Dorn: Trading Through The Storm

I'm not afraid of storms, for I'm learning how to sail my ship…Louisa May Alcott

Here’s a note I received two weeks ago:

“I am trading poorly. I can’t get much right these days and am losing after five years of solid gains in the grains. I don’t know what is wrong with me. I have become mediocre at best and am breaking my rules. The worst part is that I keep adding to losers and end up taking big losses or getting margin calls. Something is wrong. I am bummed and burned out. Two years of gains are now gone. I feel like I might be dying.”

This is some of what I learned:

Her husband of ten years died from sudden cardiac arrest. She felt enormous guilt about this because of the heated argument they had before his death. She did not have a chance to make up and tell him how much she loved him. Instead of taking time to process this, she continued to trade and act out her emotional crisis in the markets.

Here’s the essence of our interaction:

The sequence that usually happens when you experience this type of downward spiral is as follows:

You suffered an enormous and traumatic loss.

You thought you were “OK” and could get through this by doing what you know you do best—trading. In other words, rather than taking time to process your loss, you continued to trade as if nothing was different.

Things were different. YOU were different and you started to make trading errors.

As a result of these errors, your losses began to grow. You became more depressed, less grounded and increasingly off balance. Now, your trading losses were taking center stage. You were not able to see clearly because you had double trouble. Your already-disrupted emotional state was becoming more fragile because of the losses you were taking. Losses were mounting and you became increasingly ill

You felt the need to punish yourself for unresolved guilt and shame over the death of your husband. You did this by continuing to trade badly.

Now you are in an accretive situation and vicious cycle where trading errors are producing losses that are causing you to become more emotionally unstable and making more trading errors.

You see your equity melting away.

Two years of solid gains are gone.

That is a really big deal for you. It is for anyone.

This kind of pain sears so deeply that you feel like you are dying.

What can you do?

Reach out for help. There are qualified professional to help you through this.

Allow yourself to experience all feelings without fighting them or pushing them down.

Stop trading.

If you are unable to stop trading, then trade smaller size and less frequently.

Go back to basics with your trading. Understand that you are not your position in the markets. You self worth does not depend on if you lose or win.

Remember many years ago when you first started to trade and what it felt like to be grounded and solid with your trading plan.

Visualize how it feels to win again, to be in control of your own execution.

In time, you will recover from this and grow stronger as a result of it. Life and trading are never about what happens to you. They are about what how you respond and take action in the face of what is in front of you.

Every situation, properly perceived, becomes an opportunity to heal… A Course in Miracles


Dr. Janice Dorn is the only Ph.D. (Brain Anatomist) and M.D. (Board-Certified Psychiatrist and Addiction Psychiatrist) in the world who actively trades, writes commentary on the financial markets and manages a subscription-based website. Dr. Dorn has been trading the gold futures markets full time since 1993. She has written over 1000 articles on trader and investor psychology, and mentored over 600 traders and investors.She writes on all aspects of trading psychology and provides a real-time trading service on her website: