industrial salesman andwas sacked; he entered training as a broker and rose near the top of his firmbut was sued; he became a well-known trader but busted out while disentan-gling himself from previous disasters. He blamed all his failures on enviousbosses, incompetent regulators, and an unsupportive wife.
Finally, he hit bottom. He had no job and no money. He borrowed a quoteterminal from another busted-out trader and raised capital from a few peoplewho had heard that he had traded well in the past. He knew how to trade andmade money for his pool. As the word spread, more people brought inmoney. My friend was on a roll. At that point, he went on a speaking tour ofAsia but continued to trade from the road. He took a side trip into a countryfamous for its prostitutes, leaving a very large open position with no protec-tive stop. By the time he returned to civilization, the markets had staged amajor move and his pool was wiped out. Did he try to figure out his prob-lem? Did he try to change? No—he blamed his broker!26 INDIVIDUAL PSYCHOLOGY
It hurts to look within yourself for the cause of your failure. When tradersget in trouble, they tend to blame others, bad luck, or anything else.
A prominent trader came to me for a consultation. His equity was beingdemolished by a rally in the U.S. dollar, in which he was heavily short. Hehad grown up fighting a nasty and arrogant father. He had made a name forhimself by betting large positions on reversals of established trends. Thistrader kept adding to his short position because he could not admit that themarket, which represented his father, was bigger and stronger than he was.
These are just two examples of how people act out self-destructive ten-dencies. We sabotage ourselves by acting like impulsive children rather thanintelligent adults. We cling to our self-defeating patterns even though theycan be treated — failure is a curable disease.
The mental baggage from childhood can prevent you from succeeding inthe markets. You have to find your weaknesses in order to change. Keep atrading diary — write down your reasons for entering and exiting every trade.Look for repetitive patterns of success and failure.
The Demolition Derby
Almost every profession and business provides a safety net for its members.Your bosses, colleagues, and clients can warn you when you behave danger-ously or self-destructively. There is no such support in trading, which makesit more dangerous than most human endeavors. The markets offer manyopportunities to self-destruct without a safety net.
All members of society make small allowances to protect one anotherfrom the consequences of our mistakes. When you drive, you try to avoidhitting other cars and they try to avoid hitting you. If someone swings openthe door of a parked car, you swerve. If someone cuts in front of you on ahighway, you may curse, but you will slow down. You avoid collisionsbecause they are too costly for both parties.
Markets operate without normal human helpfulness. Every trader tries tohit others. Every trader gets hit by others. The trading highway is litteredwith wrecks. Trading is the most dangerous human endeavor, short of war.
Buying at the high point of the day is like swinging your car door openinto the traffic. When your buy order reaches the floor, traders rush to sell toyou —to rip your door off along with your arm. Other traders want you to failbecause they get the money you lose.8. TRADING PSYCHOLOGY 27Controlling Self-Destructiveness
Most people go through life making the same mistakes at sixty that theymade at twenty. Others structure their lives to succeed in one area while act-ing out internal conflicts in another. Very few people grow out of their prob-lems.
You need to be aware of your tendency to sabotage yourself. Stop blamingyour losses on bad luck or on others and take responsibility for the results.Start keeping a diary—a record of all your trades, with reasons for enteringand exiting them. Look for repetitive patterns of success and failure. Thosewho do not learn from the past are condemned to repeat it.
You need a psychological safety net the way mountain climbers need theirsurvival gear. I found the principles of Alcoholics Anonymous, outlined laterin this chapter, to be of great help. Strict money management rules also pro-vide a safety net.
If you seek therapy for your trading problems, choose a competent thera-pist who knows what trading is about. You are ultimately responsible foryour own therapy and must monitor its progress. I usually tell my patientsthat if a month goes by without clear signs of improvement, then therapy isin trouble. When therapy shows no progress for two months, it is time toseek a consultation with another therapist.
8. TRADING PSYCHOLOGY
Your feelings have an immediate impact on your account equity. You mayhave a brilliant trading system, but if you feel frightened, arrogant, or upset,your account is sure to suffer. When you recognize that a gambler’s high orfear is clouding your mind, stop trading. Your success or failure as a traderdepends on controlling your emotions.
When you trade, you compete against the sharpest minds in the world.The field on which you compete has been slanted to ensure your failure. Ifyou allow your emotions to interfere with your trading, the battle is over.
