When I watched High Probability Trader's (HPT's) recent video, it brought back so many painful memories of my own market debacle in 1982. The pain, the loss, the self-loathing: it literally hurt for me to watch the video. But I respect him tremendously for posting it. It's a side of trading no one really likes talking about.
Markets go through crises of confidence and so do people. And, for markets as for people, the downside is always so much quicker than the upside.
Markets crash when there's something fundamentally amiss. We see it now in the housing and credit markets; at other times in market history we've had other catalysts. Our personal crises also come when something is fundamentally amiss. My own trading meltdown in 1982 was a reflection of a much larger dead end that I had created for myself in relationships and career.
That led me to change everything in 1983. I laid the groundwork for a new job that would start me on a path toward working with healthy people using a little-known set of techniques called brief therapy. I tossed the weed, cut way back on the alcohol, and finished the year at a New Year's party where I met Margie, my wife now of 24 years. I also took a long break from the markets and only returned after a lengthy period of study--and a new approach to money management.
Tomorrow morning I'll take a long historical look and tell you what tends to happen after market declines of the magnitude we've seen lately. I don't want to spoil the ending, but the gist is that crisis very often brings opportunity.
And so it is in life--IF we muster the heroic spirit to change what's fundamentally amiss. Maybe someday, HPT, you'll be a 53 year old guy writing about the painful crisis that made the turnaround possible. That will make it all worthwhile--