How day traders can deal with their high stress environment

NBCi presents

July 30, 1999

Psychiatrist and author Ari Kiev chats about how day traders can deal with the high stress environment of their profession.

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CNBC: Welcome to CNBC.com's MoneyTalk Live! Our guest today is Psychiatrist and Author Ari Kiev. He's here to discuss how day traders deal with the high risk and high stress environment of their profession.

Ari Kiev: It's good to be here and I hope to answer some of your questions.

Madge: Will yesterday's events lead a number of day trading firms to more closely scrutinize who they allow to use their facilities?

Ari Kiev: I certainly think it might lead some people to look a little more carefully at how they train people and prepare them, and let them know about the risks of day trading, and maybe get more security. It applies to all companies that are providing a service where there is a high risk of dissatisfaction, or failure. I can't predict what they are going to do.

GordonGekko: Should people under work stress seek a counselor who works with others with the same problem?

Ari Kiev: I think it certainly is beneficial, certainly a good idea

Xiannie: What are some signs that a day trader may be approaching dangerous territory in terms of stress?

Ari Kiev: Well, I think someone who's beginning to have trouble sleeping, irritability, loss of appetite, trouble concentrating, bouts of temper, rage, all of these things may suggest that an individual is getting to be overwhelmed by the stress of trading.

1987: Should there be more restrictions for day traders?

Ari Kiev: I think there probably ought to be more carefully criteria for entry, maybe tests, maybe people taking more specific instruction. There probably should be some effort made to train people and to acquaint them with the risks involved in this high risk activity. And I would think that the SEC is looking at regulating things, moderating advertisements enticing people to enter the business without telling them the risks. It's free enterprise zone, not exactly easy to regulate.

Lapdog: With all the abundance of brokerages offering online trading, will it become even more difficult to put regulations in place?

Ari Kiev: Yes. I guess the answer is really that the more responsible companies will acquaint people with the risks involved in the activity, and recommend courses and guidance so people will be as alert as possible to the inherent volatility and risks to trading, the risks to losses, to help people understand their responses to loss, and ways of handling that and ways of trading in more disciplined ways, such as I mention in my book "Trading to Win." There is a methodology to trading so as to keep your losses down and to maximize your opportunities. To monitor your emotional responses so they don't interfere with your performance. So it's possible to learn how to be involved in high risk activities like trading. I would think some brokerage firms will provide that education. It's like "an educated consumer is our best customer," said someone in the clothing business. It's in their best interest to train people to succeed, so they can come back and trade another day.

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