You are responsible for every trade that you make. A trade begins whenyou decide to enter the market and ends only when you decide to take your-self out. Having a good trading system is not enough. Most traders with goodsystems wash out of the markets because psychologically they are not pre-pared to win. , “ :28 INDIVIDUAL PSYCHOLOGYBending the Rules
Markets offer enormous temptations, like walking through a gold vault orthrough a harem. Markets evoke powerful greed for more gains and a greatfear of losing what we’ve got. Those feelings cloud our perceptions ofopportunities and dangers.
Most amateurs feel like geniuses after a winning streak. It is exciting tobelieve that you are so good you can bend your own rules and succeed.That’s when traders deviate from their rules and go into a self-destruct mode.
Traders gain some knowledge, they win, their emotions kick in, and theyself-destruct. Most traders promptly give their “killings” back to the markets.The markets are full of rags to riches to rags stories. The hallmark of a suc-cessful trader is his ability to accumulate equity.
You need to make trading as objective as possible. Keep a diary of allyour trades with “before and after” charts, keep a spreadsheet listing all yourtrades, including commissions and slippage, and maintain very strict moneymanagement rules. You may have to devote as much energy to analyzingyourself as you do to analyzing the markets.
When I was learning how to trade, I read every book on trading psychol-ogy I could find. Many writers offered sensible advice. Some stressed disci-pline: “You cannot let the markets sway you. Do not make decisions duringtrading hours. Plan a trade, and trade a plan.” Others stressed flexibility: “Donot enter the market with any preconceived notions. Change your planswhen markets change.” Some experts suggested isolation—no businessnews, no Wall Street Journal, no listening to other traders, just you and themarkets. Others advised being open-minded, keeping in touch with othertraders and soaking up fresh ideas. Each piece of advice seemed to makesense but contradicted other equally sensible advice.
I kept reading, trading, and focusing on system development. I also con-tinued to practice psychiatry. I never thought the two fields were con-nected—until I had a sudden insight. The idea that changed how I tradecame from psychiatry.
The Insight That Changed My Trading
Like most psychiatrists, 1 always had some patients with alcohol problems. Ialso served as a consultant to a major drug rehabilitation program. It did not9. TRADING LESSONS FROM AA 29
take me long to realize that alcoholics and addicts were more likely torecover in self-help groups than in classical psychiatric settings.
Psychotherapy, medications, and expensive hospitals and clinics can soberup a drunk but seldom succeed in keeping him sober. Most addicts quicklyrelapse. They have a much better chance to recover if they become active inAlcoholics Anonymous (AA) or other self-help groups.
Once I realized that AA members were likely to stay sober and rebuildtheir lives, I became a big fan of Alcoholics Anonymous. I began sendingpatients with drinking problems to AA and related groups, such as ACOA(Adult Children of Alcoholics). Now, if an alcoholic comes to me for treat-ment, J insist that he also go to AA. I tell him that to do otherwise wouldmean wasting our time and his money.
One night, many years ago, I stopped by a friend’s office on the way to aparty at our department of psychiatry. We had two hours before the party,and my friend, who was a recovering alcoholic, said: “Do you want to takein a movie or go to an AA meeting?” I had sent many patients to AA but hadnever been to a meeting, since I have never had a drinking problem. Ijumped at a chance to attend an AA meeting — it was a new experience.
The meeting was held at a local YMCA. A dozen men and a few womensat on folding chairs in a plain room. The meeting lasted an hour. I wasamazed by what I heard — these people seemed to talk about my trading!
They talked about alcohol, but as long as I substituted the word “loss” for“alcohol,” most of what they said applied to me! My account equity was stillswinging up and down in those days. I left that YMCA room knowing that Ihad to handle my losses the way AA handles alcoholism.
9. TRADING LESSONS FROM AA
Almost any drunk can stay sober for a few days. Soon, the urge to drinkoverwhelms him again and he retums to the bottle. He cannot resist his urgebecause he continues to feel and think like an alcoholic. Sobriety begins andends inside a person’s mind.
Alcoholics Anonymous (AA) has a system for changing the way peoplethink and feel about drinking. AA members use a 12-step program forchanging their minds. These 12 steps, described in the book Twelve Stepsand Twelve Traditions, refer to 12 stages of personal growth. Recoveringalcoholics attend meetings where they share their experiences with other30 INDIVIDUAL PSYCHOLOGY
recovering alcoholics, supporting each other in their sobriety. Any membercan get a sponsor — another AA member whom he can call for support whenhe feels the urge to drink.
