Trading Depression; What to Do When Your “Black Dog” Comes Calling

Last month I made a healthy 60% return on my initial investment.

After I cashed it all in and closed down my trades for the end of the month, I felt a sense of immense pleasure that the month was done and dusted and I’d outperformed my target by 100%!

But, by feeling this sense of pleasure I’d made a fatal mistake. I’d opened the door for the black dog to come bounding in and drag me into an emotional game of tug of war that was only ever destined for one outcome: trading depression.

How Does Depression Affect You as a Trader?

Trading depression can hit you in unexpected ways. Some symptoms hit you hard with a wallop and a crash. Others creep over your life like a shadow stealing light from the sun – silently, without noise.

You’d think that trading depression would be in the crash, bang wallop camp but, in my personal experience, it has a habit of slinking in unseen.

If you’ve been trading for any length of time, you’ve probably built up a certain level of resistance to the daily swings in emotion you experience. You accept that some days are good and some days are bad.

You train yourself to deal with this. Or, at least you think you train yourself to deal with it. Afterall, it comes with the job, right?

I used to feel the same way until one day, it all became too much to handle. Sometimes it takes a shock to the system to wake you up to the reality of where you are and what you’re doing.

And when whatever you’re doing starts to affect your family and your friends in a way that might hurt them, you know you’ve reached a turning point.

How Do You Know You’re Experiencing Trading Depression?

According to the NHS, if you were suffering from clinical depression, you would be experiencing some or all of these symptoms.

• Are you prone to severe mood swings?
• Hopelessness?
• Feelings of utter abject failure to fulfil your potential?
• Severe low self-esteem?
• Riddled with feelings of guilt?
• Unable to make decisions?
• Disinterested in everything?
• Low on energy, even though you don’t do much?
• Having suicidal thoughts?

As a trader (or speculator, as I like to call myself), it probably seems like you have these feelings on a daily, weekly or monthly basis. That’s probably because you do.

It seems to come with the territory that the more frequently you trade, the more often you experience these extreme swings in emotions.

And I think it comes down to passion, or love for what you’re doing, or by being so completely invested in what you’re doing, both emotionally and financially, that you leave the door wide open for the black dog to pay you a visit.

I don’t particularly view trading depression as exclusive to trading, but I do believe (based on personal experience) that trading evokes certain energies and passions that make depression more likely to occur more frequently if you trade often.

Why Trading Unleashes the Black Dog More Often

In 1911, Winston Churchill mentioned his ‘black dog’ in a letter to his wife. He remarked how a German Doctor had helped a friend with her depression.

I think this man might be useful to me – if my black dog returns. He seems quite away from me now – it is such a relief.

Winston Churchill, The Churchills: A Family at the Heart of History
Available to buy from Amazon (for less than a fiver)

I don’t find it surprising at all that a man often described as one of Britain’s Greatest Heroes, rich in self-belief and an immeasurable passion for his craft, may have suffered from bouts of manic depression (now called Bipolar Disorder).

It seems to be a common paradox that those gifted with greatness are also cursed by depression. And I’m only using that word ‘cursed’ so as not to rock the social boat too far by throwing my real feelings out there; that such gifted brilliance can only exist in the presence of such debilitating depression.

But what does Winston Churchill have to do with you? Or any financial trader, for that matter?

Where Does Churchill Meet Financial Traders?

If he were alive, probably in a bar! The very same bar where you go when you hit one of your down days – or maybe the off-licence on the corner if it has been a really down day.

But that’s not the only thing Churchill had in common with you. He was famed for his bouts of intense energy and brilliance, followed by periods of melancholy and dark mood swings.

Despite knowing how much you should disengage yourself from your emotions as a trader, you can’t help but experience these manic highs whenever a position moves in your favour.

The more you trade, the more you experience intense highs and intense lows.

The Passion Paradox

This particular characteristic of experiencing intensely passionate, positive, optimistic mania one day, followed by utter desolate depression on another day seems to be a common pattern for those diagnosed with bipolar disorder (depression) (1).

Traders experience this more often than most. It almost seems like a trader creates his own depression purely by operating in the environment he does.

The Human Givens Institute, a psychological think tank, published an article (2) about lifting depression. They explained why the symptoms of depression arise:

“The symptoms of depression arise when excessive worrying upsets the balance between the amount of energy burned during REM sleep and recuperative slow-wave sleep. “

The findings came about during a study of three particular factors:

• What naturally motivates people
• The causes of worrying
• The expectation fulfilment theory of dreaming 

I won’t rehash the entire article, but my interpretation of it is that at a basic, universal living level, we each have needs. These needs are both physical and emotional and partly environmental and partly genetic.

We need to meet these needs to ‘nourish’ ourselves and to continue living. When we fail to find nourishment, we begin to wither and wilt, until it feels like there is nothing left worth nourishing.

I know that as a trader, particularly one who insists on spread betting despite the fact that 75% of traders who spread bet lose money, I have certain traits, not too far akin from those of a gambling man. And I also have an unshakeable sense of self-belief.

It’s why I always refer to myself as a speculator rather than a trader. And it’s why I have kept doing it for the last 8 years, despite the losses in the early days.

This is where you meet Churchill. You share that rare and brilliant characteristic of being so passionate about your task that when you believe you’re not fulfilling it, you leave yourself open to the Black Dog’s Bark.

What To Do When Your Black Dog Comes Calling?

I do not want this to sound flippant. I don’t want to understate the serious nature of depression. Depression is a serious, real dis-ease that you should try and treat as soon as you have an inkling of your situation.

If you’ve read this far, that moment is probably right now.

At the same time, I don’t want to fluff around the actions that I took to pull drag myself out of it.

