Stock trading has long been reserved for those Type A personalities who are strong, driven and smart. For many, it’s a win-at-all-cost game which means logging long hours in front of a computer screen, researching and trading stocks. But while a strong work ethic should be applauded, there’s a fine line between working hard and being addicted to trading. And that line can mean the difference between making sound investment decisions and gambling away money. Although it may be hard to identity someone who is addicted to trading —after all they aren’t falling down drunk or calling in sick all the time—some telltale signs can clue you in.
1. Having a Myopic Investment Goal to Make Money
Investing is about making money, but the amount or how quickly you make it will affect your investment decisions. For people who are addicted to trading, the need to make money becomes their sole driving motivation. And because of that myopic vision, they often make risky and costly trading mistakes. Instead of having a sound, long-term investment plan, people addicted to trading make big bets and in essence morph into gamblers.
2. Get a High Off of Big Investment Wins
Everyone likes making money and gets a natural high from it. But for certain people, particularly addicted stock-market traders, it’s not just a natural high, it’s an adrenaline rush. And just like most adrenaline junkies, one time is not going to be an enough. A person with a trading addiction will make bigger and bigger bets to get that rush again and again.
3. Spending Too Many Hours Trading
Online trading has made it easy and cheap for people to trade, but it also makes it simple to get addicted to it. After all, it can be very appealing to roll out of bed, walk across the room and make hundreds of dollars in minutes. But it can also be addicting and consuming. Someone who spends 12 or more hours in front of the screen probably has a problem. Left unchecked, it will likely become an addiction that will end up costing a lot more than a quick hundred bucks.
4. Obsession With Stocks and Investments
It’s okay to be an avid market watcher, but when it becomes the sole focus in your life, chances are an addiction is forming. Most people who are addicted to trading are going to constantly follow their investments out of fear they will miss out. Technology makes it easy to stay on top of stocks in real time 24/7, fueling an investor’s obsession. If you find yourself constantly checking your investments or panicking when you are away from a digital device for too long, it may be a sign you are becoming addicted and should seek help.
5. Hiding Trading Activity
Often it is family and friends who recognize an addiction before the person suffering from it does. Usually they will confront the offender to try to intervene. As a result, the person committing the offense will start sneaking around. If you find yourself hiding your trading activity, lying about what you are doing with your time or otherwise keeping family and friends in the dark, you may have to consider the fact that you have a problem.
6. Ruining Relationships
A telltale sign someone is struggling with an addiction is if he or she ruins close relationships. If someone is spending his whole day trading or thinking about trading, it will be hard to maintain relationships. Often, constant trading leads to neglect, frustration and ultimately the end of relationships. A surefire way to spot an addiction is if the person is seeing the relationships around him implode.
The Bottom Line
Trading can easily morph into gambling if you are not careful. If you have an obsessive personality to begin with, that gambling can easy become an addiction. If you find yourself spending more than 12 hours a day in front of your computer screen or if your need to trade starts running your life and ruining your relationships, it may be time to get help. The sooner you can recognize the signs to trading addiction, the faster you can end the destructive behavior.