Interview Central: Dr. Janice Dorn, Part I

Dr. Janice Dorn has been a full-time futures trader since 1994, focusing on the precious metals markets. She has coached over 600 traders world-wide. She is the author of more than 500 articles on Trading Neuropsychology and Behavioral Neurofinance. Dr. Dorn is the Chief Global Risk Strategist for Ingenieux Wealth Management, Sydney, Australia.

Dr. Dorn, M.D., Ph.D. holds an M.D. in Psychiatry. She is certified by the American Board of Psychiatry and Neurology in General Psychiatry and Addiction Psychiatry. She also holds a Ph.D. in Brain Anatomy.

I really enjoyed speaking with such a prominent trading coach such as Dr. Janice Dorn. This is the first installment of that interview.

Optionetics: How did you first become interested in helping people trade the markets?

Dr. Dorn: I started trading in 1994. From 1994-1997, I made every mistake known to total personhood!   I had two doctorate degrees—a Ph.D in Brain Anatomy and an M.D. in Psychiatry. I thought I was soooo smart and could do anything, including trading the markets. Surprise, surprise! I had my butt kicked really hard and ended up with a third doctorate—a Ph.D. in losses! That was the most valuable three years, and worth every penny of it. I have not had a losing year since 2007, and all dues were paid in full a number of years ago.

I traded on my own until around 2002. At that time, I helped start a gold and silver shares trading website. I became interested in writing about the psychiatry of the markets and started to do that actively around 2003. At about the same time, I became associated with a very large technical analysis site. It was through my communication with thousands of subscribers that I saw the very real need for help with trading. I didn’t start out to help other traders. I really just wanted to write and trade for myself.

The coaching just sort of happened as the result of so much interaction with various traders at all levels of competence. I love to teach and really enjoy seeing my students do well. I am more of a facilitator for them, and they are the ones who are making progress. It is really not at all about me, rather about my students. At this time, I have coached over 600 traders.

Optionetics: Do you or your clients ever use options and if so what are your favorite strategies?

Dr. Dorn: My coaching students trade everything, including options. I don’t think there is one favorite strategy. Options are so versatile, that good traders learn vertical spreads, butterflys, etc.

The best options trader I have worked with has been at it for over 30 years. He has amassed many millions with a strategy based on selling options, usually naked options. I do not recommend this strategy for the faint of heart or the novice trader. Options traders are among the most creative of all traders. I get dizzy with all the Greeks, so I am just a lowly gold futures trader!

Optionetics: What are the things you like best about teaching people to be better traders?

Dr. Dorn: I love working with dedicated, passionate and driven people who are totally committed to their own success. I really enjoy helping them avoid all the boneheaded mistakes I made when I first started. At least I try to do that!  As you know, people often have to make their own mistakes before they really learn—but I am there for them and they know it.

Optionetics: How do you advise traders on treating losses and how to go about establishing their risk tolerance before the trade is entered?

Dr. Dorn:  Losses are part of trading. Trading is the only profession in the world where losing is winning. Every person has a different trading personality and risk tolerance. I think a 2:1 ratio is good for most.

Optionetics: Are your trading systems or your clients’ trading systems geared more toward long-term strategies or short-term strategies?

Dr. Dorn: Mostly short term—daytrading or scalping. For options traders, it is usually longer although not necessarily. For ETF traders, we may hold for a week or so. I am a scalper and daytrader so those of a similar nature tend to gravitate to me. Lately, I have been getting some people with large “long-term” portfolios who want to reassess and rebalance. This is not of any particular interest except that it provides a different perspective and, actually, kind of puts things into perspective for me. I like variety and challenge.

I am more attracted to the personality of the trader and those with whom there is an interactive fit. I work on an intense level with people, so there has to be a personality fit. My style is not for everyone—I assure you of that. I learned to trade on Globex, so I am usually up at all hours talking with traders all over the world. Trading is serious business, but it has to be fun. Why do something so intense and demanding if you do not enjoy it?

Optionetics: Thanks, Dr. Dorn, for sharing your trading philosophy with our Optionetics reading audience.

Jeff Neal 
Senior Writer, Options Strategist & Profit Strategies Radio Show Market Correspondent
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