The first thing to know is that it’s OK to be all sides of you – that means accepting both the good and perceived bad as one whole. Remember, the entire notion of good and bad, right or wrong, success or failure is simply a construct of social perception. Perception is merely a frequency of thought that you can shift at will.

I know that might read like something out of the Twilight Zone, but the point in it is that life is all sides – its good and bad – and accepting that and all that comes with it, for me at least, helped me change my situation for the better.

With that in mind, these three steps might help you tune in to something else.

1. Accept the black dog. Accept that for whatever reason, your emotional or physical needs are not being met and only you can throw the stick to get him out of your way. What’s bothering you most? Why is it bothering you? OK, now you know, make a plan to put it right and change the game. It doesn’t need to be a big plan.
2. Redirect your black dog. Redirect your black dog’s attention by imagining up new and creative ways to play. Maybe go outside to a nice place you really used to enjoy and see what’s changed? Change the scenery. Change jobs if you don’t like the one you’re in. Imagine a new place, focus your attention on the ideal change you’d like to see. Stop trading for a while.
3. Give your black dog new things to play with. Remind yourself of the things you do have by taking a really simple look at your life. Be bold and fearless and, armed with the knowledge of what’s bothering you most, take your first small step towards fixing it. Then take another.

I know this sounds cliche, but it truly is only by letting your black dog in and accepting him that you can throw the stick and send him off in a different direction to go chase it. Accept your situation. Do something to change it.

It Took Me Two Years to Accept My Black Dog

It took me two years to even accept my black dog. Whilst I was lost, my family and friends suffered. I moved from day to day like a zombie, uncaring, unbothered, merely getting through one day in order to do it all again the next day.

I often thought of throwing myself out of the car door on the way to work during these times. I’ll be honest, if it wasn’t for my kids, I don’t know how it would have played out.

What I do know though is that I knew I had more to give them and when I accepted my situation honestly and accepted what part of me was being under-nourished emotionally, I was able to take a deep breath and swallow the first bitter pill to take me closer to where I needed to be.

It’s an ongoing thing. My Black Dog is part of me. He is in my nature. I’m just better and more honest about accepting him now.

But there is another side to this story worth telling. Just because you suffer from depression, it doesn’t mean you’ll never be the trader you want to be or get to the place you want to get to.

In some cases, it is precisely because you are capable of such depths of depression that you are also equally capable of its polar opposite.

You Are Not Alone: Four Other Passionate People Who Suffered From Depression

Did you know that some of the most intelligent, over-achieving role-models in history are known to have suffered from depression?

Ludwig von Beethoven’s Depression

Ludwig Von Beethoven, one of the world’s most celebrated composers, is known to have suffered from serious, suicidal depression.

Such incidents drove me almost to despair; a little more of that and I would have ended my life — it was only my art that held me back. Ah, it seemed to me impossible to leave the world until I had brought forth all that I felt was within me.

Ludwig von Beethoven, from Beethoven’s Letters: A Letter to His Brothers
Available to buy for less than a tenner at Amazon

Abraham Lincoln’s Depression

It is a well-known fact that Abraham Lincoln suffered from deep and gloomy depression. There’s no shortage of memes and motivational quotes on the internet holding aloft Lincoln as a champion of the people who conquered adversity and depression.

Joshua Wolf Senk, in his brilliant and eye-opening book Lincoln’s Melancholy wrote this:

As a young man he talked more than once of suicide, and as he grew older he said he saw the world as hard and grim, full of misery, made that way by fate and the forces of God. “No element of Mr. Lincoln’s character,” declared his colleague Henry Whitney, “was so marked, obvious and ingrained as his mysterious and profound melancholy.” His law partner William Herndon said, “His melancholy dripped from him as he walked.”

If you suffer from depression, the relatable account of Lincoln in Lincoln’s Melancholy will resonate with you and inspire you to accept your Black Dog and find your way out. I’d heartily recommend you to read the reviews of the book over at amazon to see how much it will help.

Charles Dickens’ Depression

It is said that whenever Charles Dickens set about writing a novel, he would slump into a deep depression. It was only upon the successful completion of his novels that his moods would lift.

This makes perfect sense in the context of the Passion Paradox, where one’s own destiny seems out of reach. As destiny realigns with reality, depression lifts.

Florence Nightingale’s Depression

The story of Florence Nightingale is full of inspiring ideas, hope and her lifelong battle to be seen as a female equal among great men. She often described herself as a ‘man of action’ or ‘man of business’, such is the phrase given to people who make tough decisions and get things done.

Her passion for her craft, which she believed was her calling from God, was evident in all that she did. Given the depths of such great and endless passion, is it any wonder that in her later years, when she was struck by illness and bedridden, that she fell into bouts of depression?

Again, you can see the pattern of passion and perception and being, for whatever reason, unable to fulfil that emotional need leading to depression.

Still Stuck? Try The Buddha’s Antidote for Depression

In a similar vein to that of my studies in Taoism, the Buddha offers some much-needed insight into the world of depression and even offers an ‘antidote’.

It is said that when the Buddha emerged from his meditation beneath the Bodhi tree, one of the world’s greatest antidotes to the suffering of depression was born.

The Buddha spent the remaining 45 years of his life trying to help people find their way out of suffering and depression with these three key teachings:

1. Suffering is an inherent part of existence
2. Suffering is caused by attachment and craving, and our ignorance about this
3. We can reduce suffering by letting go of attachment and craving

If you think on these teachings and apply them to your own situation, could letting go of your attachments and cravings be the key to leaving your Black Dog behind?

I don’t know the answer for you, but I do know that taking time away from the trading screens and spending more time with my family and friends rebalanced me. By changing the situation I changed my feelings and was able to see a glimmer of light.

It wasn’t quick and it wasn’t easy, but little by little, day by day, things got better.