are you asking me to behave like a boy scout and do all of these good things for myself when Jack does everything wrong and he's getting great results?" Jack is always a trader they know who smokes, drinks hard alcohol and consumes tons of coffee, diet cokes, and fast food. He never exercises, rests, relaxes or spends time with his family. In fact, Jack is a miracle of self-abuse. The problem is, unfortunately, what these "Jacks" are indeed doing is all wrong, yet they are still making lots of money!

What my frustrated traders cannot see is the picture of Jack over time: abusing now, paying later. While some traders have the ability to seriously abuse their bodies over a period of time with seemingly no ill effects, others find themselves seriously harmed by far lower levels of abuse of the same socially accepted vices. Take Ted, for example, who led a pretty straight life except for the relatively innocent vice of drinking four cups of coffee a day. It is true that caffeine is a powerful adrenal stimulant, but many people seem to function well after consuming it in quantity all day long. And with all the advertising of coffee as a refreshing stress reliever, it is hard to believe that something so innocent can affect you in a very negative way. Yet, each individual's body has its own unique sensitivities. In Ted's case, four cups of coffee had the effect of damaging his focus, memory and performance outcome. When it became obvious that something was creating a problem in his performance, Ted was surprised and dismayed to realize the source of his difficulty. Once he had given up coffee and had gotten his body back on track, his performance level rapidly returned to normal. So, while there are some people who can indulge themselves in many addictions over a period and not be affected, there are others who can be negatively affected by something as benign as a combination of the wrong foods.

So, which kind of trader are you? Are you the one who can abuse yourself and get away with it or not? In the Middle Ages, when the Bubonic Plague swept across Europe, one out of every three humans perished in its wake. Not only is the fact astonishing that a third of the population of a continent was wiped out, but the other astonishing fact is that anyone survived. Obviously, the immune systems of the survivors were strong enough to resist the exposure. This is the human condition: some of us are strong enough to resist the exposure and some of us are not. The problem is that we do not know which category we fit into until it's too late. Hence, the policy of avoiding exposure has developed as a respectable survival strategy.

Let's say that you are one of those people who can take many of these negative elements into your body and still manage to get good performance. The question to ask yourself is: how long do I have before I reach the point of no return? If you think that you can go on forever in your present mode of operation, think about all of those times that you have been to a funeral for someone whose friends kept saying, "I can't believe it! He was a guy who loved life. I thought he would go on forever." Then, suddenly, he keeled over from a stroke, a heart attack or a fatal disease.

As a trader, you have many options from which to choose regarding how you are going to treat your mind and body. Trading is performance; and when you realize that very few people get a positive result on a consistent basis over a long period of time, you might start to make better choices if you want to be one of those traders.

Option Package Number Two: Up or Down-the Seesaw Trader

In addition to deciding if you want to pay now or later, you can also choose whether you want to be on the seesaw or not. If you choose the seesaw, however, you must then choose whether you are going to be up or down, remembering that the seesaw always keeps moving. The only way to stay off the seesaw is to maintain a consistent performance through consistent, positive physical and mental habits. But, if you do choose not to take the hard road of self-discipline, you will certainly find yourself on the seesaw. Like Al.

Al, an exceptional trader, rides the emotional and physical seesaw. He cannot maintain his brilliant results consistently because he drinks too much, smokes too much, carouses late into the night and finds all manner of ways to abuse himself. Then, his wife puts him on the wagon for his sake, and for the sake of his children and their marriage. Every few years, I check in with Al. Some years he is living in a mansion on the North Shore and, some years, he is crowded into a small apartment, licking his wounds and drying up. After each new round, however, Al's ability to rebound seems less and less spectacular. The extremes of his ups and downs take more out of his family and health, as well. And frankly, I think he enjoys the drama of the ride less and less each time.

If, like Al, you have opted for that same breathtaking ride up and down, perhaps you are getting as frayed around the edges as Al is. Perhaps you are also like Al in that you resist the notion that you have to give up the self-destructive binges in order to bring happiness to your life. In Al's case, a deeply dysfunctional childhood is the cause of his antipathy to stability. What is the cause of your own?

