TOTW Are you addicted to trading?

For this week's TOTW, we tackle a side of trading that is rarely discussed: addiction. When your trading gets out of control and can cost you your job, relationships and life savings.

Are you addicted to trading?

Even if you don't consider yourself a trading addict, are you worried about the dangers of addiction? Do you think the industry has a bigger responsibility to make traders aware of it and provide support for those in need?

A wikipedia article on internet addition, cites as a related disorder: stock trading addiction

According to Brian Bloch during his trading addiction study in July 2013, online stock trading is one activity, just like online gambling that gives a participant an addictive rush. Online stock trading has an environment that is vulnerable to encouraging addiction. Problem traders have ownership towards when and how they trade stocks and distribute their money. There are no second parties, bosses or schedules so the problem trader could automatically feel empowered. Because it is on the internet, when stock trading, the trader's are able to feel as though they are in their own world and etch out reality. Bloch explains that it is quite common for problem traders to experience "beginners luck" when stock trading, but as they continue based off the initial rush, they begin to lose money. After the loss of money, problem traders begin a cycle of trying to win back their losses which results in an immense financial loss and even bankruptcy. Your brain produces dopamine when responding to an exciting experience, kind of like your brain is giving your body a reward. By releasing this chemical that gives a pleasurable effect, it is subconsciously teaching the brain that the activity that caused the reaction is positive, and should be repeated. So those who trade stock get a rush when successful and have an "obsessive desire" to repeat the pleasure.

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Despite the general lack of discussion on the topic, there are a few articles worth reading:

The Downward Spiral Of Trading Addiction
When Trading Gets Out of Control
Addictive Trading: Getting Your Life Back
Addicted to trading: When online investors become gamblers/

Last week's TOTW: What are the trading rules you live by?

excellent post and ill comment later.

itspossible said:

excellent post and ill comment later.

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Hi IP

just noticed your new strapline -

my biggest regret? Not having loads of kids, living in council houses, being long term unemployed, feigning disability, having a wife who's obese & unemployed, having a drink & drug habit smoking 50 fags a day, then the State would have took care of everything & I'd never have to worry about a pension

Lol - thats fine - but I dont think you would have to worry about a pension then any way - without help of the state

You would probably not be alive after 48 -50 yrs old anyway

With regards to addiction and trading - yes will comment on this one later on as good topic

Regards

F

Not yet, but I'm working on it... Too many other things going on to get really absorbed, but I reckon it would have me.

Addicted is probably slightly too strong a word, but I'll admit trying to shoe horn trading into any snippet of free time. I consider trading time to cover research , news and candle watching so reading news and eyballing charts on my phone has become a default free time occupation (to the annoyance of my better half). Time is important so I'll also admit to taking and watching positions while in work which I expect is against acceptable behaviour, but given a busy lifestyle it's a good time to trade...

What's a "safe" level of trading ? And what "tells" should we watch for??

Addiction - according to the internet is suppose to effect 40% of people in the Western World.

You know yourself if you have an addictive personality - ie "an extreme form on normality" is how some professors of psychology and neuroscience see it - but many just do not want to admit it or will go out their way to hide it from their family and friends.

I am going to stay with the trading part ( ie a form of gambling) that maybe cannot kill you like being addicted to drugs , alcohol . cigarettes , eating etc - but can certainly ruin your life and end up with other problems such as severe depression - that could even then lead to self harm or even suicide.

When I got into forex trading approx 13 years ago - I had no previous gambling record - yes maybe every year I would have a tenner on the Grand National or if I had a jolly at Royal Ascot etc - and go now and again to a casino after a night out etc - but no betting accounts etc. I could walk away from having a bet - and if I did have one it would be basically with small change.

So I felt safe with learning a new passion / career and had gone over 45 yrs of my life with no other addiction - other than the normal thinking between the age of 17 and 30 that I was addicted to sex - but I think that's totally normal for all healthy males.

I looked upon it that for over 25 years my previous work had occupied between 45 and 80 hrs a week .

If you have approx 168 hrs in a week - allow 50 -60hrs for sleep - 30 hrs a week for leisure/ family /hobbies - at least 10 hrs a week for contemplating - or doing nothing - and then the rest should be working to earn money to make the best of your life.

I reckon even when I was trading the first few years part time - I would still put in at least 20 hrs a week on top of my normal work load - which at that time was less than 45 hrs a week

After I went full time - approx 7 years ago - I said to myself - and my family - I would spend less time trading than I did previously working - so it needed to be under really 50 hrs a week

I can remember in my first year or so full time - I was spending over 50 hrs a week either trading - studying charts - watching DVD's - reading books or internet etc etc

Then I got my routine down to under 40 hrs a week - basically under 8 hours a day - so I knew I was not getting addicted - even if I had a great run of wins etc.

Nowadays - even with my blogging - I probably spend under 6 hrs a day actually trading or looking at charts and in that time blog and then anything from 2 to 5 hours over the weekend - checking out the previous week and trying to learn more.

