How to avoid addiction to trading?
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Trading is an investment activity that can lead to dependence on trading, with all the risks that this entails. The important thing is that you keep control of your actions and that you remain in control of your trading. To do this, you need to set some very simple rules.
Trading is an activity that gives novice traders (and even some more experienced traders) strong emotions. These emotions are linked to the fact that trading is an activity where there is money at stake.
You should not underestimate the power that money can have over you. Some studies have shown that money provides more intense emotions than sex. I don't know if you've ever been lucky enough to win a large amount of money at a gambling event (casino, scratch card, sports betting, etc.) but it does provide a powerful emotional boost.
Among novice traders, we find this same type of emotion during the first winning trades (a phenomenon that is accentuated by abusive use of leverage). A novice trader is also under stress for the duration of a trade. As a result, he associates winning with reward. Trading then gives him pleasure and he doesn't want it to stop.
This perpetual desire to trade is also motivated by the lure of profit. Novice traders don't even have a profit target, what they want is to win. The lure of profit is then mixed with the desire to beat the market, to satisfy egos.
Trading addiction is what drives a losing trader to constantly deposit more money after razing his trading account. It is also what pushes winning traders into not taking their profits. Trading becomes a need rather than an investment activity.
It's a bit like the grandmas you see at slot machines in casinos. They can win mini jackpots and triple their down payment so they will never stop. Their goal is not even to win money any more, but to satisfy their gambling addiction.
Trading is not considered by law as a gambling activity, but as an investment activity. The problem is that for almost all novice traders, trading is perceived as a gambling activity. You must be aware of this to avoid losing your savings.
Before you start trading, set yourself an amount that you should never exceed, for example 10% of your savings. If you get to that number, you definitely stop trading!
This is a constant problem for all novice traders. Not being in position is seen as a waste of time and therefore a waste of money. It is better to see it as a way not to lose any! For some people there is a real need to be in the market. This leads to impulsive trades.
You should not believe that your performance is based on the number of trades you place. When you are a novice, it is often the opposite effect that occurs. The more positions you open, the greater your risk.
A position is always opened on a bullish/bearish signal from your trading strategy, that's all! If you don’t have a signal, don’t open a position. Trading leaves no room for feeling. Following a very precise trading plan which gives strict rules for entering and exiting positions is required.
Not opening a position is still taking a position! It means recognizing that the market is undecided, that you don't know where it will go. You must be patient and wait for the right opportunity. Sometimes your strategy might not give you any signals for long periods of time. In that case, go and do something else but don't place any trades just to occupy yourself. This is the best way to lose your capital!
Trading that earns money does not leave room for impulsive trades. You must be able to control yourself.
The need to be in position can also come from your addiction to trading. Some people need their adrenaline dose like a junkie needs a shot.
Before opening a position, ask yourself what justifies this trade. If it is not your trading strategy then there is a problem! In that case, stop it! Don't do any more trading for a long time.
The performance of a trading account has absolutely nothing to do with the time you spend trading. This is a misconception about trading. Quite often, it is even the opposite, excessive trading leads to heavy losses and even to the total loss of capital.
You must set yourself a precise trading schedule. Trading requires a high degree of concentration. It is physically exhausting and psychologically draining. An experienced trader has the ability to concentrate on charts for several hours, phasing out all external stimulus. A novice trader is not capable of this. It is essential that he takes time for a break.
Too much trading time pushes a novice trader into making bad decisions and letting himself be overwhelmed by emotions. Because yes, staying fixed looking at charts for hours can drive you crazy.
Either you set yourself restricted trading hours, for example, trading only 2 hours a day between 7pm and 9pm, or you regularly allow yourself long breaks.
It is important to be able to take a break from time to time to recharge your batteries. When I talk about a break, I mean both a break during the day and a break between two trading sessions. Clear the air and think of something else for a few days or a week, it feels good. It allows you to take stock of your trading.
You should not see your break times as a time when you are missing opportunities. Never be frustrated in trading. There will always be opportunities, whatever the time of day. Do not trade during the hours dedicated to another job, if you have one. Wait until you get home, with a rested mind to start trading. If you feel tired, do not force yourself to trade. Missing a day, a week or even a month of trading is no big deal. The important thing is to trade when you are in good physical and mental condition.
