Are you wondering why people get so hooked on day trading? There are several reasons, including high-stakes and adrenaline rush. Similarly to gamblers, day traders have a tendency to trade for excitement and social proof. The high of dramatic price fluctuations can trigger the same hormonal and emotional responses as gambling does. As a result, many people fall into the trap of becoming addicted to the rush.
First of all, many people who gamble in the market do so for the adrenaline rush and the must-win attitude. This type of trader is highly unlikely to be successful over a long period of time, because their trading decisions are made based on emotion and impulse, not a systematic system. Therefore, there is no way to gauge how successful an individual will be in the market over a series of trades.
If you suspect that you may be developing an addiction to day trading, you should seek help. There are several organizations available to assist people who have fallen victim to this type of gambling. For instance, you can seek help from Algamus Gambling Treatment Services, founded in 1992 by Rick Dawson, an Internationally Certified Gambling Counselor and a Canadian Problem Gambling Counselor. Rick and Algamus were featured on the first episode of the popular TV show Intervention.
Investing in stocks has been linked to gambling and has been associated with the development of a variety of mental health problems, including gambling and indebtedness. Additionally, the influx of working from home has led to an increased number of individuals seeking treatment for these gambling problems. Furthermore, the stock market is also linked to the COVID-19 pandemic, which has caused a rise in the number of cases of gambling disorders among day traders.
Another common misconception about day trading is the risk involved. Unlike gambling, day trading carries a high degree of risk and isn’t a long-term investment vehicle. This type of investment is high-risk, so you should only consider it if you are able to handle the risks. After all, gambling is about making money fast, but day trading is a different story. The risk-reward ratio is high, which means you’ll be generating cash flow rather than creating a long-term investment vehicle.
Despite the risk, day trading can be addictive. Just like gambling, it releases feel-good neurochemicals and activates the reward system in the brain. In time, your brain becomes conditioned to seek this stimulation and trade for thrills. In the end, it can take months or even years to reverse the damage done to your brain. Hence, it’s vital that you find a way to stop the urge to gamble and become a successful trader.
As a rule, traders should always maintain a 2:1 risk-reward ratio, aiming to make a profit on each trade. Never trade out of excitement or a desire to make fast money. Successful day traders make huge profits, but most of the time, they’re not profitable. As a result, day trading is a high-risk, high-reward investment, and it’s important to remember that the market doesn’t care if you’re a novice or a professional.