Do the symptoms of a Forex trading addiction sound familiar to you? Your hands are sweating, your pulse is racing, and your mind is consumed. Before you even know it you have clicked the mouse and placed a trade and you don’t even know why.
Time and again you compulsively click until at some point you step back and realize you have just lost an enormous amount of money by placing one order after another. It’s like you were in a cloud and completely out of touch with the reality, that you really were gambling more than trading.
You didn’t place a trade because you saw a clear setup or had waited patiently for your trading strategy to come to fruition. You were running on pure emotion; pure adrenaline; pure addiction.
The ability for the average person to turn on a computer, access the internet, and with just a few hundred dollars place a series of market orders and become financially independent is mind blowing. We are blessed to live in an age where technology can allow us the freedoms and opportunities that just a few short years ago were not available.
The huge downside is that, before people had these opportunities at their hands, in order to trade the markets, they would have to be part of an actual organization of professionals. Traders would have had either a formal education or would have been taught how to trade along with all the ups and downs that may come with the business.
Newton’s third law of motion asserts that “for every action, there is an equal and opposite reaction.” There cannot be vast, unrealized opportunities within Forex without there also being some real consequences when improperly participated in.
There is a high that one can get from trading. We all have a greedy being that lives deep within us, and no matter how good of a person we are when we see a legitimate open-ended chance to make a lot of money we become like Pavlov’s dog drooling at the sound of the opening bell.
The reality is, most traders will bottom out of the market and eventually give up trying, not because they don’t have the ability, or can’t learn a profitable trading system, but because they cannot control their emotions.
How Alcoholics Anonymous Can Help You Trade Better
Investing in the market is so much more than financial. Learning from those who have gone before us can be a wise thing to do.
Alcoholics Anonymous has lessons that traders can adapt, and successfully apply to trade better. Don’t be deceived into to thinking that trading is just a mechanical, methodological activity. It will never be as long as emotional beings are the interpreters and decision makers for the trades.
Although being in addiction is actually not pleasant, typically the action that leads to addiction holds some sort of positive stimulation, which is why there is such a craving for more. Making money with the click of a mouse is one of the most pleasurable things anyone could experience.
When a trade is placed there is an internal reaction that is an anxiety, or anticipation of how the trade will turn out. When that happens, there are actual chemicals released in the brain that results in a really good feeling.
Like when your favorite sports team comes from behind with a winning goal or your kid does something remarkable and you are filled with pride and love. That chemical reaction is like an electric signal going from one part of the brain to the other. When this happens repetitively, it can form a pathway, and alter your neurological makeup in a more permanent manner.
It is like when you walk through a field in the same pattern over and over. At first, the grass will get trampled, but enough times and the grass will actually stop growing there and it will result in a permanent pathway.
Addiction starts with suppression but can lead to a lasting problem. Alcoholics Anonymous gives 12 steps to helping deal with addiction after it has become an issue.
Drinkers aren’t the only people that can hit rock bottom – traders can too. They empty accounts and spend money they can’t afford to lose. Their need to trade can keep them tied to a computer, affect their work, or even their relationships. An addiction to Forex trading can be ugly.
By adapting some of the 12 steps from Alcoholics Anonymous, traders can avoid addiction and experience success. Below are a few of the steps that are most relevant to trading:
Step 1: Admit that you are powerless over the markets (alcohol). The market is a living thing, and though it may be cyclic, it is not predictable. To believe you have control over it is honestly delusional and will mislead you into bad trades.
The best you can do is take advantage of a good trading plan that has a profitable probability model that can give you an edge over time. No one knows exactly what the market is going to do at any particular time.
Step 4: Make a “searching and fearless inventory of yourself.” As a trader, you need to know what makes you tick. Not just your trading style, but how you react to stress, loss, or situations you will never be able to control. What personal baggage do you have that will affect your trading success?
Step 7: Humbly ask [higher power] to remove your shortcomings. Okay, you may not, personally, seek the help of a higher power, but you will have to be able to accept the things you are not good at. As a successful trader, you must strive to eliminate your weaknesses, and play off of your strengths.
There are hundreds of ways to trade, and you have to learn that there will be some trading strategies you will not be good at. You may never be good at trading news, or catching break outs, but you can make just as much money using pivot points. It is like the Serenity Prayer:
“Change the things you can change, and accept the things you can’t.”
If you are going to trade the markets you are going to encounter stress. The amazing thing is, if you can learn to be self-aware, find techniques for dealing with the stress and the possible pitfalls, you not only have a better chance of succeeding in trading but those lessons will translate to you being successful in life as well. Learn to control your emotions and the stress created by them, and you will never have to worry about trading Forex as an addiction.