- 2001: Volume 10, No. 3 Mind Over Money: Choosing Optimism and Opportunity

Are the markets putting you in a negative state of mind? If so, you’re certainly not alone. You were just beginning to feel a sense of stability and comfort in a bull market using a methodology that was creating a profitable income when the markets decided to weed the traders who were playing the pyramid game from the real traders. What I find most amazing is the fact that many traders realized that the markets were overbought, but still failed to prepare for an oncoming bear market. The traders who did prepare for the current conditions in the markets are cheerily calling me with what I call the "Optimistic and Opportunity State of Mind." As one of my clients recently said, "I know a lot of people are losing money, but we are still doing great."

Refusing to Participate
Recently, I read a book where the author was describing an experience that taught him a powerful message. At a gathering of real estate brokers during a recession, the author overheard many brokers discussing not having enough to survive and not knowing whether they could stay in the business. One individual in the group appeared to be happy and full of positive energy. The author said to this smiling man, "You are obviously not a real estate broker." "Yes I am," was the man’s enthusiastic reply and he went on to say that business was great. After some conversation about the hard times in the real estate market, the enthusiastic real estate broker declared, "I refuse to participate in this recession!"

The fact remains that there are people who still make money in the markets despite its present steep decline. If you are not one of them, you are probably sharing your own doom and gloom stories and getting a lot of agreement from others. Or you could be one of the few traders who is saying, "I refuse to participate in this bear market!"

The Double "O" Dilemma
It is easy to wake up in a positive state of mind when everything is going your way. The economy is good, you are making money and the world is your oyster. You can certainly feel justified in feeling bad when your old success strategies stop working and you can find a lot of agreement from people in similar situations. However, when your attention is focused on negativity, poverty consciousness, and being right about a difficult market, how will you be able to recognize opportunity when it comes your way?

Preventing a Larger Problem
Ronnie called me about two years ago. He was living a good life while making huge amounts of money. At that time, a recent tragedy had him concerned that he might reach a point where he would not be able to continue to support his family, his employees, and all the service people supporting his lifestyle. Ronnie knew that he was benefiting from the bull market because his trading method was dependent upon an invigorated up market. Ronnie’s new fear of loss was affecting his normal positive state of mind and he was suddenly creating losses before the bull market had run its full course. Usually, fear is a trader’s curse, but in Ronnie’s case it created a temporary setback that prevented a much larger problem.

Born an optimist, Ronnie told me that he saw opportunity all around him. Or at least that is how he remembered it. Because of his natural optimism, he had no contingencies in place for difficult times because he thought that any necessary adjustments would come easily to him.

One day, Ronnie received a call from his best friend’s wife. Hysterically, she related that her husband had been in a serious car accident and that if he survived, it was unlikely that he would walk again. Ronnie watched as his friend disintegrated from being a top producing sales person and a happy-go-lucky family man into an angry, dependant invalid. This incident caused a new reality to set in for Ronnie. He began to feel vulnerable and started questioning his own ability to maintain his top performance lifestyle. Instead of staying in his normal "Optimistic and Opportunity State of Mind," he suddenly slipped into a "What if Everything Goes Wrong State of Mind." That is when he first called me.

The root cause of a trader’s problem is rarely the obvious one. While his friend’s tragedy was the catalyst that brought out Ronnie’s fear, the root cause was buried deeply in his childhood.

When Ronnie was a child, he dreamed of having a dog. Ronnie realized his dream when Spot entered his life. One day, he found Spot dead. Ronnie’s dog had been poisoned and young Ronnie was devastated. Although it could not be proved, Ronnie’s family was certain that a neighbor who did not like children or dogs had poisoned Spot. The pain from losing his beloved Spot was great, but Ronnie was not going to allow his neighbor the satisfaction of seeing his anger and pain. So, Ronnie decided to bury his feelings and act as if the loss did not affect him. Still, Ronnie wanted to get even with this man. His father said, "You get even with people like this man by becoming very successful." His dad continued to say, "People like our neighbor won’t be able to touch you if you are talented and rich." Ronnie’s pain was so great that he was willing to try anything to stop it. Since he did not know of any other ways to stop his pain, he took his dad’s advice. It worked. By focusing on becoming a high achiever, he kept his focus off of his grief. Many years later, his friend’s accident brought into sharp focus the fact that all the money in the world could not protect him from being the target of tragedy.

Root Causes Waiting to Pounce
What I have discovered in coaching traders for the past 12 years is that even the healthiest and most successful minds can have potential sabotaging issues from childhood buried deeply within them. These old, unresolved issues are waiting for the opportunity to resurface and will do so in what appears to be unrelated situations and in the form of new issues. They then become the focal point of what needs to be healed. However, unless the core issue is addressed and transformed, the sabotaging issue will continue to reappear in new forms.

Feeding the Fear
What does fear look like? I am certain that you have dramatic and convincing stories of fear. Some are justified and real, but the sabotaging fears that I am referring to are those fears that look like the "monsters" of your childhood. You were convinced then and you are convinced now that those shadows of truth are something to be worried about. "But," you say, "the fact is I am losing money hand over fist, and will not be able to continue this much longer before I start to lose all that I have accumulated." You are right. If you continue in your current thinking and behavior patterns, you will definitely lose everything. Of course, it is not guaranteed that the most positive state of mind will overcome all of your problems. But, it is more likely to help than a negative state of mind. When you take the time to analyze your fear, you will realize that by feeding that fear with detailed justifications, you add to the problem and keep yourself from being in the right state of mind to come up with a solution.

You Attract What You Think About
The mind is a magnet that will attract you to what you think about. Many books have been written on this very subject. A couple of classics that come to mind are Think and Grow Rich, by Napoleon Hill and The Magic of Believing, by Claude Bristol. When you think about your fear, it will grow and when you bury your fear, it will find its way back to the surface. The only way to eliminate fear is to face it, allow it to express itself with appropriate emotion, transform it into something positive, and then do the things that a successful person does: follow or create a new successful model. The model that had to be re-established in Ronnie was the model that he grew up with: the Opportunity and Optimistic State of Mind. But, first, we had to transform his fears.

Climbing the Ladder of Success To climb the proverbial ladder of success, the transitions between steps to reach the top step require the taking of risks. These risks might be the risk of major discomfort, uncertainty, and/or possible failure. People fail to reach the top step because they would rather not have to endure the transitions between steps. The first time Ronnie reached the top step, he was wearing blinders to the obstacles that were scattered along the way. His focus was on the success at the top. But when he had to make the climb again, he did not know how to deal with the transitions because he felt and saw the obstacles. He was more than happy to have me hold the ladder and guide his course.

While I cannot personally hold the ladders for all of you, I can give you some basic advice to help you keep the ladder steady for yourself.

Using a Negative Strategy to Create an Opportunity and Optimistic State of Mind
Since you have become so good at a strategy for creating pessimism, let’s use this same model in reverse to create an Opportunity and Optimistic State of Mind.

The Pessimistic Model

You make statements to yourself like this:

• The markets are terrible.
• There are no opportunities to make money.
• I’m going to keep losing money.
• I will not be able to maintain my lifestyle.

These statements create pictures that look like this:

• Lines and numbers that look threatening.
• You see your family losing their home, with the furniture being carried to a small apartment.
• You see your children crying because they have to leave their friends.

You start feeling like this:

• A knot in the pit of your stomach
• A tight chest
• Shaking hands.

Opportunity and Optimistic Model

You make statements like this:

• If I was capable of coming up with a strategy for making money before, I am capable of coming up with one that will make money in these markets.
• If others can do it, so can I.
• If our family goes through a temporary financial setback, our love and support for one another will hold together the things that we cherish most.

These statements create pictures like this:

• You are redesigning your method for trading.
• You get up in the morning with a bounce because you have the same passion that you had when you first started the business.
• You have a family meeting and they give you the support that you need to take you through the transition period.

You start feeling this:

• Excited,
• Fulfilled,
• Loved,
• Optimistic,
• Ready for opportunity.

Coaching All Around
Yes, you will have temporary setbacks. A setback could come in the form of bad market news or from family and friends or associates who are pulling you back in the direction of your old, negative strategy. When this happens, it is important for you to be your own coach. Remind yourself that "negativity thinking" is debilitating and only adds to the problem. Surround yourself with positive people who will help you on your constructive and positive course of action. If you need additional help, hire a professional coach who understands trading.

Ronnie Duplicating Optimism and Opportunity
The other day Ronnie called to tell me about the amazing results that changing his thinking brought into his life. He made the change as a child and again as an adult. His new plan works in a bear market and he feels that he can handle any fluctuations that the market might bring. Ronnie has also become a coach to his best friend who was injured in the car accident. With Ronnie’s help, his friend has regained his confidence and enthusiasm for life by realizing that even though he is in a wheel chair, he can still be an exceptional provider, good family man and great friend. He decided to become optimistic about walking again despite what the doctors say.

Conclusion
Being in an "Opportunity and Optimistic State of Mind" is a choice. In order to maintain a positive state when life seems at its most challenging, you must coach yourself on a daily and, sometimes, an hourly basis. Choose a mindset filled with good thoughts and actions. Find a mentor or coach who continues to challenge you to stay on that ladder, dealing with the issues and obstacles that appear along the way.