My friend Julian was in the US when the Icelandic volcanic eruption disrupted flights over Europe. He was ecstatic. He is self-employed and didn’t per se need to get home in a hurry. He wrote to me: “How lucky am I? I get an extra few days around the pool and the airline picks up my tab.”
Being Helpless (To do or not do)
He continued: “I was in the airport to get a status check, and I saw hoards of people standing in line to complain. I wonder why? Why would you complain over getting extra time off, when strictly speaking, you have been handed the most full proof excuse EVER?”
A couple of days later I received a phone call from him. I could tell from the tone of his voice that his initial excitement had diminished significantly. A week later he had made it to Madrid, had caught a flight to Paris, and he called me with desperation in his voice whilst on the Eurostar from Paris to London. He was frustrated, tired and annoyed with his fellow passengers.
My friend shared his fate with thousands of people all over the world. Many missed important appointments, weddings, funerals, and anything in-between. The common denominator between them all was that they were waiting for someone else to do something. There was nothing, or at least very little they could do to help themselves. They experienced the feeling of being overwhelmed with a sensation of helplessness – being stripped of the ability to act and decide one’s own fate.
My friend’s descent from ecstasy to outright misery was fast, but at least he knew that in a matter of days he would be back to normal. Civilisation depended on getting the stranded passengers back home, and home they came. Their plight was real, their helplessness was genuine, but it was over relatively quick. Julian started off enjoying the circumstances, but as soon as he realised that he had no control over his fate, his perception of his world quickly changed. His emphasis changed to getting back to “safety”, to his familiar and known habitat.
Whilst all this was going on, I was aware of the situation of another friend of mine. He was seeking asylum in the UK. The case had dragged on for months. I could only speak to him occasionally, but when I did, I could hear the desperation in his voice. Like my friend Julian, he was waiting for someone else to do something. Unlike Julian, who knew that sooner or later his flight would depart, my friend in the asylum centre had no idea when he would receive a decision.
Days and weeks drag by, and the initial euphoria of being in a new and safe environment, away from the torment at home, was quickly replaced with despair and a feeling of being stripped of the ability to act.
You may ask what this has to do with trading. In my time as a broker, I came across many clients (too many) who were waiting for their positions to turn. The initial euphoria and promise of a successful trade was replaced with an ever-growing despair and helplessness. In some cases the open losses were life-changing.
One time I was urgently called back from a business meeting in Birmingham to the office in London, where a client was sitting waiting for me. He had lost £700k on a position, and he didn’t know what to do. It represented his life-savings, and he wanted my help.
Whilst talking to the client I learned that he had kept the position open for weeks, and had at times added to the trade. Every day his despair grew. It started off as a minor loss but had grown into a life-changing loss. He was helpless, like my asylum seeker friend, and like my friend stranded on a foreign shore.
At times I am helpless too. I sit and watch a position go nowhere, or worse, going nowhere but against me. When I find myself in a helpless situation, I know that I have to be careful. The tendency is to attempt to do something just to escape the feeling of helplessness. In my case it means adding to a losing position, which rarely is a good idea (if ever).
Julian couldn’t do anything, but to wait. However he knew that his ordeal would end sooner rather than later, but he felt his perception and ability to judge a situation and put it into its proper perspective had been distorted during the ordeal.
My asylum seeker friend lives and breathes his current reality every day. He can’t do anything and he doesn’t know WHEN this will change. Unlike Julian, he has to mentally control his thought patterns every day to stay sane.
My “client” had passed the point of no return. He was living and breathing the ultimate financial disaster: personal bankruptcy. In a sense his plight was over, but no doubt a new one were starting. He was helpless, but he had a choice, which he failed to act upon.
Being Helpless
Finally there is me (and you, if you trade).
We will no doubt find ourselves in positions where we are helpless at some point in the future. When I am helpless, I try to do the right thing and remove myself from the helplessness, by taking the loss, and move on. When I struggle to do that, I think of my client and my friend in the asylum centre. I have a choice, and although my ego will fight me very hard to convince me to keep the position open (at times the ego wins – even now with all the practise I have behind me- but it is becoming a rarity), I choose to remove myself from being helpless to being in control.
When you trade, make sure you are in control. One way of helping you overcome your ego and stay in control is to remember that in trading you are only helpless as long as you decide to stay helpless. The loss is real, and it may be significant, but don’t ever let it become a life-changing loss.
Tom Hougaard
