And that is the essence of change.
REGRESSION: THE MIND'S TIME TRAVEL
I tried to explore Walt's experience and gain some of that real-life immediacy, but he would have none of it. When I asked for detailed accounts of his past, he gave me factual information only. When I probed for emotion, sights, sounds, and experiences, he gave me generalized descriptions. At no point during our sessions did he reveal any anger or hurt whatsoever. Frustrated, perhaps visibly so, I cajoled Walt, "I want to know how you felt in these situations. Close your eyes and get an image in your mind of Janie criticizing you. Tell me what that's like."
Walt did not comply. He scrunched up his body, folded his arms, and said—quite spontaneously in a pouting tone—"I don't want to!"
I stared at him, dumbfounded. A big, six-foot-four guy was appearing as a young child right before my eyes.
Walt realized what was happening. "I feel like a little kid," he said with stunned wonderment.
He was absolutely right. Before our very eyes, Walt had changed.
"Regression" was the term used by Freud. When old, unresolved issues are triggered in the present, people can regress to earlier modes of coping. That is how a person can be a mature professional and a raging child at the same time. There are two selves, linked by a portal in time. Under emotional duress, an earlier mode of behavior, thought, and feeling is activated, quite apart from the mature, reasoning mind. For a moment, Walt was suspended between two worlds—like the split-brain subject P.S. Walt's rational mind was attempting to make sense of behavior beyond his control.
I grew up in Canton, Ohio. Our family was close, taking frequent vacations together, watching television, and going to basketball games. My early recollections are positive, filled with memories of taking drives as a family, finding "secret places," and getting ice cream cones. My parents as children experienced less of this closeness. Both were estranged from their parents at a relatively early age; both were partly raised and supported by older siblings. They seemed determined to provide my brother, Marc, and me with the kind of warmth and cohesion that they had not enjoyed as children. And they succeeded.
Problems occurred as I became older and wanted to live within my own world. I vividly recall our first school dance at Mason Elementary School. While the music played and the awkward adolescents took their turns on the dance floor, I sat in the back of the room, completely absorbed in William Shirer's Rise and Fall of the Third Reich. By my eighth-grade year, a sympathetic teacher occasionally exempted me from classroom exercises so that I could go to the bookshelf and devour more texts. My regular after-school activity was my paper route, which afforded me the opportunity to spend time walking and daydreaming, free of the intrusions of others.
Understandably, this immersion did not work very well at home. My family members wanted close interaction, not individual reveries. It was difficult to find isolation at home, but my one haven from human interaction was the bathroom, where I could find solitude in showers and long bathroom rituals. From an early age, my best reading and thinking was done in the bathroom.
Years later, when my wife, Margie, and I became engaged, I moved into her home with her three wonderful children, Debi, Steve, and Laura. Within a matter of days, conflict erupted. The kids needed to get to school in time, and I was ruining their schedule. How? By spending inordinate amounts of time in the bathroom!
Completely outside my conscious awareness, my new family situation felt to me like the old one: close, loving, too close. I regressed to my earlier mode, taking lengthy showers and dawdling through my routine of shaving, hair combing, and so on. As a child, that mode of coping was reasonably constructive, allowing me to establish a measure of solitude without losing family cohesion. Later, however, in a very different life context, the lengthy bathroom routines were completely dysfunctional, creating conflicts. I had outgrown an earlier self.
Now, sitting in the cafe section of a Wegman's grocery store, writing furiously on the laptop while I sip my coffee, Philip Glass playing on the CD player in the background, I'm probably not much different from that boy who was reading Shirer during the dance. I do much of my writing in busy public places where I am unlikely to see people I know—an uneasy compromise between being in and out of the social world. It's not perfect, but it does keep me out of the bathroom.
ENTERING THE TIME PORTAL
Regression is painful for many people, so much so that they will go to considerable lengths to avoid situations that might take them through time's portal. Hanging out in a bathroom protects against the feeling of submerged identity; staying far from feelings guards against outbursts of rage. Walt, in our sessions, was reenacting what he had learned so well as a child: Go into hiding. There was no bed to hide under in my office, of course, but he could certainly hide in other ways. Symbolically, the therapy room had become his threatening childhood home, dredging up conflicts and anger. The more I pressed for feelings, the further Walt went into hiding.
It was the little boy sound of "I don't want to" that clued us both to the fact that this was an echo from Walt's past. Becoming the withdrawn partner in a relationship and regressing to the young child in our session were part and parcel of the same process. To change the withdrawal, we needed to find a way to break through to that childhood self. It was time to emerge from beneath the bed.
There are a variety of ways in which people can access thoughts and feelings lying just below conscious awareness, hypnosis being the best known. These methods access felt modes of knowledge by bypassing the critical, rational mind, much like Schiffer's glasses. Dr. Nathaniel Branden has written extensively on the use of sentence-completion techniques as tools for emotional self-awareness. The counselor will offer sentence stems to clients in rapid fire. Clients fill in those stems with the first phrase that pops into their minds, without planning or censoring. The words that emerge are often quite different from the individual's normal talk, establishing a direct link to suppressed thoughts and feelings. I've generally found that my best use of this method has occurred when my sentence stems are as spontaneous as the client's replies, creating a free-flowing interaction.