AA was founded in the 1930s by two alcoholics —a doctor and a traveling
salesman. They began meeting and helping each other stay sober. Theydeveloped a system that worked so well, others began to join them. AA hasonly one goal—to help its members stay sober. It does no fund-raising, takesno political positions, and runs no promotional campaigns. AA keeps grow-ing thanks only to word of mouth. It owes its success only to its effective-ness.The 12-step program of AA is so effective that people with other prob-lems now use it. There are 12-step groups for children of alcoholics, smok-ers, gamblers, and others. I have become convinced that traders can stop los-ing money in the markets if they apply the key principles of AlcoholicsAnonymous to their trading.
Denial
A social drinker enjoys a cocktail or a glass of wine or beer but stops whenhe feels he’s had enough. An aicoholic’s chemistry is different. Once analcoholic takes a drink, he feels an urge to drink more, until he gets drunk.
A drunk often says that he needs to cut down on alcohol, but he cannotadmit that his drinking is out of control. Most drunks deny that they are alco-holics. Try telling an alcoholic relative, friend, or employee that his drinkingis out of control and damaging his life and you will run into a wall of denial.
An alcoholic often says: “My boss fired me ’cause I was hung over andcame in late. My wife took the kids and left ’cause she had no sense to beginwith. My landlord is trying to kick me out of the apartment ’cause I’m a littlebehind on the rent. I’m gonna have to cut down on my drinking, and every-thing will be all right.”
This man has lost his family and his job. He is about to lose the roof overhis head. His life is spinning out of control— but he keeps saying that he cancut down on his drinking. This is denial!
Alcoholics deny their problems while their lives are falling apart. Most ofthem nurse the fantasy of being able to control their drinking. As long as analcoholic believes that he can “control his drinking,” he is headed downhill.Nothing will ever change, even if he gets a new job, a new wife, and a newlandlord.9. TRADING LESSONS FROM AA 31
Alcoholics deny that alcohol controls their lives. When they talk of reduc-ing drinking, they talk about managing the unmanageable. They are like adriver whose car spins out of control on a mountain road. When the carcareens down a cliff, it is too late to promise to drive carefully. An alco-holic’s life careens out of control while he denies he’s an alcoholic.
There is a stark parallel between an alcoholic and a trader whose accountis being demolished by losses. He keeps changing trading tactics, acting likean alcoholic who tries to solve his problem by switching from hard liquor tobeer. A loser denies that he has lost control over his course in the market.
Rock Bottom
A drunk can begin his journey to recovery only after he admits that he is analcoholic. He must see that alcohol controls his life and not the other wayaround. Most drunks cannot accept this painful truth. They can face it onlyafter they hit rock bottom.
Some alcoholics hit rock bottom when they develop a life-threatening ill-ness. Others hit rock bottom after being rejected by their family or losing ajob. An alcoholic needs to sink to a point so low, so deep down in the gutter,so unbearably painful that it finally penetrates his denial.
The pain of hitting rock bottom feels intolerable. It makes an alcoholic seehow deeply he has sunk. This pain penetrates his denial. He sees a stark andsimple choice — either turn his life around or die. Only then is an alcoholicready to begin his journey to recovery.
Profits make traders feel powerful and give them an emotional high. Theytry to get high again, put on reckless trades, and give back their profits. Mosttraders cannot stand the pain of a string of severe losses. They die as tradersafter hitting rock bottom and wash out of the markets. The few survivorsrealize that the main trouble is not with their methods, the trouble is withtheir thinking. They can change and become successful traders.
The First Step
An alcoholic who wants to recover has to go through twelve steps — twelvestages of personal growth. He needs to change how he thinks and feels, howhe relates to himself and others. The first step of AA is the hardest.
The first step an alcoholic has to take is to admit that he is powerless over32 INDIVIDUAL PSYCHOLOGY
alcohol. He must admit that his life has become unmanageable, that alcoholis stronger than he is. Most alcoholics cannot take that step, drop out, and goon to destroy their lives. .
If alcohol is stronger than you, then you can never touch it again, not a sipfor as long as you live. You have to give up drinking forever. Most drunks donot want to give up that pleasure. They destroy their lives rather than takethe first step of AA. Only the pain of hitting rock bottom can supply themotivation to take that first step.
