[DanielL]

Hi Laura,

Thanks for checking up on me.

My life has stabilized quite a lot since the latest disaster in March, but there’s still a long way to go on the road to recovery.

I continue to trade at low-risk, treating it as a business. Occasionally I get an impulse to take a big risk and gamble on the markets, but since I only look at the markets at night when they’re closed, I’m able to resist most of my impulses. The result has been steady profits rolling in. Nothing huge, but when I treat trading like a business, it rewards me as a business should, with reasonable profits.

It will take a couple of years to get back to where I was before, but my path is set. I’ll emerge from this stronger and more disciplined than ever. It’s not terribly exciting, but it works.

Hope you have been doing well also!

Daniel

[DanielL]

Hi Laura,

Thanks for checking in on me. I’ve been focusing on work and not trading much. I only trade when it makes business sense to do so, since I can’t watch the market during the day without going into a hypnotic daze. It’s too easy for greed to take over, so I keep my distance.

Ironically, taking it slow and easy actually pays off the most. I’ve been treating the market like a business, not a game, and not looking at it during the day. That simple approach just gave me my best month ever in April. By far.

It’s clear that greed is the great enemy. The more we detach ourselves from money, the more easily riches enter into our life and stay there. It’s only when we voraciously obsess over money and “winning” that we lose ourselves to our lesser impulses.

So that’s where I am right now. I’m just working, trying to live a sane life, moving to an apartment closer to work (which is more modest than my uptown high rise apartment), and just living simply.

It’s hard to believe how easy life becomes when we just keep it simple. It’s one of those cruel ironies that many of us discover late in life. I feel lucky to have learned this at 36.

Another lesson: gratitude is the cure for greed. One cannot become consumed by greed when they are grateful for what they already have, or even just for being alive.

Thank you again!

Daniel

[DanielL]

Hi Sara, I really enjoy hearing from you. I am managing my addiction following the plan before. Not looking at the market during the day. Only trading from a plan. Not using much leverage. It keeps the cravings away, and turns trading into a pretty ordinary (yet fulfilling) business. It’s all about avoiding the triggers that get me excited.

So far that is working. I’m not having any problems at all, and am back to successfully growing my investing and trading account while focusing on work during the day. The feelings of regret are still there, but I figure that as long as I stay disciplined, I can get back to where I was in 3 years. Life goes on, and now I have a new perspective.

I do need to exercise more, though, and that is the next item on my list, after I move to my new apartment (downsizing, moving closer to work). I’m still scared I’ll fall back into the addiction, but as long as I stay aware and stick to my plan things will probably turn out okay.

[DanielL]

Today, the markets are crashing. The price of the stock index futures, and the price of oil both reached pre-planned targets, and I traded as planned.

I did not feel any cravings at all, since it was all part of a detached, logical plan. But suddenly, I doubled the size of the trade and I felt The Craving return, roaring back to life. When I realized what happened, I closed that position and bought its size back to normal.

The Craving disappeared. It looks like as long as I don’t use a lot of leverage and trade from a plan, the gambling mentality stays under control. I’ll have to see how it goes, but it felt pretty scary when I impulsively doubled the size of my trade and the cravings roared back to life.

Thank you to everyone so far for your responses!

[DanielL]

Hi Sara, doing ok I guess. Still very sad about this whole situation. Exercise helps to burn off some of the stress. I’m starting to think that unless I get my act together soon, I will never get back to where I was before in life financially. I’m having trouble focusing on my job.

I’m downsizing to a much less expensive apartment, and not going out to restaurants or bars anymore. I know It’s important to stay positive and optimistic, but losing almost a decade of progress like this seems like such a waste.

This could be a long process. I should probably lower my expectations of life in general, to get over the disappointment.

[DanielL]

That is a good point Sara, thank you. I will not bring up dollar amounts or percentages in any posts in the future. This recovery will take 2 to 5 years, depending on how much discipline I bring to it. I just need to be patient.

Fortunately, I prefer to live a simple life, so my cost of living is pretty low. I figure if I save half of my income, I can catch up and get back to a respectable net worth in that timeframe. If I can accomplish that, life will become much less stressful. But nothing worth having is ever free.

This will be the toughest journey of my life. It’s worth fighting for.

[DanielL]

It’s a bit like a doctor becoming addicted to the medications he prescribes. He treats illness and prescribes medication for a living, but also deals with an addiction to the medication that is part of his/her job.

That’s a bit what this is like.

Does the doctor just stop practicing medicine and find another career? Or does he try to find a way to cope and keep doing his job?

[DanielL]

Hi Sara,

I always feel good seeing your posts. You have no idea how great it feels.

Those are all good questions.