Still in awe over his childlike outburst, Walt was quite willing to participate in the exercise. We began slowly:
BRETT (noticing that Walt has a remote, intellectualized look on his face, but is tightly crossing his arms in front of him): Right now, I am feeling _________.
WALT: Stressed.
BRETT: If my arms could talk, they would say _________.
WALT (hesitating): I don't know.
BRETT (escalating his voice): My arms are tense, they're screaming out _________.
WALT (frustrated, anxious, his voice a pitch higher): I don't know, I don't know.
BRETT (still escalating): Tighter, tighter. I want to say ___________.
WALT (again, the childlike voice): Back off!
BRETT (now also sounding more like a kid): If you don't back off, I'm gonna _________.
WALT (clenching his fist): Get you! (He seems more absorbed in his body's anger.)
BRETT: My fists are saying ________.
WALT: I'm mad.
BRETT: I'm mad about ________ .
WALT: HOW people treat me.
BRETT: People treat me like ________ .
WALT (animated): Shit!
BRETT: And that makes me want to _________.
WALT (with great feeling): Kill them!
Spontaneously, Walt broke from the exercise and uncrossed his arms. He clenched his fists and described in great, emotional detail how his father had once come home in a rage and yelled at his mother. Walt attempted to stop the fight, only to have his father attack him. Walt described the feeling of his father's body on top of his, his father's hands on his throat, squeezing the life from him. Only the impassioned begging of his mother kept Walt from being strangled into unconsciousness. From that point on, the family never discussed the episode. It, along with Walt, was swept under the bed.
The problem was not just withdrawal, not even just anger. The problem was murderous rage. Walt could not allow himself to be angry, to become like his father. At some level he was convinced that his anger would kill someone. Rather than act out the role of his father, he gravitated to that of his mother. Depression seemed a small price to pay. He would hurt himself but preserve others. Janie might resent his emotional unavailability, but at least he would not kill her.
During the workday, Walt was a warm, engaging student. He could reach out to patients, interact well with peers, and participate in a team with his residents and attending physicians. Once home, his hurt and anger unwittingly triggered by Janie, he shut down, regressing down the portal to the protection of passivity. He did indeed become a different person.
Notice how Walt's state changed over the course of relatively few sentence stems. The key was triggering a degree of frustration right there in the interaction. When I first asked Walt what his crossed arms are saying, he shut down with an "I don't know." By refusing to accept this answer and escalating the question, I raised the pressure. I took the role of Janie, badgering him to open up, provoking the very anger he most feared. When the anger finally emerged, it was as if a dam had broken, releasing pent-up waters. Walt's formerly passive self was suddenly filled with animation; his tight body, binding his aggression, now was alive and expressive. In this heightened state, he was immediately connected to a powerful emotional event, his fear of his father, and the fear of his own anger. As passive Walt, he was impervious to therapeutic talk; as angry, animated Walt, he was ready to face his history in a new way.
Behind the sentence-completion exercise is a therapist's trick that is quite relevant to traders. I was making Walt angry at me, prodding him until he gave expression to the emotions metacommunicated by his crossed arms. Walt felt that he could not afford to release his anger; his chief fear was that he would become his father. By allowing him to experience controlled anger in the session, therapy provided an emotional disconfirmation of his fears—an immediate, experiential affirmation that he could be angry safely. The choice, he realized, didn't have to be between angry, aggressive Dad and passive, depressed Mom. He could be someone different, angry yet lovingly connected to others at the same time.
He could only come to that realization, however, through a powerful emotional experience. If I had simply talked the words to him, he would have heard them in his passive way, and they would have had no effect.
Traders' understandings—whether of themselves or of the markets—are mediated by their states of mind. The trading implications are clear: What you know about the market—and how you respond to what you know—hinges crucially on the mind frame you are in.
To change your trading, it is necessary to first shift the gears of mind and body.
WHEN YOUR GEARS REMAIN LOCKED
"How could this happen to me?" The voice on the other end of the phone cracked, and all that I could hear for a moment were sobs. Her name was Mallory, and she was clearly in pain. "He promised me it would work out. I put everything I had into it, and now it's gone. What am I going to do? I can't just get out; I don't know what to do."
For the life of me, I could have sworn Mallory was talking about a failed marriage. But she wasn't. She was talking about her investment in a growth-oriented mutual fund recommended by her broker. It was down sharply, and Mallory felt trapped. She could not accept the loss, and she could not continue to expose herself to further punishment.
From talking with Mallory and others in similar situations, I've been struck by the ways in which people think of their investments in relationship terms. Perhaps this shouldn't be so surprising. People invest themselves in relationships with spouses, children, friends, and family members. The dynamics of risk and uncertainty are not so different, whether the relationship is romantic or financial.
