- 1999: Volume 8, No. 3 Making Choices Your Own

When a trader has difficult or unacceptable choices thrust upon him, he can react in a number of predictable and destructive ways. Resistance to making a decision is the most common reaction, followed by avoidance and refusal to accept responsibility for the choice. Any one of these reactions can deal a blow to your trading.

Between a Rock and a Hard Place

Jeff was an angry and bitter man. When his business partner, Mel, suddenly disappeared, Jeff discovered that he had left the partnership with crushing debt and obligations. While Jeff was busy trading their clients' accounts, Mel was responsible for company promotion and sales, as well as managing the firm's business accounts. Although Jeff believed that Mel was abusing the company's money by purchasing the most expensive office furniture and equipment, he ignored the situation because he was so busy trading their investors' money. Furthermore, he loved Mel's choices in décor and justified the extravagance as a means of presenting the best company image possible. But, the bottom line was that Jeff wanted to believe he could trust his partner.

What Jeff did not realize was that Mel's spending and abuse of company funds went far beyond office furniture and equipment. Jeff discovered much too late that Mel spent large amounts of money entertaining potential customers that did not exist, and reimbursed himself petty cash expenses on lavish items that filled his home. The final outrage, however, was the quiet siphoning of the firm's money into foreign bank accounts.

The enormous debts that Mel left in his wake forced Jeff to make a choice between two terrible alternatives. Jeff could declare bankruptcy, avoid paying the debt, and destroy his credit and credibility or he could accept responsibility, pay the deficit, and preserve his credit and good name. However, this second alternative would mean that he and his family would spend the next five years living at a subsistence level with no guarantee that Jeff would be able to salvage the business when everything was finally completed.

Jeff chose to pay the debts, but he hated everything about his life from that moment on. Because he felt pushed into the decision, he resisted the changes that he was forced to make. The new and smaller home his family relocated to was a source of constant irritation and disappointment. His new and less expensive office was "inconvenient and depressing." The fact that he was required to do all of the business' paperwork himself created additional frustration. Suddenly, Jeff began suffering periods of depression that were frequently punctuated by outbursts of rage.

In the meantime, Jeff's trading suffered along with his relationships with his investors and his family.

Coulda, Woulda, Shoulda

In hindsight, we can see how a different scenario "coulda" played out better if we "woulda" made better choices in our thinking and actions. Very often, we get caught up in the mental turmoil of knowing that we "shoulda" made those better choices while we are still feeling bitter and resistant about accepting choices that are not our own. In other words, we are not taking responsibility for our decisions. We do not own them. The decisions own us and we are angry about the fact and self-destructive as a result.

Rose Colored First Choice

Let's say that instead of being "forced" into bankruptcy, Jeff chose bankruptcy, thereby relieving himself of the obligation to pay all the company's debts. Since he "chose" this option, he would feel emotionally empowered to deal with the situation in a proactive manner. So, his first step would be to meet with his family to decide how everyone would pitch in and make it a family project to rebuild. The resulting plan would enlist everyone's participation at the level of his or her ability. Each person would come up with ways to enjoy the process of downsizing and making the best of the situation. When people are asked to find the best way to handle a situation, they feel good about their choices because they own them.

At dinner, each family member would report on his or her progress and receive accolades for their progress and innovative ideas. They would reward themselves with family fun that would not necessarily involve spending money. Special times create special feelings. When people gather and share the best of themselves, good feelings result. Settings for special times could be a walk in the park, a picnic by the lake, playing games, a celebration of life on a non-holiday, etc.

A Different Point of View

In the movie Life is Good, Roberto Benigni, a famous Italian movie star, played a father who created a unique fantasy for his son in order to handle the horrors of life in a Nazi concentration camp. He told his son that whatever happened was part of a big game in which you received points and the winner would get a Grand Prize. This game spared his son the experience of the horrors around them. Eventually, his son realized the truth, but what his father had done for him was the greatest prize of all-the knowledge, at the core of his being that his father loved him.

The message in this movie is the fact that we choose our own reality by the choices we make in our thoughts. Our thoughts create our feelings and these feelings, in turn, direct our actions, all of which determines our reality. Of course, you could create scenarios that command bad feelings and win the debate, but lose the war for your state of mind. The fact remains that we choose to think our thoughts and feel our feelings, regardless of whether or not we want to take responsibility for them and own our choices.

