How 2008 Scarred My Trading, Intra-Uterine Insemination, And Why Gary Numan Is The Ideal Trader.

I am sure that there are people out there who get turned on by bathroom fixtures, but that has never really been my thing.  And losing my ass in the market doesn’t rank high on my pleasure scale either.  So I think it is safe to say that I reached the nadir of 2008 sitting in a restroom at the doctor’s office, watching the markets implode on my Treo, while a plastic cup with my name on it mocked me from across the room.

The markets have been on a tear lately, with the SP 500 Index up the most on a monthly basis since 1974.  Yesterday the market ripped higher on news that the European debt crisis was “fixed”, and from what I could see on the streams everyone, and I mean everyone was killing it.

Yet I have only one swing long position open in WLT (which I featured in a recent “Trades That Didn’t Suck” video), and it’s up a measly five points.  In fact I haven’t had a true swing position open for months and have been limited to taking bits and pieces out of the market by day trading. 

Day trading used to be something I did as a complement to my core swing trade positions, but this market has forced it on me like the fruitcake at my Grandma’s house on Christmas Eve.  However as I watched the market soar into the triple digits yesterday, having missed the major move off the bottom, I realized that even more so than this recent market action, my trading is haunted by the ghost of 2008.

I often hear people ask, “well if so and so knows so much about trading, how come he isn’t a rich millionaire living in MC Hammer’s old house?”  (You know the one with the front gate that says “Hammer Time”).  The answer to that is complex.

Perhaps they are comfortable just making a steady, consistent trading income.  Maybe they get nervous when they scale their size up past a certain point.  It could be that they went through a nasty divorce and spend most of their money on alimony and child support.  Or perhaps they just have a good ole’ fashioned coke habit.

Point is, lots of the things that happen in our lives away from the markets can affect the way we trade.  Yet we all pretend they don’t, and that we trade as emotionless and clinically as Gary Numan in that video for “Cars.” 

In my “Trades That Didn’t Suck” videos I walk through what my thoughts were during a recent day trade, but I do it from the island of a calm Friday evening, usually after a few pints of Guinness.  If you watched me when those trades were live, you would see me wringing my hands, squirming in my seat, and at times even talking politely to my computer screens.  And when things in my personal life are out of whack, it can seep into my trading psyche even more so.

All of 2008 seemed to be that way for me.  My wife and I were very eager to have our second child, but for some reason nature was not helping us out, and we decided to do intra-uterine insemination (IUI) which is one step short of IVF.  You can Google it for the gory details but let’s just say it involves, a lot of shots, a turkey baster, and some bclund “love juice”.  That later part provided by me, on demand, in the comfort of the doctor’s office bathroom.

Now here is the really weird part.  As men we spend the better part of our adolescent years acting like we don’t “do it” and avoiding detection when we do “do it”.  But in the IUI scenario, I had to walk through a waiting room filled with ladies, take a sample cup from the receptionist, and go down the hall past all the nurses to the restroom.  And EVERYBODY knows what you are going in there to do.

This was my fourth time in that bathroom, one time more than is recommended with IUI, because if it doesn’t happen by the third time, chances are it ain’t going to work, and you go on to IVF. 

My recent trading had been about a successful as the procreation process.  The markets were like roaring seas, heaving back and forth in triple digit moves on a daily basis.  I was not as adept at day trading as I am now, and my swing trades were getting no traction, moving in my direction for a day or two, then gaping against me along with the overall market.  And this IUI process was screwing with my head and made it even harder to get back on track.

We had appointments daily when we got near the timing “zone”, and they were always early in the morning when the markets were moving fastest.  Aside from being stupid, it was also nearly impossible to trade or manage positions from my pre-smart phone Treo while in the waiting room.  Add to that the fact that IUI was not covered by our insurance, and was “cash on the barrelhead” each time we left the doctor’s office (ultimately totaling about $30,000), and my mental plate was full.

Here I was in that cold, sterile bathroom, watching the market tank 600 points, convinced that everybody on the other side of the door was snickering at me, and having one last shot at it before we would have to go to IVF at $25,000 a pop.  Astronauts and Super Bowl quarterbacks don’t know the pressure I was under.

“Are you doing okay in there Mr. Lund”

“Yeah, yeah, I’m fine.  Hey do you have anything out there that…well….could help me out?”

“I’m not sure what you mean”

“Come on, you know.  Like some ‘reading’ material.”

“No sir, we don’t really do that here.”

“Look, it doesn’t have to be Playboy.  Just give me an US Weekly or People.  Anything that has J-Lo in it”

“I’m sorry sir….”

I mean at that point I would have even taken Martha Stewart’s Living.

Suffice to say, I was able to deliver.

I realize now that the recent market action triggered something in me that reminded me of those trying days in 2008.  It made me lose faith in longer term price action, and kept me out of this tremendous move off the lows.

2008 was a tough year and a lot of bad things happened in it. I battled the markets in a Herculean effort and although ultimately my losses we not too bad, the emotional imprint they made on my trading did it’s damage.

But it’s over, and the good things that came out of it are still with me.  Like a better respect for risk, and the ability to modify my trading style based on the market environment.  And now that I have exercised the ghosts of that market, I can adjust my trading to catch the next swing leg when it presents itself.

Oh…and in 2009 we had a healthy, happy baby boy.

 30K….??? Yeah, he’s worth it.  But I’m only paying for community college.