My surprise came from the fact that people tend to use the same language when describing their portfolio concerns as their marital problems. Like Mallory, they begin their romance with their stocks with high expectations. Infatuated, they check quotes every day—or sometimes many times a day. When things are going well, they cannot help but share their joy with others and feel a loyalty and a bond with their chosen company. One older woman, holding a volatile stock that seemed clearly inappropriate for her stated financial needs, bristled when I raised the possibility of selling it. "It's been so good to me," she exclaimed. "How can I let it go?" Chastened, I dropped the topic. It was as if I had suggested that she contemplate putting her mother in a nursing home for the indigent.
When the romance with the stock doesn't work out, however, the feelings turn to denial, hurt, and anger. Mallory felt profoundly betrayed by her broker, by the Federal Reserve, and by the market. Worse still, her response to her fallen stock was similar to the response I have witnessed time and again among spouses who discover their partners have cheated on them. Lost is the sense of safety, security, and trust. Rarely is the hurt party ready to simply cut his or her losses and bring things to a prompt close. But neither can he or she blindly go forward in the status quo. Mallory's pain was not simply that of a financial loss, but also that of feeling trapped in an unsafe, hurtful situation.
Walt's case makes clear that people tend to act out the problems of past relationships in present ones, much as I misused the bathroom when I moved in with my new family. If you have unresolved feelings of anger toward a parent, damaged trust from a disloyal relationship, or fear and insecurity from past abuse, these experiences act as emotional lenses through which you inevitably view new relationships. These lenses, like the glasses used in Frederic Schiffer's experiments, affect how you respond to the world, creating seeming overreactions. In point of fact, however, you never really overreact to a situation; rather, you react to both present and past.
This, I have come to believe, happens in the markets far more often than is commonly recognized. Many of the dysfunctional patterns that people play out in their interpersonal relationships are duplicated in their financial investments. In the past two years, I can think of a host of examples from my trading contacts:
•Bill cannot make a firm commitment in a relationship, afraid that a woman will interfere with his career success. Bill is a day trader and cannot hold a stock overnight, despite massive statistical evidence that the lion's share of the market's advances during bull periods are attributable to rises at the market open, in response to overnight news and markets.
•Ellen does not diversify her portfolio, preferring to put all of her money in one or two stocks. When they do not reward her time, effort, and expectations, she feels depressed and dwells on her failure. She reacts with complete surprise when I point out that this was the pattern in her romantic relationships, as well.
•Ian has lost 40 percent of his trading capital in the past three months alone. Ian overtrades the market, trying to play multiple intraday swings each day, making highly leveraged bets on each trade. Intellectually, he understands the statistical concept of risk of ruin: the likelihood that, given enough trades, a string of losses will occur and devastate anyone who is overexposed with each trade. Emotionally, however, Ian needs the action. He also cannot settle down in his marriage and has had two affairs.
• Hector spends hours analyzing the markets and working on developing trading systems. Some of them are highly elaborate, and even ingenious. He finds himself second-guessing his systems, however, and overriding their signals. Invariably, this loses money for him, yet he feels compelled to tamper with his own research. As a child, Hector was badly hurt by the death of his younger brother. He spends considerable time with his own family and loves them greatly. Periodically, however, he entertains "irrational" worries that his wife or children might suddenly die.
Like Walt, all of these people are in pain. They are repeating destructive patterns blindly, and they seem unable to prevent them from recurring. Also like Walt, they are unable to simply talk themselves into doing things differently. Only pow
erful emotional experiences can help them reprogram the nonverbal minds that impel them toward self-defeat.
Every trade is made for a reason: a logical one or a psycho-logical one. When you become your own therapist, shifting gears and attending to your tacit communications, you learn to differentiate between the two reasons.
NOVELTY: THE KEY TO CHANGE
After Walt exploded in response to the sentence completion exercise, vividly describing his fear and rage at his father—as well as his fear of ever again provoking his father's anger—I posed a pointed question. I asked if, during the exercise, he had felt a desire to jump on top of me and strangle me. Aghast, Walt answered no. I then asked if he expected me to tackle and strangle him. Walt smiled and again said no. I approvingly suggested that perhaps he no longer needed to fear being angry, because he was not like his father and was no longer living with his father. Keeping himself bound up in passive muscle tension might have kept things in check as a child—much as my showers provided me with solitude—but this solution had lost its usefulness long ago. If Walt's anger really were the problem he feared it to be, surely I would have been the recipient of quite an attack in our meeting.
Once Walt unlocked his arms and fists, he could experience his past and face his fear and anger. He overcame his anxiety over his own rage by fully experiencing it—and by seeing that nothing terrible happened. Perhaps most interesting, however, is the fact that Walt didn't know he was angry until we had performed the exercise. What he knew about himself was a function of his state of consciousness: In one state, he was passive and completely lacking in self-awareness; in another state, he was vividly in touch with painful childhood memories and his reactions to these.
The Psychology of Trading Page 20