Trading, like any other activity, can be addictive. Addiction starts innocently. Nevertheless, when you attain the point where you continuously pursue a particular activity without considering the adverse effects of your actions on yourself and those around you, it becomes an addiction, especially when the negative effects outweigh the positive impact.
Trading addiction is a pathological obsession and an unrestrained craving to trade without considering the damaging effect of the trading on you while lacking the ability to stop despite the negative consequences.
Addiction is different from passion; the difference is typically when a person becomes entirely dependent on the activity, with no concern for the world outside training.
Individuals that are addicted to trading lose sleep, lose appetite, lose money, lose family, and still keep going because they believe that they cannot stop or have an unfounded hope of hitting it big.
How to Know You Are Addicted to Trading?
Trading is exciting, stimulating, and promising, irrespective of the losses; the fact is that a good number of people have made big bucks from the market. Nevertheless, trading without boundaries or limit can become addictive.
Too much of everything is not good; this also applies in trading. Addiction is inevitable when trading is not regulated. It is okay to like and invest yourself in trading – it is business, so why not. However, when you don’t take control of the activities and you let take the urge to make money take over, you might be on the verge of addiction.
Trading addiction has a high adverse effect on various areas of your life. It takes away the good sense of reasoning and leaves impulse to be the determiner of your action. It can cause severe damage to all areas of your life and affects your response to the real world.
Addiction to trading, just like other addictions, doesn’t begin in a day. Instead, it is a gradual process of losing control and unhealthy desires that births it. The following are some of the ways you know that you are addicted to trading and its effect:
- When you spend so much time trading and disregarding your friends, family, job, or yourself. You damage your relationships by spending less time with your friends and family, borrowing money from them, and acting frustrated and cranky around them.
- When your life is centered on trading without considering anything else, the effect is that you damage your career because you are less involved in your full-time job.
- When you start to invest large sums of money, more than you can afford to lose, in trading. You damage your confidence by feeling like a loser when you keep on losing money.
- When you don’t care about physical health or personal hygiene, the effect is that you damage your health, resulting in a disordered lifestyle.
- When you start to borrow money or use credit cards to trade what you don’t have yet, the effect is that you damage your finances.
How to Prevent Trading Addiction?
1. Keep A Journal for Your Trade
Journal keeping is crucial, especially in an activity such as trading when there is a chance of addiction. It helps you keep track of what you intend to trade, your ideas, actions, and thoughts. In addition, it enables you to set a boundary over your daily trade and serves as a check on your daily trading.
2. Take A Break
Taking a trade break is significant because sitting on the trade for long hours can lead to accumulated stress. Instead, stand up from your trading desk at intervals and treat yourself to lunch. You can take a break by celebrating your small win, even if it is a cup of coffee. It helps to reduce stress.
3. Accept Losses
As a trader, it is crucial to note that you cannot always record wins. One central addiction-inducing mentality among traders is the no-loss-all-profit mentality. Although having a positive outlook toward your trade is good, accepting that losses happen and preparing for them is essential. Avoid recovering lost trade because it makes you invest and lose more.
Accept that you do not control the markets and that the only person you can control is yourself. Therefore, the best way to constantly be a lucrative trader is to trade only when there is an opportunity.
4. Know Your Limit
Most traders trade without setting their trade limit. Trading addiction can be avoided by placing a trade limit. Set a maximum trading loss on your account to help you exercise control over your trading.
Prioritize capital retainment over profit making. It implies that you should avoid losing your capital and exercise discipline by setting your trading limit to prevent self-destruction. Over-trading is dangerous because it can drain you of all your money. Therefore, always pre-determine your daily trades and stop losses.
How to Stop Trading Addiction?
1. Admit That You Have Issues
The first step to stopping trade addiction is admitting that there is a problem. Denial prevents the process: if you fail to identify the presence of a problem, then you will not know there is a need for a solution. Instead, admit to yourself that you are indeed addicted, that the present situation does not accurately represent a healthy trader, and that you need help.
2. Analyze Your Present Situation
The next step out of trading addiction is to analyze your present situation. First, write out the extent of your losses, both in cash and kind. Next, identify why you desire to trade in the first instance and why you should continue to trade. Be brutally honest, and never hesitate to admit the truth. It is a step towards getting better.
Analyzing your situation helps you know where you have made the mistakes, how to correct them, and how to avoid them.
3. Take Responsibility
After admitting that you have issues and analyzing your situation, take responsibility for them. Avoid blaming others. Taking responsibility will not make you a loser, but someone who has made a mistake like everyone and is working towards getting better.
4. Distance Yourself from Trading Activities
The next thing is to distance yourself from trading activities. Take a break and avoid any trading activities. You cannot desire to break the chain of addiction and still stay close to the subject of addiction.
5. Ask for Help When Necessary
Seeking help does not mean you lack courage or are less of a trader. Instead, it is the most incredible show of strength because it shows your vulnerable state to another. Request help from a trusted and capable person(s).
Find someone to confide in, join a support group, and listen to the experiences of others that have gone through that phase and have come out stronger. It will help you heal faster because you are walking in the path they have tread.
6. Meet an Addiction Specialist
If you have tried to work with all the above steps and still feel you need help stopping your trading addiction, it is recommended to visit an addiction specialist.
Trading addictions are not incurable because they can be prevented or cured with the requisite help and determination, as the case may be. Therefore, endeavor to try as many steps as possible to be free from trading addiction.
Never hesitate to ask for help whenever you discover you are tilting toward trading addiction. Being open and sincere towards the recovery process and getting back on the right track is guaranteed.
Do you think you’re addicted and need a trading mentor to discuss with? Contact me today, and be sure I’ll be willing to help.