Are you addicted to trading?

People tends to associate addictions with physical objects, like food, cigarette, alcohol, or drug. Some people would disagree if you associate addicitions with non-physical things, like games, power, or trading/gambling. How can you be addicted to things that don’t put anything to your body? The answer is simple. Those things make you addicted to adrenaline rush. Please read this article for better explanation of gambling disorder. In short, the excitement that you get when you get 1 rocket trade will be stored in your brain more than the 100 losses that you got prior to it. Even if that 1 win don’t offset the 100 losses, your brain will crave for more adrenaline rush. That’s what make people get addicted to trading.

You might think that I categorize trading as gambling, and yes I do. I have written several posts that implicitly touch on the addiction.

• Why do traders have the greed for high profit? Because only high profit (even if it’s just backtest result) that can trigger the adrenaline rush.
• As highlighted in this and this posts, no matter how many indicators you use, in the end we are still guessing the future movement of pairs, which is (in a way) similar to gambling. A phrase that keep being used is “Past is never future”.

Taken from the first article above

Most casual gamblers stop when losing or set a limit on how much they’re willing to lose. But people with a compulsive gambling problem are compelled to keep playing to recover their money — a pattern that becomes increasingly destructive over time.

I have seen some traders who are exhibiting such symptom. Instead of cut loss and either change strategy or quit trading, they put more money into the same losing strategy. To be fair, losing isn’t a sin. Almost all traders would have at least lost once. But the difference is how you respond after the loss. One of the symptom is “Trying to get back lost money by gambling more (chasing losses)”. While trading again after a loss is normal, but if you keep on doing same thing and suffers massive losses, but you are still doing the same thing over and over again, that’s the biggest symptom in my opinion.

In the end, please trade responsibly. Only use money that you can afford to lose them all. Set a limit on how much money you put into trading. Never add more money if you are losing.