Could Futures, Currency Exchange Or Scrips Be Actually Addictive?

Real obsessions are a very grave matter and while trading doesn’t involve the consumption of any substances, there are the ones that accept that trading is actually addictive. The incredible emotional rushes that most traders experience both before placing a trade and while in the middle of a giant winner or enormous loser are a recognized part of trading, but are traders actually becoming dependent on trading?

Is there a need for help for traders with Forex broker, or is the situation one where the high proportion of traders that lose money is just due to them still being in the learning process and suffering the losses as a ordinary part of “paying your dues”? In this piece we are going to research the problem and determine if there’s satisfactory evidence to support the hypothesis that trading is indeed addictive.

So what comprises an honest to goodness obsession? There are 2 classes of obsessions, physical dependance and psychological addiction . There is a considerable amount of information on both and certainly beyond the remit of this article, but a short summary follows

So an obsession could be portrayed as someone feeling the “need” to frequently get involved in a particular behaviour to satisfy a wish to have the emotional effects that’s has, the feelings that it produces. It’s a desire that they have rationalized into a need, to which they have surrendered control, and they have authorized the behaviour to progress into a habit. This is physiologically worsened by the endorphins released into the system that provide a physical feeling effect also. Let’s look at some of the mandatory practices ( behaviours ) of trading to achieve consistent profits and some of the behaviours exhibited by many traders and see if they fit the above.

One recognized vital practice for profit-making trading is good risk administration. At the heart if this is ensuring that the risks you take are measured and worked out risks. You need to keep your losses tiny when they occur and avoid them all together when possible ( like not getting into bad trades ). Key tools typically utilised for controlling likely losses include risk / reward calculations and stop loss orders. Risk / reward calculations are required on each trade so that you know whether each Forex trade is a sound business call. Stops are used so that then a good trade is placed but the market doesn’t do what you’d expected. With the leverage in trading that may work for or against you, risk administration is essential.

General cash management is another vital practice to be sure that your trading business will still have the doors open months and years from now. It includes risk control but the focus is on a bigger scale and a broader scope, such as taking a look at what proportion of your available capital you are placing on any specific trade, with no regard for the details of the specific trade.

These practices may appeal to the intellect, but how they feel is where traders get into trouble. There are many usual mistakes frequently manufactured by traders that bring giant losses, missed profits, and ruin for most. These errors run in direct conflict with the known and established good practices for consistent and profitable trading, yet are made repeatedly again by the same traders. Since they are repeated, it might be reasonable to say that they became habits. Let’s inspect these habits from the perspective of the emotional reaction for the individual person.