Trading stocks has become increasingly popular in recent years. The rise of online trading houses and mobile trading apps has provided instant access to global financial markets, making stock trading more accessible than ever before. As a result, a growing number of people are experiencing negative consequences from trading. As their problems become more entrenched, they may show signs of stock trading addiction – also known as day trading addiction, stock market addiction and pathological trading – which is a type of gambling disorder.
A 2020 report into compulsive gambling in financial markets presented findings from two investor surveys. The studies found that 8% of investors met the criteria for gambling – 4.4% as compulsive gamblers and 3.6% as problem gamblers, a less advanced form of gambling disorder.
Why can stock trading become addictive? For most people who invest in the stock market, trading is something they do either recreationally or professionally without any adverse consequences. They may lose money from time to time, but they have a healthy relationship with trading. However, a minority of people who engage in stock trading are unable to control their financial activities and this risky behavior becomes akin to gambling.
The reason why stock trading can become addictive is connected to the brain. When a trader buys or sells stocks and makes a profit, their brain releases dopamine, a feel-good hormone that’s often described as the brain’s reward system. Over time, the trader’s brain becomes reliant on this type of stimulation, so they engage in more and more trading activity to experience the same level of excitement and satisfaction. Problem gamblers feel the need to continue gambling increasing amounts of money for the same reason.
There are several factors that can make someone more predisposed to stock trading addiction:
- Genetic factors – a history of gambling in the family
- Psychological factors – pre-existing mental health issues such as anxiety or depression
- Social factors – working in the financial industry, or having friends or family who invest in the stock market
- Gender – men are more likely to take risks and have lower levels of impulsive coping than women.
5 Signs of Stock Trading Addiction and What You (or a Loved One) Can Do About it Today
1. Trading is the Main Focus of Your Life
Is stock trading consuming your every waking hour? This could involve reliving past trading triumphs, repeatedly checking stock prices, obsessively researching investment opportunities, waking to monitor foreign financial markets and constantly planning your next trading activities.
2. You Can’t Stop Trading
Do you want to reduce the time you spend trading – or stop altogether – but feel unable to do so? You may be buying and selling more and more stocks to feel the same rush of adrenalin. Perhaps you are starting to take increased risks without much strategy or chasing losses in an attempt to get even after losing money.
3. You Lack Interest in Everything Else
Have you stopped taking part in social activities and leisure pursuits you once enjoyed to concentrate on stock trading? It’s likely that your family and friends feel abandoned and neglected which can lead to strained relationships. You may even lie to them to hide the extent of your trading activity or steal money to fund your investments. Your education or career is also likely to suffer from your single-minded focus on all things trading related.
4. Your Mental Health is Suffering
Do you feel stressed, anxious, depressed, frustrated, irritable, aggressive or restless when not trading? If you have attempted to cut down or stop investing in stocks, these unwanted feelings are common withdrawal symptoms. If your emotional state is directly linked to the performance of the stock market, this is a cause for concern.
5. You Continue to Trade Despite Negative Consequences
If you trade compulsively – or have the uncontrollable urge to engage in trading-related activities – despite negative consequences to your finances, relationships, physical health and emotional well-being, it’s a clear sign that you have unhealthy trading habits.
A 2016 study, ‘Is Pathological Trading an Overlooked Form of Addiction?’ outlines 10 criteria for pathological trading and suggests that you are likely to be trading problematically if you have experienced five or more symptoms in a 12-month period.
How to Avoid Becoming Addicted to Stock Trading
Here are some of the ways you can keep your trading activities safe and healthy:
- Remove some or all trading apps from your phone
- Avoid trading more than you can afford
- Establish your risk tolerance
- Keep to your budget
- Use a time tracker to limit your activity
- Don’t chase losses
Take an Assessment
If you – or a friend or family member – are displaying one or more of the warning signs above, we recommend taking one (or all) of our online mental health assessments. Within the portal is a gambling addiction test. The latter helps traders (gamblers, in a sense) understand more about the impact that stock trading is having on their lives. It will help you too.
Please note that the online test is not a diagnostic tool, but it can be a valuable first step towards recognizing there’s a problem and seeking support. People with stock trading addiction often put off getting help because they think the negative effects of their trading activity are not serious enough to require counseling.
Get Help for Stock Trading Addiction
When you, or someone you care about, are ready to seek support for your stock trading addiction, we are here to help.
At Kindbridge, we provide online counselling services so you can access high-quality therapy tailored to your needs in the comfort of your home. We are specialists in treating gambling disorder and will use the most suitable modalities to help you reduce the urge to trade, cope with triggers and break your unhealthy patterns of behavior. We believe that treating stock trading addiction is not only about dealing with your compulsive behavior, but also supporting your overall mental health and well-being.
Book a free 15-minute consultation today to discuss how we can help you regain control of your life.