"You cannot know your own perfection until you have honored all those who were created like you."

-- A Course in Miracles


last week's theme of identifying perfectionism in trading, the following list focuses on a specific issue that is crucially important to perfectionists: their own performance. These items share what I've termed "never-enough" thinking. As you read this list, consider how they may relate to your life generally, as well as your trading:

The goal is set unrealistically or even impossibly high.

Ron has been trading about four years on a part-time basis. He told me he considers himself a "failure" because he hasn't been able to make money on at least half of his trades. Even though he does his due diligence, his timing for entering trades has been poor. He is not comfortable going short and is inadequately capitalized. He has little appreciation of how tough it has been to time the markets in the post-bubble era, especially with his interest in trading only on the long side. He can't understand why he isn't doing better, even when he knows the indices are as bad as they've ever been in the past 30 years.

This difficulty in setting realistic expectations is perhaps the most obvious tipoff of perfectionistic thinking.

Perfectionists can't tolerate simply coming close to the goal.

They don't leave much room for acknowledging and valuing gradual steps of successive approximation, or getting closer to the goal in small steps with repeated effort. Coming close is experienced the same way as failing. This all-or-nothing thinking can lead to feelings of self-disgust, anger and regret, and it leads perfectionists to blame themselves for the "failure." Second place is viewed the same as finishing last.

Perfectionists aren't willing to be beginners.

They have little tolerance for the frustration that is natural when learning a new skill. While they may realize this is irrational, they believe it nevertheless. They expect to be able to perform perfectly from the very start. For example, if they can't learn chart-reading or can't understand different systems of trading immediately, they take it as a personal failure. They can't tolerate feeling foolish and dependent on others to help them.

Unwilling to be beginners, they shy away from anything they have not already mastered. They don't like to be seen trying something new in public, where they fear embarrassment. Sometimes perfectionists rationalize their avoidance of trying anything new as a lack of interest. They'd rather tell themselves and others that they're simply not interested than admit their inability to risk the vulnerable feelings of being a beginner.

"Never-enough" thinking often leads to procrastination.

When the perfectionist


willing to try something new, it may be only after long procrastination. Initial excitement is overcome by fear of failure, humiliation and feelings of shame. Procrastination protects the perfectionist from the less-than-perfect result.

No matter how well perfectionists perform, they struggle to feel satisfied with the outcome.

They often complain of feeling an inner emptiness instead of the joy of accomplishment. For example, Martha had only been investing online on her own part-time for two years. Still, she had managed to make enough to show a 10% profit during a time when most investors were down for the year. But she wasn't satisfied. She compared herself to experts who were making more than she was. She couldn't let herself feel good about her performance, nor could she allow herself to set her expectations at a reasonable level.

Perfectionists are unable to savor the moment of accomplishment and unwilling to celebrate the event.

After returning from a vacation during which she tasted her first

Krispy Kreme


donut, Ronda fell in love with them, using the excuse of her need for a post-Sept. 11 "comfort food" to calm her jittery nerves. She examined the company's financials, followed the stock for a while and did more "field research." This includes discovering that the glazed donuts are "heavenly" after being zapped in the microwave for five seconds.

After coming out of the microwave, she informed me, they're "light as air with no greasy aftertaste." She decided to buy the stock in late October and sold at the end of the year, not wanting to risk her profit. She caught a nice 10-point move before the stock later retraced back to her entry point. But rather than allow herself to feel good about this well-timed trade, she complained that she didn't buy enough shares and consumed too many donuts. She wouldn't allow herself to savor the gain -- although she couldn't help savoring the donuts!

The perfectionist often fears being found out as an impostor.

When the perfectionist does temporarily measure up, she only succeeds in pushing away the fear of failure for a while longer. This is part of the reason why she feels so little satisfaction and joy. Failure is always lurking just around the corner, with the next performance, promotion or evaluation. Perfectionists feel they are deceiving others; they're not as competent or worthy as they look. A surface picture of competence and control covers their inner sense of confusion and turmoil. As they achieve higher levels of responsibility, their fear of finally having their incompetence found out begins to crack the outer pretense of self-assurance.

Come back next week, as we continue the tribulations of the perfectionist in search of the perfect donut.

Steven J. Hendlin, Ph.D. is a clinical psychologist in Irvine, Calif. He has been in private practice for the last 26 years, investing for the last 20 years, and actively trading online as a position trader and long-term investor since 1996. He is the author of

The Disciplined Online Investor and maintains a site at www.hendlin.net. He is pleased to receive your comments and questions for publication in his public forum columns at

steven.hendlin@thestreet.com, but please remember that he is unable to provide personal counseling or psychotherapy through the mail.

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