Stock trading draws Type A personalities who are driven to win at all costs. Succeeding means logging long hours in front of a computer screen, researching and trading stocks. But in stock trading, there's a fine line between working hard and feeding an addiction. That line can mean the difference between making sound investment decisions and gambling your money away.
It may seem difficult to identify someone who is addicted to trading. After all, they aren’t falling down drunk and their pupils don't look like pinpoints.
But there are telltale signs. Here's how to tell if you or someone you love is a stock market junkie. If any of these apply, consider it a wake-up call and, if necessary, seek professional help.
1. You're Hitting the Slots
Smart traders are strategic. They follow a sound, long-term investment plan. Yes, the goal is to make as much money as possible, but your laptop is not a slot machine. People who are addicted to trading get so wrapped up in the chase for an instant payoff that they make risky and costly trading mistakes. They morph into gamblers.
2. You Need the High
It's the nature of addiction. The dose has to get bigger and bigger every time to get the same high. Every stock trader gets a natural adrenaline rush from a win. But the addicts among them have to make bigger and bigger bets and higher and higher risks to keep the same rush coming. It doesn't end well.
3. You Can't Stop Trading
Online trading has made it easy, cheap, and convenient, and that makes it easier to get addicted. Someone who spends 12 or more hours a day in front of the screen probably has a problem, whether that person is playing video games or the stock market. For starters, that person has lost touch with the real world.
4. You Can't Stop Looking
All stock traders are avid market watchers, but some can't tear themselves away from it. People who are addicted to trading constantly follow the market action, fearful of missing out on a trade. Today's technology makes it possible to do that in real-time, 24/7. If you find yourself constantly checking your investments or panicking when you're away from a digital device for a short while, you may need to broaden your interests in life.
5. You're Trading in Secret
Addicts tend to be secretive because they know they have a problem. If you find yourself lying about what you are doing with your time or otherwise hiding your trading activity from family and friends, you have to consider the fact that you have an addiction.
6. You're Ruining Relationships
An imploding relationship can be a sure sign of an addiction that has gotten out of control. Maintaining human relationships isn't easy for someone whose waking hours are spent either trading or thinking about trading. If you look up from your stock screener and discover that you're alone, you need to consider what you're doing wrong.