Luck, Rituals and the Successful Trader

I've had clients who refused to wear short-sleeved shirts in the summer because they felt that wearing long-sleeved sweaters enabled them to be successful throughout their careers. In other cases, I have known traders to smoke a specific number of cigarettes by a certain time each day in order for them to feel as if the smokes were giving them the best shot at success.

It is easy to find these ritualistic behaviors humorous and excessive from an objective perspective, but to the actual trader who has made millions, tinkering with their success formula can create severe anxiety and panic.

Professional athletes, much like traders, refuse to change their rituals while their performance is hot. They don't shave before games, they abstain from sexual activity, and at times they don't even wash their uniforms. "Crash Davis," the ballplayer in the movie Bull Durham, said it best when he told a fellow teammate, "Never f--- with a winning streak."

Even during my hot streaks as a semi-professional ballplayer, I have fallen prey to such traditions as not washing my hat and always conducting the same stretching exercises before each at-bat. I have resisted my girlfriend's repeated requests to wash my hat, all in the name of a hitting streak.

The Lesson

At the root of all of these obsessions and rituals is the prevention of anxiety during a complex or stressful activity. In any profession that is rooted in daily performance outcomes that are monitored by others, we are all looking for a mental edge. We try to reduce our anxiety level by whatever means possible so our performance is not impaired.

In my experience, I believe rituals are great when things are uncertain and you are on a losing streak. Scott Proctor of the Yankees is looking to make a psychological change for the better by burning his cleats and baseball mitt. He can now compartmentalize his bad performance and feel as though he is a new player, ready to perform at an optimal level. However, rituals tend to be easily discarded once the streak dies and the individual realizes that he or she has as much control over the outcome as the gods of luck do!

I invite you to send me some daily rituals that get you through each day, and I will post them in a later column.

Please write to the Stock Doc with your trading, emotional or investing dilemmas. Dr. Cass always welcomes comments and stories, for which he'll try to offer solutions in later columns.