Yes, I would have made this trade before, during my addictive spree. But I also said no to 30 other trades I would have made. This one required a lot of patience to wait for. It’s the type of trade that, if it was the only thing I did, I would be just fine for the rest of my life. But it’s never that easy. You have to wait for these, often for weeks. Who has the patience for that, when the addiction demands constant action? That’s the challenge. Waiting for the safe opportunities to come around.

Yes there was leverage in this trade, but much less than usual. You don’t need leverage when you wait for safe opportunities. That’s the thing. You only need leverage to “force” big profits out of small opportunities. The addiction forced me to take unsafe trades and try to squeeze big money out of them using leverage. That is a recipe for disaster, and something I hope I never do again.

The trade had defined risk. It would have closed automatically if the market proved me wrong, without any decision on my part. It was pre-planned. I didn’t even look at it during market hours, so I could stay detached. Another key, since looking at the market during the day is mesmerizing and brings out cravings to be part of the action. Never make decisions while the market is open! There’s too much emotion and greed involved. Make decisions only when the market is closed, everything is still, and you can stay detached. That’s the lesson for me. Then it goes from gambling to planning a transaction like I would in a business.

You mentioned that’s a lot of money. In fact, it’s nothing compared to what I was “betting” before. I was putting $50,000 or more on the line before, because of leverage. This is a small trade. Hard to believe, isn’t it? That one trade could pay the rent for two months. But in the world I’m in, that’s a small amount of money. You can see how that would make it easy to fall prey to greed.

Maybe I am fooling myself. I don’t think so, though. I always feel The Craving when I’m taking wild impulsive trades (gambles). There was none of that this time. It was a pretty boring transaction, based on patience and careful planning.

I’ll probably avoid trading again unless a safe opportunity appears, and even then I will make sure I’m not feeling that Craving. I think most people will know what I mean: that surge of energy from the chest that spreads outward into the head, and makes us impatient & impulsive, but at the same time also makes us feel “alive.” When a trade is boring, it’s just business as usual. No craving. I need to stay with boring. If I ever start having fun thrills while trading, I’ll need to stop because that’s when it will get out of control.

For now I’m only risking small amounts, so if I lose my mind again the damage will be limited. The rest of my money is in a safe account that I cannot touch (it’s restricted for 2 years).

It’s risky to go through with this, but I have to try. I can let go of my loss – money is replaceable. But I can never, ever let go of the markets, finance, and investing. I will try and see what happens, limiting the risk. If I’m wrong and going down a wrong path, please speak out, because I really value everyone’s opinion here.

Daniel

[DanielL]

I traded today after 4 days of abstaining. There was a safe trade to take, and I took it live with real money. I made $2,600 this morning on that trade and closed it.

I did NOT feel any type of buzz when I made the trade. It felt purely rational, a small trade using a strategy I had planned last night while the market was closed. I feel no urge to take another trade.

I’m a bit disappointed that I took the trade live, but also pleased that there is no compulsiveness, cravings, or greed surrounding it. I just feel serene and detached. No urge to repeat this trade a hundred times. It’s come and gone.

The key is the mindset. I let go of the loss, or at least I’m trying to. I’m not trying to “make it back” (at least not right now). The trade was planned calmly while the market was closed, and I just executed my plan using a small amount of money.

Am I falling back into gambling, or is this a sign that I can return to normal, at some point, if I stay detached and avoid greed?

It will take a long time to figure all of this out.

Life would have been so simple if I had just stayed in the Navy. That’s my regret for the day.

[DanielL]

You’re right. I have done well in my paper trading so far in just three days. And they are pretty conservative trades too. The market is offering immense opportunities this week.

I felt that feeling you described: If only this was real money, I could have made 8% of my loss back in just 3 days. I felt the urges and I let them go immediately. Practicing mindfulness and being aware of what’s going on helps a lot.

I’m not ready to give up on investing completely. It’s been a part of my life since I was 11. I never had any issues until I turned 33. I can’t imagine a life without the markets, despite the pain they have put me through. I will try to make it work, without placing real money at risk, and if I can make it through a couple of years without a problem, I’ll try again gently. In the meantime I will build bring back positive habits, such as exercising daily, and being patient. To me, this is the ultimate challenge, and I can’t go through life wondering “what if I’d tried to overcome this carefully and patiently.”

I know it sounds like I won’t let go. I can let go of the loss over time. But I will never let go of investing and the markets. I can’t imagine a life without them. It would be akin to becoming a monk and living in a monastery for all time. Maybe I just need time to distance myself from the loss and gain perspective.

It’s not easy.

[DanielL]

You’re totally right. Watching the markets during the day does create urges. Watching the prices of stocks, oil, gas, Treasury Bonds, Wheat, Corn… It’s mesmerizing. I should not be watching the markets during the day at all unless I get a pre-planned alert. Watching the markets when they’re CLOSED is a whole different game. Everything is quiet and still, and it’s easy to be detached.