Addiction to trading
Trading is an activity that gives novice traders (and even some more experienced traders) strong emotions. These emotions are linked to the fact that trading is an activity where there is money at stake.
You should not underestimate the power that money can have over you. Some studies have shown that money provides more intense emotions than sex. I don't know if you've ever been lucky enough to win a large amount of money at a gambling event (casino, scratch card, sports betting, etc.) but it does provide a powerful emotional boost.
Among novice traders, we find this same type of emotion during the first winning trades (a phenomenon that is accentuated by abusive use of leverage). A novice trader is also under stress for the duration of a trade. As a result, he associates winning with reward. Trading then gives him pleasure and he doesn't want it to stop.
This perpetual desire to trade is also motivated by the lure of profit. Novice traders don't even have a profit target, what they want is to win. The lure of profit is then mixed with the desire to beat the market, to satisfy egos.
Trading addiction is what drives a losing trader to constantly deposit more money after razing his trading account. It is also what pushes winning traders into not taking their profits. Trading becomes a need rather than an investment activity.
It's a bit like the grandmas you see at slot machines in casinos. They can win mini jackpots and triple their down payment so they will never stop. Their goal is not even to win money any more, but to satisfy their gambling addiction.
Trading is not considered by law as a gambling activity, but as an investment activity. The problem is that for almost all novice traders, trading is perceived as a gambling activity. You must be aware of this to avoid losing your savings.
Before you start trading, set yourself an amount that you should never exceed, for example 10% of your savings. If you get to that number, you definitely stop trading!
The need to be in position
This is a constant problem for all novice traders. Not being in position is seen as a waste of time and therefore a waste of money. It is better to see it as a way not to lose any! For some people there is a real need to be in the market. This leads to impulsive trades.
You should not believe that your performance is based on the number of trades you place. When you are a novice, it is often the opposite effect that occurs. The more positions you open, the greater your risk.
A position is always opened on a bullish/bearish signal from your trading strategy, that's all! If you don’t have a signal, don’t open a position. Trading leaves no room for feeling. Following a very precise trading plan which gives strict rules for entering and exiting positions is required.
Not opening a position is still taking a position! It means recognizing that the market is undecided, that you don't know where it will go. You must be patient and wait for the right opportunity. Sometimes your strategy might not give you any signals for long periods of time. In that case, go and do something else but don't place any trades just to occupy yourself. This is the best way to lose your capital!
Trading that earns money does not leave room for impulsive trades. You must be able to control yourself.
The need to be in position can also come from your addiction to trading. Some people need their adrenaline dose like a junkie needs a shot.
Before opening a position, ask yourself what justifies this trade. If it is not your trading strategy then there is a problem! In that case, stop it! Don't do any more trading for a long time.
Trading less to trade better
The performance of a trading account has absolutely nothing to do with the time you spend trading. This is a misconception about trading. Quite often, it is even the opposite, excessive trading leads to heavy losses and even to the total loss of capital.
You must set yourself a precise trading schedule. Trading requires a high degree of concentration. It is physically exhausting and psychologically draining. An experienced trader has the ability to concentrate on charts for several hours, phasing out all external stimulus. A novice trader is not capable of this. It is essential that he takes time for a break.
Too much trading time pushes a novice trader into making bad decisions and letting himself be overwhelmed by emotions. Because yes, staying fixed looking at charts for hours can drive you crazy.
Either you set yourself restricted trading hours, for example, trading only 2 hours a day between 7pm and 9pm, or you regularly allow yourself long breaks.
It is important to be able to take a break from time to time to recharge your batteries. When I talk about a break, I mean both a break during the day and a break between two trading sessions. Clear the air and think of something else for a few days or a week, it feels good. It allows you to take stock of your trading.
You should not see your break times as a time when you are missing opportunities. Never be frustrated in trading. There will always be opportunities, whatever the time of day. Do not trade during the hours dedicated to another job, if you have one. Wait until you get home, with a rested mind to start trading. If you feel tired, do not force yourself to trade. Missing a day, a week or even a month of trading is no big deal. The important thing is to trade when you are in good physical and mental condition.