One Day at a Time
You have probably seen bumper stickers on cars that say “One day at a time”or “Easy does it.” Those are AA slogans, and people who drive those carsare probably recovering alcoholics.
Planning for life without alcohol can seem overwhelming. That’s why AAencourages its members to live sober one day at a time.
The goal of every AA member is to stay sober today and go to bed sobertonight. Gradually, days become weeks, then months, then years. AA meet-ings and other activities help each recovering alcoholic stay sober, one day ata time.
Recovering alcoholics receive —and give others— invaluable support andfellowship at these meetings. They are held at all hours, all over the world.Traders have much to learn from those meetings.
An AA Meeting
One of the best things that a trader can do is go to an AA meeting. I espe-cially recommend it to a trader on a losing streak. Call AlcoholicsAnonymous and ask about the next “open meeting” or “beginners’ meeting”in your area.
A meeting lasts about an hour. You can sit in the back of the room and lis-ten carefully. There is no pressure to speak, and nobody asks for your lastname.
Each meeting begins with a long-term member getting up and speakingabout his or her personal struggle for recovery from alcoholism. Severalother members share their experiences. There is a collection to coverexpenses — most people give a dollar. All you have to do is listen carefully,10. LOSERS ANONYMOUS 33
and every time you hear the word “alcohol,” substitute the word “loss” for it.You will feel as if the people in the meeting are talking about your trading!
10. LOSERS ANONYMOUS
A social drinker enjoys an occasional drink, but an alcoholic craves alcohol.He denies that alcohol controls and destroys his life — until he reaches a per-sonal crisis. It may be a life-threatening illness, unemployment, desertion bya family member, or another unbearably painful event. AA calls it “hittingtock bottom.”
The pain of hitting rock bottom punctures an alcoholic’s denial. He sees astark choice — to drown or to turn and swim up for air. His first step to recov-ery is to admit that he is powerless over alcohol. A recovering alcoholic cannever drink again.
Loss is to a loser what alcohol is to an alcoholic. A small loss is like a sin-gle drink. A big loss is like a bender. A series of losses is like an alcoholicbinge. A loser keeps switching between different markets, gurus, and tradingsystems. His equity shrinks while he is trying to re-create the pleasurablesensation of winning.
Losing traders think and act like alcoholics, except that their speech is notslurred. The two groups are so much alike that you can predict what a loserwill do by using alcoholics as a model.
Alcoholism is a curable disease —and so is losing. Losers can change ifthey start using the principles of Alcoholics Anonymous.
The Urge to Trade
Successful traders treat drawdowns the way social drinkers treat alcohol.They have a little and stop. If they take several losses in a row, they take thatas a signal that something is wrong: It is time to stop and rethink their analy-sis or methods. Losers cannot stop—they keep trading because they areaddicted to the excitement of the game and keep hoping for a big win.
One prominent trading advisor wrote that the pleasure of trading washigher than that of sex or flying jet aircraft. Just as an alcoholic proceedsfrom social drinking to drunkenness, losers take bigger and bigger risks.They cross the line between taking a business risk and gambling. Manylosers do not even know that line exists.34 INDIVIDUAL PSYCHOLOGY
Losers feel the urge to trade, just as alcoholics feel the urge to drink. Theymake impulsive trades, go on trading binges, and try to trade their way out ofa hole. .
Losers bleed money from their accounts. Most of them bust out, but someturn to managing other people’s money after they lose their own; still otherssell advisory services, like burned-out drunks who wash glasses in a bar.
Most losers hide their losses from themselves and from everyone else.They keep shuffling money, keep poor records, and throw away brokerageslips. A loser is like an alcoholic who does not want to know how manyounces of liquor he drank.
Into the Hole
A loser never knows why he loses. If he knew, he would have done some-thing about it and become a winner. He keeps trading in a fog. A loser triesto manage his trading the way an alcoholic tries to manage his drinking.
Losers try to trade their way out of a hole. They switch trading systems,buy new software, or take tips from a new guru. They act out a rescue fan-tasy — a charming belief in Santa Claus. Their desperate belief in magic solu-tions helps many advisors sell their services to the public.
When losses mount and equity shrinks, a loser acts like an alcoholicthreatened with an eviction or a firing. A loser grows desperate and convertsoutright positions into spreads, doubles up on losing positions, reverses andtrades in the opposite direction, and so on. Losers get as much good fromthese maneuvers as an alcoholic who switches from hard liquor to wine.