I just need to find a way to go back to investing normally without being hounded by feelings that I need to trade RIGHT NOW or miss out on getting some of my money back. It will take a lot of discipline, but I know I can do it and get back to normal.

I moved to a standing desk at work so I can walk around and burn off energy anytime an urge arises. It does help a bit. Little by little I’ll regain control of my life, as the memory of the loss fades into the distance and good habits have returned. I have to be optimistic.

[DanielL]

Today I wanted to trade badly. Several times. The urges were strong. I was counting the money I could make if I traded, and how much I’d get back, and how long it would take to get everything back if I did that every day.

It took an enormous amount of restraint as I watched the market prices tick by every second for hours. But I made it through the day without placing a trade.

But the only reason I made it through today without trading (gambling) is because I kept telling myself: “if we just have patience and wait a few more days, we can invest at a great price, and hold the investment for months.”

I guess that’s better than short term, fast-money trading (gambling). But it means that I’m still fixated on the idea of being in the market, to make money from the market.

I don’t know what to make of this. At the same time, I know that if I wait I will get a great opportunity to invest for the rest of the year and just let the money sit and grow. On the other hand, what will happen once I start making big money on that investment? Will I go crazy with greed and try to speed things up, taking big risks?

Not sure how to deal with this. Time will tell. It’s really hard when the gambling addiction is mixed in with good, smart, patient investing. My goal is to separate the two once more.

[DanielL]

Thank you so much for your story, Johnny! It helps more than you realize.

And I can relate to your situation. I had an advantage trading too, but the market is a fluid thing. The ground can shift beneath your feet, and suddenly your advantage can disappear. With the gambling mentality, though, it can be difficult to adapt, since we’re not treating it like a business. All we can see is the thrill, and not missing out. It’s really a terrible thing, since we can’t see it while it’s happening. That’s the worst part.

Are you okay now? Did you make it back and cover your debt? How are you avoiding the racetrack? Did you move away?

[DanielL]

Thanks for all the support. I actually made half of all my previous wealth through investing. In real estate, in commodities. I never had a problem at all until I got into the world of leveraged options. I’ve always been a patient, disciplined investor. When you have leverage, though, you can trade 10 times, or even 20 times your money and experience enormous gains. Or massive losses. I think it’s the massive leverage that awakened the monster within me. Good trades suddenly became thrilling. Bad trades felt terrible, but the awful feeling of losing so much also is very stimulating, and you get used to the ups and downs. Normal life becomes boring.

With investing, you don’t have to time anything perfectly. You just need to be patient and know what you’re doing. When you trade with leverage, you’re either right or you’re wrong NOW. It’s fast. A lot of money can change hands quickly. Just thinking about it gives me a buzz. That’s just terribly dangerous.

So I plan to take a break from trading, maybe for a year or two, and just trade a paper account – that’s an account without actual money. The trades are simulated, so you can practice at no risk. My goal is to find a way to trade and invest again that doesn’t trigger The Craving. I need to find a balance, because finance is a passion for me. I can’t imagine a life without it. I’ve been investing since I was 11 years old.

If I can cut out the leverage – the fast money aspect – of trading, and get closer to the type of investing I used to do, which is slow and business-like, then I think I’ll be fine. But I need to try it on a paper account first, to make sure it’s safe. I know I can do it, but it’s so frustrating that I have to rebuild from scratch again.

I still hate myself for having allowed this to happen, but am slowly coming to terms with the loss. I am telling myself the $400,000 is gone. I need to make new money the proper way. I will not chase the loss by doing more of what got me into trouble. That’s really the key.

If I do ever figure out a way to trade without triggering the gambling mentality – The Craving – again, I plan to write a book about it, and a video series on YouTube, because I know for a fact that there are hundreds of thousands of people out there with the same problem. So many people get wiped out trading the markets, even if they know what they’re doing… simply because of their gambling mindset, which they may not even realize they have.

If I can do it, then I hope I can show the way for others as well. If anything, it gives me purpose and a bigger reason to get past this and grow beyond it.

[DanielL]

Thank you for sharing that, Sara. It really helps. And I have the same mindset. Even when I was wealthy and successful (I suppose I still could be again), I was super frugal, living a low-key life. I don’t even drive a car. Bus is fine by me, even with a 6-figure income (I grew up in Europe, mass transit is considered normal there).

I’m glad you’re managing well. Is your retirement income from a pension? Really, all we need to be rich is our freedom. Freedom from want, freedom from our worst inner selves. We really don’t need much to live a nice life! It’s all about expectations and mindset. That second part takes a lot of effort to get right.

[Author]

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