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Do You Think Your Addicted To Trading?  

63 members have voted

  1. 1. Do You Think Your Addicted To Trading?

    • Yes
      48
    • No
      15


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If you find that more often than not you are either in a trade, thinking about being a trade, or even “itching” to be in a trade, you are probably addicted to trading the markets. If you find it difficult to remove yourself from your computer after placing a trade or you are staying up until 3 in the morning watching every tick for or against your trade with frazzled nerves, you are probably addicted to trading.

 

How do you stop your addiction to trading?

 

If you are man enough to admit that you are addicted to trading then read on for some tips on how to break free from this addiction, if you want to continue on in denial of your addiction, then it’s better to click off this page now.

Stop trading small time frames

 

When I say “small time frames”, I am talking about any chart time frame below the 1 hour time frame. I personally believe these time frames are too full of random price movement that carries with it very little significance. As a result, I feel that traders who focus primarily on these small time frames end up getting “seduced” into over-trading because they naturally spend more time analyzing and watching the markets as a result of having more (mostly meaningless) price movement to analyze.

 

We humans tend to be good at finding “patterns” in things, or meaning in things that perhaps don’t carry any inherent meaning. Traders are really good at doing this when trading the lower time frames. Also, any trading signal on a 5 minute chart is going to inherently carry with it a lot less weight than that same signal on the 4hr or daily time frame. So, if you want to break your addiction to the charts…stop watching the small time frames all the time, the reality is that it’s only causing you to over-analyze, over-think, and over-trade.

Be accountable

 

People who are addicted to drugs or alcohol lack accountability to themselves, they don’t care about their bodies enough to stay disciplined enough to stay away from substances that harm them. Similarly, traders who gamble their money away and who are addicted to the markets, lack accountability; they are unorganized and undisciplined and so they need something to be accountable to.

 

The best way to inject some accountability into your trading is to develop a Forex trading plan based around an effective trading strategy, as well as a Forex trading journal. Then, you have to force yourself to actually use them; if you can manage to do this you will then have something to be accountable to. When you self-manufacture these tools of accountability in your trading, it helps you stay disciplined and helps to forge positive trading habits in your trading. Traders who gamble and who are addicted to the markets actually reinforce negative trading habits and thus it can be nearly impossible for them to turn their trading around.

 

Understand that NOT trading IS a valuable position

 

Another very important thing to understand that will help you break your addiction to trading is that NOT trading is often the best position to take. Think of it like this, if you are addicted to the markets and are over-trading, you are going to have many more losing trades than you would have if you were disciplined enough to simply not trade when you knew you shouldn’t have. Just to get back to breakeven you have to then hit enough winning trades to make up for all your losers. Whereas, if you simply had traded like a sniper and not a machine gunner, you could have avoided many losing trades and thus had a much more consistent and profitable equity curve.

 

Don’t put pressure on yourself to make money

 

The reason why many traders get addicted to the market is because they put too much pressure on themselves to make money from their trading. This is a very dangerous thing to do. Traders who find success in the markets feel little to no pressure, they don’t put too much significance on any one trade. If you see trading as your “only option” at having a happy life, you are obviously going to become emotional the first time you lose a trade, then that’s going to kick off an avalanche of emotional trading mistakes and trading addiction that will only result in you losing increasing amounts of money. In short, remover your “need” to make money in the markets, and the money you so badly desire will actually come faster.

 

Making sure you don’t “relapse”

 

As any addict knows, relapse is always lurking around the corner, waiting for you like an unavoidable temptation in the night. When you’re a trading addict, the situation is exactly same, and perhaps even more difficult than being addicted to drugs or alcohol, since you are still going to see your temptation (the markets) everyday. You have to consciously be on-guard against falling back into your old ways of being a trading addict. The easiest way to do this is to stay disciplined and organized by thinking about your trading like a business and making a trading plan and trading journal and using them with passion. You also need to keep in mind that you COULD lose money on ANY one trade, so keep that fact in your mind at all times while trading, and ask yourself before every trade if THIS is a trade that a I REALLY want to risk money on, and is THIS amount of money an amount I am TRULY OK with losing?

 

In short, there is no concrete way to avoid slipping back into your old bad habit of trading addiction. But, you can pre-empt all your actions in the market by doing the things I just described, this will greatly increase your chances of avoiding a relapse. Also, you should realize that trading is a life-long event, so don’t get too hung up on any one trade; your trading success is measured over months and years, not over days or weeks. Find other hobbies, don’t get obsessed with the markets, and realize the markets will always be there, so missing out on a good trade setup is not a big thing. By and large, traders who take a slow and controlled approach to trading the markets make a lot more money over their lifetimes than traders who take a fast and emotional approach.

 

Nial Fuller is a respected Forex trader and trading coach. He teaches forex traders to simplify their trading by learning to read the “raw” price action of the market and by trading with simple yet highly logical and effective strategies. If you want to find out more about him and his price action trading methods, check out his Forex Trading website here:

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