Welcome to another edition of our ongoing saga, "As the Market Turns," in which traders and investors of varying levels of experience and skill struggle to negotiate a market that has brought many to their knees and confounded some of the best minds in the business.

Don't You Just Hate It When That Happens?

Dr. Hendlin, why is it that every time I buy a stock it goes down? And every time I sell a stock, it goes "oop," as Ringo would say? It is as if I have mystical powers over the market. Please don't give the classic response: There are a lot of like-minded people out there who resist taking an action and then all give in at the same time, extinguishing the number of potential buyers (sellers), thereby clearing the way for the stock to fall (rise). Sounds like a good theory, but I don't believe it. This is a legitimate question, and I know a lot of people who feel the same way. Thanks. -- M.B.

Dr. Hendlin, your columns have been excellent (and usually refreshing). I have had a horrible 12-15 months. I have made so many decisions that turned out to be wrong that I second-guess every decision I make. Also, in many cases, I fail to buy or sell because of the fear that I'm making another bad decision. If I fail to buy something, it seems like it always goes up, but if I do buy something, it usually goes down. Are you getting the picture? It's been so long since I've had a winner that I'm completely frustrated by the stock market. -- A.A.

Shrink Rap:

The good news: It's safe to say that the folks who wrote these letters don't actually have mystical forces working against them. Now the bad news: Their stock-picking skills, knowledge, experience, timing, execution and luck may not be consistently good enough to come out ahead in what has been a very tough market. Welcome to the club!

Both writers are experiencing

exactly

what so many go through in a vicious bear market loaded with churning, whipsaws and sudden volatility. The market has, until recently, whipped around so quickly that many of the classic patterns and setups that active traders are familiar with aren't working.

The fear of making "another bad decision" has kept many investors on the sidelines in a cash position for months at a time. It has led some microtraders to drastically cut down on the number of trades they take on and the size of their positions. Others have altered their trading styles, going from being scalpers to position traders, lengthening their holding periods due to the difficulty of catching significant micro-term moves. And, of course, some have given up altogether.

Part of the problem is that too many traders have only known the market as a rip-roaring bull. And they simply don't feel as confident with the incessant market churning, because it deprives them of the sense of having an "edge."Individuals need to keep in mind that they are competing against the most skilled institutional investors, hedge fund managers and daytraders in the world, many of whom have every advantage that unlimited hardware, software, information and support have to offer. Fancy

Bloomberg

terminals deliver information to this hard-core group two minutes before it gets to most retail investors, dooming many of the latter's trades.

Direct access to company management also gives many professionals a distinct edge. Information about order flow also gives them an advantage. The fastest guns in the West will already be pouncing on the "sell" button at the crest of a breakout, just as you are doubling down your bet and feeling hopeful that the upward movement will continue.

The fastest guns also know something about their odds. They know that

the tougher the market, the more their advantage will come to the forefront

. If you don't believe this, you are deluding yourself. Let me put it a bit differently: Some out there have been making a fortune skillfully shorting the market, covering their bets for huge gains, and then shorting again. They have been doing this, on and off, for the last 21 months.

Who do you think they are?

I am not trying to discourage you, but, rather, to give you the truth, or at least my perception of it. Don't beat yourself up when there are so many who have been on the losing end, so many who have felt the same frustration that the two question-writers are feeling.

If we have been forced to learn anything over the last two years, it is that

trading is not some simple parlor game for our entertainment

. It is serious business, where obviously a lot of people have lost very significant amounts of money that will change their entire futures. And unlike Monopoly, where at the end of the game our risks and mistakes are revocable, in this game our losses are real money and, too often, irreversible.

Steven J. Hendlin, Ph.D. is a clinical psychologist in Irvine, Calif. He has been in private practice for the last 25 years, investing for the last 20 years, and actively trading online as a swing trader and long-term investor since 1996. He is the author of

The Disciplined Online Investor

recently translated into Spanish. 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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