Option Package Number Three: Samson-with or without the ponytail

Samson was not obsessed with his strength (at least he wasn't in the movie version). Like most of us, he took his gifts for granted. However, once he lost his strength, he was well aware of its absence. For many traders, the issue of strength is translated into a real need for a substantial and continuous supply of energy. As long as a trader has access to his supply of energy, he is unaware of its value to him. But, as soon as his source begins to dry up, he suddenly becomes obsessed with getting it back. The problem with your energy supply is that by the time it starts to dry up, the underlying cause may be so serious that there is no way back or the road back may be as long as the original trip. The best option to take is the one that nurtures, respects and conserves energy all along the way.

Recently, I presented my advanced Intuition Seminar for professional traders who are actually making money. I knew that I would receive the same old hemming and hawing from the group when I began my presentation about the foods that are negative for most people's bodies. This year, I decided to do something different, however, by giving a demonstration of applied kineseology. This technique, which has been studied extensively for several decades, is used increasingly in medical circles to test for the body's response to various foods, vitamins, minerals and other substances. Studies have shown that within 30 seconds of putting salt on your tongue, your kidneys have already dropped the rate of urine production by 50% in anticipation of the salt eventually appearing in the bloodstream. Other substances placed on the tongue will immediately result in the brain signaling the body to anticipate their arrival. The body, in turn, reacts as if the substance has already arrived. If the substance is needed, the body will become stronger in seconds. If the substance spells trouble, the body will instantly react by becoming weaker. This relative strength can be demonstrated by using the muscles of the arms and legs to show the different responses of the body. The person who has this minute portion of a substance placed on his tongue is unaware of what the substance is, so that he has no idea of how his body will react.

In my demonstration, one of the traders sat down with his arm in an elevated side position, with his forearm in a bent-forward position. I then applied downward pressure on his forearm while instructing him to resist the pressure at the same time. This first demonstration established a baseline for his natural level of strength at that time. Next, I applied minute samples of different foods onto his tongue, which included sugar, coffee, spirulina, blue-green algae, and B-complex vitamins. In addition, we blew cigarette smoke in his face to see what effect this substance would have on his strength. The result was that the sugar, coffee and smoke all demonstrably weakened his muscle strength so that it was easy for me to push his arm down with one of my hands, while the remaining substances strengthened his arm so that I was not able to push it down.

A wide range of muscle tests reflect the effect of different substances on various glands of the body. This particular test reflects the effects of substances on the adrenal glands. The strength of your adrenal glands is particularly important because traders rely on their adrenal glands to keep them going at peak performance all day long. After the test of the different elements on the tongue, we also tested the results of negative and positive thinking and how they affect the adrenals. And as you might have suspected, positive thinking brought a strong forearm and the negative thinking brought a weak forearm. So, even if you are a person who can tolerate high substance abuse, just think of how much stronger you would be and how much more focus you would have if you made better choices.

Option Package Number Four: A party of one or two?

Everyone knows how much fun it is to go to a fine restaurant and eat at a small table set for one. We all try to avoid this experience, but sometimes we have made so many poor choices that we run out of options. The experience of feeling alone when you are surrounded by people is the same life condition. Unfortunately, traders who make the wrong choices over time eventually alienate their families, friends and associates. The problem is that traders need emotional supports to sustain successful trading over time.

Recently, I completed the consultation on a trader's 15-page evaluation. Mike had been a strong floor trader for 15 years, but was having trouble maintaining focus. On the evaluation, two areas of concern were Mike's personal and emotional life. Mike had been divorced for several years. Since that time, he had had limited contact with his children and even more limited contact with his old friends. In fact, Mike's circle of relationships was collapsing on itself. Once a socially-outgoing individual, Mike was rapidly becoming socially isolated. This decline in social and emotional outlets was running parallel to a decline in Mike's performance on the floor. Mike's commentary on his situation was, "I don't need anyone."

Conclusion: Options and Choices

Every day, traders make choices about the kind of life they lead. These choices relate directly to a trader's emotional and physical well-being, but the ripple-effect eventually determines their trading performance. And contrary to the evidence of all of the successful, self-destructive traders named Jack who are doing it all wrong and still winning, there are no real short-term advantages in this game of options and choices when you weigh those advantages against their long-term costs.