Second Rosy Choice

Suppose that instead of filing bankruptcy, Jeff chose the second option of paying off the debts. However, this time he took responsibility for making the decision instead of resisting his choice and viewing it as a burden to overcome. Since Jeff was making this his choice, he would set up a family meeting to develop a family plan. In addition to the family plan, Jeff would put together a business plan that would not only pay off all of his bills, but would make a profit for both himself and his clients. He would meet with his creditors and present his business plan to show them how he planned to make his business work and pay them back. Most creditors would support his efforts and appreciate his honesty and his workable plan to pay them back. Jeff could ask his friends to help him in establishing a good credit reference to set up a new office.

Since the right working environment supports success, Jeff would be better served by surrounding himself with friendly people and successful businesses. This is available in the form of a one-room office space with a common reception area and back-up staff to assist him part-time.

Jeff would also need to meet his investors and tell them that he was moving to a new office. Due to his partner's decision to enter a new line of work, he would not require as large a space. He should make it clear that while he is moving, he will not trade since one of his rules is that he will not trade during a stressful time. Clear focus is important to decision making and he should emphasize that he is dedicated to only giving the best of himself when investing their money.

Now, Jeff has created a workable plan with the support of the people involved in these difficult circumstances. If he does not succeed, at least everyone will know that he gave it his best effort.

By taking responsibility for his choices, Jeff could have taken control of the situation and himself. Instead, by resisting and failing to take responsibility, he actually put himself under pressure, risked losing the good will of those around him and created a negative state of mind that impaired his trading.

Point of Focus

I recently saw an old movie where a young, married couple moved into an attic apartment. They had no money and could afford nothing better. The young wife promptly began to decorate their space using whatever resources she could find. Using orange crates, cement blocks, discarded items, and hand-me-downs, she turned that little attic into a charming, lovely little place that was eminently livable. She chose to enjoy the process of transforming their humble apartment into a love nest. Her young husband, on the other hand, was unhappy with their situation because he was embarrassed because he could not give her a better lifestyle. One day, in the midst of a rampage about how little they had, she held a dollar bill up to his eyes. "What do you see?" she asked. "Money," he replied. Then, she had him hold the dollar as far from his eyes as possible. "What do you see now?" she asked him. "Everything," he replied. "That's right," she said. "When you look at this room, all you see is money, and when I look at it, I see everything."

This principle applies to traders as well: If you focus on the limitations of your choices, you will see only problems. If you focus on ways to make the best of your limited choices, you will have everything.

Instant Zillionaire

When Ron decided to become a trader, he attended a conference where he could meet all the gurus of the trading industry. "Wow!" he thought, "These guys are just handing me the answers on a silver platter." Now, all Ron had to do was to choose one of the gurus, buy the recommended software and equipment, subscribe to a few newsletters and just let the experts make the trading decisions for him. Ron was sure that he was well on his way to becoming an instant zillionaire. It is instructive here that Ron would choose to listen only to the people who were telling him where to place the trades and not to the people at the conference who were saying you have to make your own choices. By the way, Ron did not become a zillionaire. He did, however, become a computer salesman. Like other naïve new traders, Ron thought that he would not have to take responsibility for making his own choices.

Choosing Your Own Reality

How to choose:

• Carefully weigh all of your options, regardless of whether it seems like you are forced to make a choice or if you are facing many possible paths.
• Write down every choice that is available to you including those that you would not consider.
• Ask family members, business associates, and others who have made similar choices what options they feel you have. It is important to write down all suggestions without prejudging them.
• Play each suggestion out on paper, in your mind, and with others. Look at each choice, first, as a devil's advocate, and then through rose-colored glasses.
• Make a choice, compose a winning plan based on that choice, and then elicit everyone's cooperation and help.
• Follow the plan, making adjustments along the way to improve on the plan.

Conclusion

Traders are often faced with choices that they do not like or want to make. If they resist the choices, they will cut themselves off from their own creativity and problem-solving abilities. In addition, they risk alienating the very people whose help they need to bring about a successful outcome. And, of course, their trading suffers. By owning their choices, traders can positively influence the direction of the outcome. Choices they originally did not want to make can become choices that lead to a way out of trouble, that rebuild self-esteem and important relationships, and ultimately, create profits.