I think any trader should worry if they spend over 12 hrs a day or even go 2 or 3 days constant with no real sleep etc. - thats not normal.

Under 10 hrs a day - that's no addiction - it just show commitment and passion.

Under 2 hrs a day - your not a trader - you are a part time dreamer ;-)

Only my own view - and I am sure different to many

Regards

F

Addiction is quite a strong word to use, in fact, in a way towards an extreme side.

Am not sure if one needs addiction to lose job, relationship and life savings. A consistent losing trader, who is trying to win, over a length of time can have the same results.

Yet if "trading gets out of control" meaning the trader isn't in control of himself, then, this becomes no different to those who gamble at the casinos.....based on hope. After all, it is the trader/gambler who is placing the bet/£ per point.....but surely, more importantly, no one in their reasonable mind will hope to win consistently over a period of time unless.....
Furthermore, no one in their right mind hopes to lose when they bet/trade.....maybe for the occasional fun or entertainment, for some, there is the thrill! that experience...as per quote "initial rush"

But wait a minute, that thrill/experience is the result of winning.....right? now, seeking that thrill/experience isn't a condition to win, in fact, it is the other way around.
Surely then we must conclude that the objective is to win so we can experience the after effect of the rush/experience. Based on the casino odds, it is chance/luck.
Based on the markets, that depends on the perception of how we all see it or believe it to be.....or something else?

But to trade so one can seek that thrill/experience is more towards emotional satisfaction rather than the true objective of seeking to win consistently.....am not sure those who win consistently seeks for the thrill as their objective.

Addiction appears to be associated with those who have lost their way or even trapped within a level where they themselves cannot get out of.....a situation where they are being controlled rather than being in control.

A mind trap.....exploited by the internet by companies.....not knowing what they are doing.....all for profits!

I think it all depends on how you define addiction. Many people are addicted to sport, collecting items, watching mindless TV and practising numerous other activities very extensively. In some people's opinion this is addiction but many other people regard it as perfectly normal. With respect to trading it's also possible to spend hours and hours beyond what most sane people would regard as reasonable, glued to a screen or analysing figures et cetera – I know this is true because I've done it!

I think you should only class yourself as addicted when you are trading and losing excessive amounts of money and are unable to stop. You could also say addiction is when you are trading and making excessive amounts of money and are also unable to stop – possibly a nice problem to have but look what happened to Jesse Livermore. If you are a competitive or ambitious sort of person then you always have the psychological need to do just that bit better and this can be a good thing because you will push yourself towards the limit of your capabilities. But sometimes the psychology can take over and since trading is I suspect a lone business for most non-professionals then it can be very easy to let it get the better of you.

I counter this tendency by having responsibilities and interests outside trading which demand my attention because other people are involved.

I spend 5-8 hours on trading activity, sometime more hours to spend.
been trade for over 5-6 years already. and it become a primary living expense source.
I do really like to trade, while i keep open minded for any other investment program, for any alternative earning method.
I dont think i'm addicted, but i do trade daily. if thus consider as addiction, doesnt matter, thought i have whole forum members at the same boat as i am.

I have been trading for over 25 years and full time trading for over 10 years. Even after all this time I'm still on the other side of the wall from addiction. I am always nervous about being in trades as I tend to be risk averse, so I only put on trades where I know I have a good edge and I always know where the failure points are for my trades so I don't stay in when the reason for the trade is not there. This may be why I have survived all these years as a trader, I would rather not be in the market but I am when I see good reason to be. I have worked with many traders that felt they had to always be in the market, I think much of this was more of an addiction than anything else, but they didn't tend to last long in the markets. I look at trading as a serious business rather than a game or something to do for fun.

I wouldn't say I'm addicted I'd say that I just love gambling. I always put some money in an account (whether thats a tenner on paddy power or 500 on IG) that I accept I will lose. I don't have the capital to make a living from trading so it's pointless, I just try to get some entertainment from it. When that money has gone I'll walk away and a couple times I've gone 6 months without any form of gambling other than a few lottery tickets. For me, addiction is when you cross the line that you just can't walk away when you want to.

Coming soon: "Are you addicted to Trade2win?"

DRFXTrading said:

More likely to be an addiction if you trade every day.

Like everything nowadays, we are made to believe that things have to be done right away, when we want it or ELSE! Even though we CAN trade everyday, doesnt mean we SHOULD. This misguided belief is what keeps Day Traders on the hamster wheel with little to show for it- and the brokers happy.
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I assume you are using the day trader term loosely because day trading can be just as if not more profitable than swing trading which appears to be your standpoint in your comment.

DRFXTrading said:

More likely to be an addiction if you trade every day.

Like everything nowadays, we are made to believe that things have to be done right away, when we want it or ELSE! Even though we CAN trade everyday, doesnt mean we SHOULD. This misguided belief is what keeps Day Traders on the hamster wheel with little to show for it- and the brokers happy.

