- people blow out accounts all the time, some borrow to continue with borrowed and stolen funds.
- at least 3 major movies show trader out of control leveraging up billion $ losses
- good traders can't stop
The following user says Thank You to paco for this post:
In my opinion, all trading consists of is the ability to put on sound trades based on deciphering cues the market gives as oppose from ones your own emotions, psychology, mood, or whatever you want to call it, is giving you.
Addiction to over-trading is usually a form of gambling if the trader isn't using any feedback from their trades. The trader is basically chasing the dragon. They're chasing the dopamine rush they get when putting a trade on. This is the same rush a gambler gets when they roll the dice or pull the slot machine lever. It's very important as a trader to be able to control these urges and know when their decisions are based upon them sound reasoning or their own feelings. Increasing the trading size after a series of positive trades for no reason other than having more to risk is just as detrimental as continuing to trade after a series of losses.
What I'd suggest is keep a journal and have some way of tracking your mood and reasons going into a trade. If you continue to trade without good reason it's usually because you're trades are going undocumented and your actions are going unchecked.
Last edited by Itchymoku; March 17th, 2015 at 10:31 PM.
The following 3 users say Thank You to Itchymoku for this post:
I like Dr. Elder's line here. "A good trader is like a cold, card-counting poker player. Making money game after game by folding most rounds and acting when he sees an opportunity." You wouldn't call the card counter the gambler, would you? At least not compared to someone who keeps feeding the slot machine and pulling the handle, indifferent to the odds and addicted to the chance?
The following 2 users say Thank You to DrewDown for this post:
Very much agree. There is a narrow line line between gambling and "counting cards" in trading and this is one of it's primary dangers for newbies. Nature of the markets makes the boundary between randomly picking trades and having an edge very blurred.
Many people spend years of their life and their savings trying to beat the randomness, being fooled by random streaks.
The following 2 users say Thank You to Cornix for this post:
I think you have to be able to turn it off once in a while. I mean get away and not think about it. 20 years ago I used to be addicted to betting on the horses. I would stand outside in the snow waiting for the daily racing form to be delivered to the newsstand and I think I would get a twitch if I couldn't get the racing form early enough. The markets are there to trade Sunday night until Friday afternoon, plenty of time for action.
When you start neglecting important people and things in your life over trading, you might be addicted. As for me I tend to find solace in the market. Its my zen place. My happy place. The kids could be drawing on the walls with permanent marker but if I am trading, I don't care, do whatever I will deal with them when I am done. If I am watching tv and they do it that's another story. Once the market is shut, then I try to live a normal life.