How trading affects our relationships and relationships affect trading
In the past couple of months, I have received several e-mails from traders who were in emotional stress. With only minor corrections, the market moved up relentlessly for a year. This has been a difficult environment for traders, as a majority tends to fade market momentum, looking for volatility. I also received two e-mails from trader spouses—pouring out their hearts, as the emotional stress was effecting their relationship. One joked, “I’m thinking of starting a trader wives anonymous club.”
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Watch Steve Miller, host of ASK SLM daily at noon CT at tastytrade.com
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You might be a trader that has done great the past year, believing the momentum and benefiting from the powerful up move. This discussion still will be of value to you, someday, as eventually, every trader runs into a slump, and every market environment can offer its unique challenges.
There are common threads in the issues that arise when things get tough for traders, and often a common timeline. Here is how the issues often form.
The trader is doing OK, learning, making or losing some money. That really doesn’t matter. They have the support of their spouse or significant other. There’s not much stress, often little discussion about it.
EMOTIONS COME INTO PLAY
At some point, early on. Or, years into the process, success is taking too long to achieve and the learning costs get to be expensive. Even the more experienced trader hits a slump. Emotions start to come into play; fear, shame, anger, sadness. Often the trader finds a way to cope. There are countless addictions that come into play. We all know what they are and what works for us. The problem is, when we numb ourselves to avoid feeling the emotions that go along with the struggle, we can’t numb selectively. Things get to be more of a challenge at home. The trader is less focused on life, household commitments and family. And, the relationships are very affected with spouse/significant other and children.
MONEY FACTOR
So money has been lost and a lot of time spent in the process. However, previous to the start of trading, there was little to no agreements made between the trader and spouse about time and money. Often, at this point, the trader doesn’t even want to discuss it, because it might mean they will be asked stop trading. At this point there is a question about cash flow and savings being used. And communication between trader and spouse might be getting harder to accomplish.
SPOUSAL SUPPORT
Now it’s the spouse is looking for support. Communication is breaking down and the spouse is beginning to question many things. The support they gave early on is now much more difficult to give. They question their staying power, question themselves and question the relationship. They ask, “How can he/she do this to us?” And as the stress builds; now the spouse feels unsupported and often resentful. I encourage them at this point; there is nothing the spouse has done wrong, and they have the right to be concerned
From the trader’s perspective, challenges aside, they’re working their dream job. They gave up primary work or are actively involved in the markets part-time; loving it. Early on, they had their spouse’s blessings. Now, seemingly, that’s not so. And they feel the chill in the relationship. What had been a focus on trading their method, following their plan guidelines, has now changed. There are other influences; money, self-esteem, their marriage and more. Trading has become contaminated.
Here’s what the contamination looks like: The result is a terrible win/loss ratio.
• When a trade is good, it’s not good enough to repair the damage done to money and relationship. So the trader stays too long, misses the profit, or trades way too big.
• When a trade is bad, they can’t take the loss, hoping it comes back. They don’t want to tell the spouse things have gotten worse. They need the trade to recover. So they hold on, hoping, or even adding to bad positions. And they keep everything a secret. The dishonesty creates a negative feedback loop; more bad trades, more shame, more secrets.
• When a trade sets up, the trader is frozen. Fear sets in they’ll continue to dig a hole and self-doubt mounts.
At this point, whatever the trader had believed the role of trading was going to be in their lives has now changed. The new paradigm filters every trade with how it will affect the relationship. All intellectual thought is lost. It’s time to renegotiate, start over. This time it’s the two of you, partnering on it together.
FIVE STEPS FOR SUCCESS
The following are five steps that have a good chance of getting the relationship and trading back on a healthy road.
1. Commit to each other. Leave no doubt to your love and support. And that trading success has nothing to do with it. No matter what, you’ll survive.
2. Commit to honest, open communication. Tell each other what you need. There should be no guessing or mindreading. The trader might need more time to study or be uninterrupted by family issues. The spouse may need a commitment to more focus on family issues, one-on-one time with children or alone time with each other. This openness will reduce the fear factor that contaminates trading.
3. Create a new deal: This includes a timeframe in which some level of trading success needs to be met and, possibly, a new approach to the trading/investing endeavor (i.e. part time vs. full time).
4. Discuss the amount of capital that will be committed or recommitted. Agree to the necessary account size and maximum drawdown.
5. Trader: Create your detailed trading plan. Share it with your spouse. Include a regular time for check-in and discussion. Both agree to it, sign it and put where you both have access to it. You are partners in this endeavor
Hopefully, this article will touch traders that are receptive to its teachings, and will use this information to improve trading and their relationships. In fact, if you know someone this will help, send it to them now.
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Catch Steve Miller’s Ask Slim column in each issue of the TraderPlanet Journal.
RELATED READING
My Spouse Doesn’t Know I Trade by Darrell Jobman
Bernanke’s Bubble: Setting Up The Next Bear Market by Steve Miller
