Sure, many traders never even heard that word, although repeatedly experienced at least part of the emotions that professional psychologists are summarized by this term. Gambling addiction of professional players involves gambling haphazard transactions until loss of control over himself. The game is under the influence of such emotions is reduced to uncontrolled behavior, hoping to win by chance. Gambling is accompanied by:
overwhelming desire to continue to bet (risk, seek to recoup);
strong emotions, bordering on the background of signs of hysteria, rapid change of mood from euphoria to crying;
intoxicating joy and a sense of guilt, despair etc.
No matter whether a trader succeeded in stock trading or lost the deposit (gambling addiction is most relevant to trading), there is nothing good for traders it promises.
Gambling addiction — how to pull yourself together
The causes of gambling addiction:
easy profit. The reception, which is often used by traders, luring new customers. Trader, working with kitchen (by the clearing system, of those about 80% of brokers) that receives profit from the first trades then wakes up the euphoria. Trader increases the deposit, starts taking less meaningful action… and there is a rapid loss. The situation is familiar to professional traders as well – as a major success relaxes. And it is not about any fraud from the broker side;
all-in bet. If the trader has something to lose, he will be trying to recoup in the hope that luck still will smile;
a special psychological state. The trader with “neurotic” type is not able to cope with the irresistible unconscious urge to gamble.
The most frequently used strategy at the gambling-addicted — Martingale in its purest form. A manifestation of gambling — lack of strategy and understanding of the market.
The consequences of gambling addiction:
emotional exultation, if the game is in favor of the trader. However, in this condition trader can immediately lose all earnings;
pessimism, sadness, stress, up to apathy and complete loss of desire to live in case of a loss;
inevitable loss of deposit.
Haphazard trade for “luck” in fact can not be profitable. Most often, the gambling addiction can be found in binary options. Those who poorly understand the principle of forecast, take binary options for the roulette probability of winning of 50/50, and making a forecast of the trend direction on luck, ignoring the theory of probability.
How to avoid (cure) gambling addiction:
invest in trade only the money that you are willing to part painlessly. Then the loss will not be perceived painfully;
pre-set limitations. First, close the position immediately after the achievement of a goal. Do not rely on the fact that the price of “just becomes a little bit higher, and then I will close”. Instant turn will lead to the loss. Second, set a stop-loss. The phrase “Yes, the price temporarily drops, it’s gonna turn around, you only need to wait” should be excluded. Close losing positions;
develop a strategy of risk management in advance — the lot size, stop loss length etc.;
all high-risk strategy (averaging or martingale) are used only in conjunction with other indicators and not in full (e.g., the lot is increased by 50% and only 3 times in a row);
if still the trade is in loss after 3-5 losing trades take a break or go to another strategy (asset). It is important to limit the number of losing trades;
for each transaction accept the risk of loss of deposit 2-3%.
Despite the fact that the nature of gambling addiction lies in the nature of man, strength of character and logic to eliminate its impact on trade. Do not open the position, if you do not understand the principle of operation of the instrument and market conditions, be able to stop as soon as a loss reaches 10-15% of the deposit, accept the loss in advance. And remember, profit is the natural result of your work. No need to be euphoric, believing that “you were lucky”. The profit is a payment for your knowledge, time and experience.