Traders: Keeping Sane Amid the Ups and Downs

Wall Street players met the undiscovered country, one full of deep valleys, huge peaks and uncertain terrain. First, an 18% drop in the Dow industrials and S&P 500 indexes last week; then, on Monday, a leap back from the precipice. Even after the markets calmed down a bit on Tuesday, with the Dow down 76 points, for the people paid to keep track of this stuff it has all become a prescription for drinks and gallows humor and, really, anything to keep traders mentally in the black.

The traders and Wall Street insiders with the unenviable position of watching bottom after bottom fall out of the market also had to go home to face what most other Americans must face: dwindling retirement accounts and the prospect that pink slips may be on the way. And so it's no surprise that jokes like "What's the capital of Iceland? Answer: $3.50." are flooding the Internet.

One equity sales trader in New York had this to say about the sort of toll that this crash is exacting on her: "I'm eating like a pig. I'm crying in the bathroom. I'm not sleeping, and I hate life. And how are you doing, Mrs. Kennedy?"

Ari Kiev, M.D., the author of Mastering Trading Stress: Strategies for Maximizing Performance, said the physical and mental toll can be most dramatic on younger traders who never have experienced a serious bear market before. "Guys who've been around for 20 years are saying, 'I'm keeping my powder dry. I know we'll recover, I just don't know when," Dr. Kiev says. As for the younger traders, he says, "They're bewildered. The inclination is to hold on to losers because they don't want to miss out on a rebound." The newbies have the potential to be the most shaken up because "all their prior work doing fundamental analysis isn't holding up."

A Chicago futures trader in the S&P futures pit said that "last week I had my biggest day, then my worst day ever in my career, in terms of sheer magnitude of emotions," and that the traders there joke that every day is "like putting on your armor and your helmet." What kept him level last week, he said, was some advice a much older trader gave him more than 20 years ago when he first started: "Kid, the crazier the markets become the, the saner you must become."

One Wall Street commodities trader, a younger man who discovered two weeks ago via Reuters that he and his department were getting the sack, said that during the day, he and his coworkers "play lots of music" and "make a lot of crude jokes." And after the market closes, he says, they "go out and have a few drinks and laugh at the ridiculousness of it all."

"We just got the details of how long the company wants to retain us," he says. "And so we're talking about that. Whether we wanted to stay on longer or get over as quick as possible. Sort of venting our frustrations, drinking and gambling." He and his cohorts particularly like to play dice games at bars, something they started doing about a year ago but now is "a way of distracting yourself from the problems of the moment." Asked if he's up or down at dice, he said that most recently he had "lost five bucks." It's "not exactly high stake gambling," he admitted. "We don't exactly have the money to spend."