A losing trader careens out of control, trying to manage the unmanage-able. Alcoholics die prematurely, and most traders bust out of the marketsand never come back. New trading methods, hot tips, and improved softwarecannot help you until you leam to handle yourself. You have to change howyou think in order to stop losing and begin your recovery as a trader.
Losers get drunk on losses; they’re addicted to losses. Traders prefer prof-its, but even losses provide plenty of excitement. The pleasure of trading isvery high. Few losers are actively trying to lose — but then few alcoholics areconsciously trying to end up in the gutter.
A loser keeps getting high from trading while his equity shrinks. Trying totell him that he is a loser is like trying to take a bottle away from a drunk. Aloser has to hit rock bottom before he can begin to recover.10. LOSERS ANONYMOUS 35Rock Bottom
Hitting rock bottom feels horrible. It is painful and humiliating. You hit itwhen you lose money you cannot afford to lose. You hit it when you gambleaway your savings. You hit it after you tell your friends how smart you areand later have to ask them for a loan. You hit rock bottom when the marketcomes roaring at you and yells: “You fool!”
Some people hit rock bottom after only a few weeks of trading. Otherskeep adding money to their account to postpone the day of reckoning. Ithurts to see a loser in the mirror.
We spend our lifetimes building up self-esteem. Most of us have a highopinion of ourselves. It hurts a smart and successful person to hit rock bot-tom. Your first impulse may be to hide, but remember you are not alone.Almost every trader has been there.
Most people who hit rock bottom die as traders. They slink away from themarket and never look back. Brokerage records indicate that 90 out of 100people trading today will probably be gone from the markets a year fromnow. They will hit rock bottom, crumble, and leave. They will try to forgettrading as they would a bad dream.
Some losers will lick their wounds and wait until the pain fades away.Then they will return to trading, having learned little. They will be fearful,and their fear will further impair their trading.
Very few traders will begin the process of change and growth. For theserare individuals, the pain of hitting rock bottom will interrupt the viciouscycle of getting high from winning and then losing everything and crashing.When you admit that you have a personal problem that causes you to lose,you can begin building a new trading life. You can start developing the disci-pline of a winner.
The First Step
An alcoholic needs to admit that he cannot control his drinking. A traderneeds to admit that he cannot control his losses. He needs to admit that hehas a psychological problem with the losses and that he is destroying histrading account. The first step of an AA member is to say: “I am an alco-holic, I am powerless over alcohol.” As a trader, you have to take your firststep and say: “I am a loser, I am powerless over losses.”36 INDIVIDUAL PSYCHOLOGY
A trader can recover using the principles of Alcoholics Anonymous.Recovering alcoholics struggle to stay sober, one day at a time. Now youhave to struggle to trade without losses, one day at a time.
You may say this is impossible. What if you buy, and the market immedi-ately ticks down? What if you sell short at the bottom tick, and the marketrallies? Even the best traders lose money on some trades.
The answer is to draw a line between a businessman’s risk and a loss. Atrader must take a businessman’s risk, but he may never take a loss greaterthan his predetermined risk.
A storekeeper takes a risk every time he stocks new merchandise. If itdoes not sell, he will lose money. An intelligent businessman takes only risksthat will not put him out of business even if he makes several mistakes in arow. Stocking two crates of merchandise may be a sensible business risk, butstocking a full trailer is probably a gamble.
As a trader, you are in the business of trading. You need to define yourbusinessman’s risk—the maximum amount of money you will risk on anysingle trade. There is no standard dollar amount, just as there is no standardbusiness. An acceptable businessman’s risk depends, first of all, on the sizeof your trading account. It also depends on your trading method and pain tol-erance.
The concept of a businessman’s risk will change the way you manageyour money (see Chapter 10, “Risk Management”). A sensible trader neverrisks more than 2 percent of account equity on any trade. For example, if youhave $30,000 in your account, you may not risk more than $600 per trade,and if you have $10,000, you may not risk more than $200. If your accountis small, limit yourself to trading less expensive markets, or mini-contracts.If you see an attractive trade but your stop would have to be placed wheremore than 2 percent of equity would be at risk — pass that trade. Avoid risk-ing more than 2 percent on a trade the way a recovering alcoholic avoidsbars. If you are not sure how much to risk, err on the side of caution.