If I were running a brokerage house, with operating expenses that need to be met on a daily, weekly basis, wouldnt I need to promote it in such a way that my customers pay me commissions every day as well?- regardless of whether thats the best way for them to make money?

Its like dating- just because a girl WANTS you to call her as soon as possible after you giving you her number, doesnt mean thats the thing you should do either.

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What utter nonsense


So if you go to work everyday - you are addicted to work then ??

I appreciate you might be selling all the advantages of swing trading - and of course the easy life - but to actually say - trading every day means you are addicted to it - and on the hamster wheel - what tosh

I have been a full time FX retail trader for approx 7 years - with approx 5 /6 year beforehand part time. During those 7 years I have easily traded over 170 days per year - counting approx 240 trading days as the most with no holidays or breaks. So over nearly 7 years lets say over 1000 days of trading and so far over 16k of live trades - mainly 10 -20 per day - and I am not even a gambler - and after working for 25+ years at 50 -80 hrs per week think that trading every day is EASY.

Tell me - dont you like work ???

To be good at anything - what ever skill - takes time and devotion - ie over 10k live hours on charts - not back testing etc - that takes years to achieve and even with the amount of experience I have - I still am learning on this journey.

With regards to swing trading being the "bee's knees" well you must be dreaming - and on 4 hr and daily charts whats your average RR's - 2 or 3 ?? I can do that in 30 minutes - Face the facts - multi intraday trading - when you have the knowledge and experience is a far better way of increasing your Capital Account and making money

If you only want to work a couple of hours every day - no problem - but you will never be rich - nor will you learn as quick and more than likely you will end up like 85 -90% of all other swing traders - losers after 1- 3 years

If you do make 5 years plus - then well done - but by then you might be trading a different way rather than the standard - easy - simple dream method.

Not just my view - fact as far as I am concerned - so please take the reality pill and don't try and pull the wool over new and inexperienced traders

Good Trading


F

Never been addicted to trading but was very utterly addicted to leaning and researching trading.
Ironically only to discover that it was not needed to trade.

@itspossible don't forget to add your comments!

For the record my experience was as follows(rough figures only)
2000 minus-5k-Traded shares during the high tech boom .
2001 plus 5.2k-spreadbeting and cfds
2002 & 2003-plus £400
13 dec 2003-Retired from the glorified casino when i was shorting the dow over the weekend of saddams capture.
A massive profit of £600 for 3yrs of trading
account size was 20k at one point
strict stops were always used
On paper it looks like a waste of time but im glad i gained the experience to be honest.
I have the utmost respect for the private trader whether winners or losers.
I enjoy the sidelines now .
Above is from another thread.I would say that i used to be addicted and that the market action affected my life.I should have put more energy into other things to be honest.I was very very lucky and managed to make a little.Due to a large equity drawdown and then recovery i decided to pull out some funds and pay off some of my mortgage to protect myself from losing.The market movements interest me but i realise that its difficult to control emotions and make money.i do not worry about the markets now and just love spending time with my family and tennis.ive got a demo running but i very much doubt ill get back in as i want to protect my savings now and not blow them.

Todays Radio 4 'All in the Mind' is on gambling addiction.
You can hear it on BBC Iplayer at-

http://www.bbc.co.uk/programmes/b04p86c8

So long as one is serious about wanting to trade well... and can manage risk properly, addiction can be a good thing in helping one to stay focused and determined for the many years it will take to become successful at this profession. I suppose the important thing to be careful of is what you expose yourself to in case you become addicted to something that can't benefit you or help you reach a worthwhile goal in the long-run. For some, trading is a kind of spiritual journey in the discovery of oneself. Recognise the good and bad side of so called addiction, impulsiveness, impatience, anger, sadness, pleasure, greed, fear, bias, boredom, confusion, certainty, ego and use them all as a indicators of how you should decide to act before your next trade.

Luc.Chase said:

So long as one is serious about wanting to trade well... and can manage risk properly, addiction can be a good thing in helping one to stay focused and determined for the many years it will take to become successful at this profession. I suppose the important thing to be careful of is what you expose yourself to in case you become addicted to something that can't benefit you or help you reach a worthwhile goal in the long-run. For some, trading is a kind of spiritual journey in the discovery of oneself. Recognise the good and bad side of so called addiction, impulsiveness, impatience, anger, sadness, pleasure, greed, fear, bias, boredom, confusion, certainty, ego and use them all as a indicators of how you should decide to act before your next trade.

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Exactly, I raised similar point in some of my t2w threads, but it's drawn not much attention. What I want to say is that addiction maybe most powerful tool you may use in your trading as it helps you to stay cool even when you take serious losses. Very important for our full of risk sphere of occupation.

If you are addicted to take the trades within your system, rules and risk reward.. addiction is a wonderful thing