Trading addiction is a real problem, not unlike alcoholism or gambling addictions. Trading strongly stimulates the reward center in one’s brain and we become addicted to that rush. Trading can cause us to feel a rollercoaster of emotions, including euphoric highs when we win big. Those with a serious problem become addicted to the highs and lows and find themselves unable to stop. Unfortunately, trading addiction causes some of the same issues that drug addicts or alcoholics face because it can wreck relationships, cost one their job, and it usually leads to financial ruin. The good news is that there are ways to manage this so that trading can be practiced correctly and in a healthy manner.
Are you here because you think you might already be addicted to trading? One of the most common scenarios involves a beginner winning big because they get lucky, then they lose everything and try to win it back. The amateur trader then continues to lose more and more as they try to dig themselves out of the hole they have created, rather than knowing when to walk away. Someone that is addicted goes through financial resources that aren’t meant for trading. By that, we mean that anything you invest in trading should be disposable income. If you’re using grocery or bill money to trade with, it isn’t a good sign.
Borrowing money from others, taking out loans, and selling personal items are other signs that one might be addicted to the rush of trading. People don’t always recognize trading addiction or realize how much it can affect them or their loved ones because it isn’t talked about as often as drug, alcohol, or gambling addictions. Once someone realizes that they have an addiction to trading, they might try to pull themselves out of it on their own. This can lead to disaster.
The best thing to do is to explain your problem to your friends and family so that they can understand how the addiction is affecting you. Those that don’t trade themselves might understand the way you’re feeling and why you’re spending all of your money once you explain this to them face to face. Seeking professional help is your best bet to solving the problem as a professional can help you recognize and overcome the problem.
Professional traders must have self-discipline and they need to be able to sit out when the market isn’t right for trading. Addicted traders need to feel the rush of trading and are more likely to make impulsive decisions, trade at bad times, and wipe out their trading accounts. Once a trader becomes addicted, they need to seek help to keep the problem from affecting their everyday life. This doesn’t mean that you have to give up trading for good, but a professional can help you manage your problem.
For example, you could set aside a certain amount of disposable income for trading from your weekly paycheck and never invest more than that at a time. Or you could mark out certain days of the week where you promise your significant other (or just yourself) that you won’t trade. If you run out of your weekly trading allowance or feel bored on a day where you aren’t supposed to trade, you could read articles and do research to improve your trading education. Or you could trade on a demo account to improve your skills.
Finding healthy alternatives versus investing money and trading constantly will help you to be more in control of your actions. Taking all of these steps can certainly help one to overcome the problems that result from trading addiction.