If you blame excess commissions on a broker and slippage on a floortrader, you give up control of your trading life. Try to reduce both, but takeresponsibility for them. If you lose even a dollar more than your business-man’s risk, including commissions and slippage, you are a loser.
Do you keep good trading records? Poor record-keeping is a sure sign of agambler and a loser. Good businessmen keep good records. Your tradingrecords must show the date and price of every entry and exit, slippage, com-missions, stops, all adjustments of stops, reasons for entering, objectives for10. LOSERS ANONYMOUS 37
exiting, maximum paper profit, maximum paper loss after a stop was hit, andany other necessary data.
If you bail out of a trade within your businessman’s risk, it is normal busi-ness. There is no bargaining, no waiting for another tick, no hoping for achange. Losing a dollar more than your established businessman’s risk is likegetting drunk, getting into a brawl, getting sick to your stomach on your wayhome, and waking up in the gutter with a headache. You would never wantthat to happen.
A Meeting for One
When you go to an AA meeting, you will see people who have not had adrink in years stand up and say: “Hello, my name is so-and-so, and J] am analcoholic.” Why do they call themselves alcoholics after years of sobriety?Because if they think they have beaten alcoholism, they will start drinkingagain. If a person stops thinking he is an alcoholic, he is free to take a drink,then another, and will probably end up in the gutter again. A person whowants to stay sober must remember that he is an alcoholic for the rest of hislife.
Traders would benefit from our own self-help organization—I’d call itLosers Anonymous. Why not Traders Anonymous? Because a harsh namehelps to focus attention on our self-destructive tendencies. After all,Alcoholics Anonymous do not call themselves Drinkers Anonymous. Aslong as you call yourself a loser, you focus on avoiding losses.
Several traders have argued against what they thought was the “negativethinking” of Losers Anonymous. A retired woman from Texas, a highly suc-cessful trader, described her approach to me. She is very religious and thinksit would not please the Lord for her to lose money. She cuts her losses veryfast because of that. I thought that our methods were similar. The goal is tocut losses due to some objective, external rule.
Trading within a businessman’s risk is like living without alcohol. Atrader has to admit that he is a loser, just as a drunk has to admit that he is analcoholic. Then he can begin his journey to recovery.
This is why every morning before trading I sit in front of the quote screenin my office and say: “Good morning, my name is Alex, and I am a loser. Ihave it in me to do serious financial damage to my account.” This is like anAA meeting —it keeps my mind focused on the first principles. Even if I take38 INDIVIDUAL PSYCHOLOGY
thousands of dollars out of the market today, tomorrow I will say: “Goodmorning, my name is Alex and I am a loser.”
A friend of mine joked: “When I sit in front of my quote machine in themorning, | say, ‘My name is John, and I’m gonna rip your throat out.’” Histhinking generates tension. “Losers Anonymous” thinking generates serenity.A trader who feels serene and relaxed can focus on looking for the best andsafest trades. A trader who is tense is like a driver who freezes at the wheel.When a sober man and a drunk enter a race, you know who is more likely towin. A drunk may win once in a while thanks to luck, but the sober man isthe one to bet on. You want to be the sober man in the race.
11. WINNERS AND LOSERS
We come to the market from different walks of life and bring with us themental baggage of our upbringing and prior experiences. Most of us find thatwhen we act in the market the way we do in our everyday life, we losemoney.
Your success or failure in the market depends on your thoughts and feel-ings. It depends on your attitudes toward gain and risk, fear and greed, andon how you handle the excitement of trading and risk.
Most of all, your success or failure depends on your ability to use yourintellect rather than act out your emotions. A trader who feels overjoyedwhen he wins and depressed when he loses cannot accumulate equitybecause he is controlled by his emotions. If you let the market make you feelhigh or low, you will lose money.
To be a winner in the market you must know yourself and act coolly andresponsibly. The pain of losing scares people into looking for magic meth-ods. At the same time, they discard much of what is useful in their profes-sional or business backgrounds.
Like an Ocean
The market is like an ocean—it moves up and down regardless of what youwant. You may feel joy when you buy a stock and it explodes in a rally. Youmay feel drenched with fear when you go short but the market rises and yourequity melts with every uptick. These feelings have nothing to do with themarket — they exist only inside you.11. WINNERS AND LOSERS 39
The market doesnot know you exist. You can do nothing to influence it.You can only control your behavior.
The ocean does not care about your welfare, but it has