Posts filed under “Apprenticed Investor”

Are You a Trading Junkie?

Doc Steenberger addresses a problem we rarely hear discussed: when trading becomes an addictive activity.

I can personally validate the truth of this discussion:  I started out in this business as a trader, and the high you get from the combination of adrenaline and endorphins — and making a great trade — is every bit as much a buzz as any drug you choose to name.

The hardest part about moving to "Research" was pulling the needle out of my arm, and the loss of that sweet, sweet junk every day . . .  (hmmmm, oh yeah, thats the ticket . . . ummm, nice).

Huh? Where was I? Oh, yes.

Anyway, the Doc notes that what is often described as "losses of discipline" can in actuality be revealing of addictive patterns of behavior:

"An addiction occurs when an activity provides a strong source of stimulation that, over time, leads to psychological and sometimes physical dependence. We generally label a behavior as an addiction when people seek out the activity even in the face of demonstrable negative consequences. It is the inability to stop the activity when those consequences interfere with life that marks any addiction.

Let’s look at the facts:

* According to research cited by the National Council on Problem Gambling, 2 million adults (1% of the population) meet the diagnostic criteria for pathological gambling. Another 4-8 million adults (2-4% of the population) can be considered problem gamblers who are experiencing direct problems as a consequence of gambling.

* Research in psychology and psychiatry reported in the Oxford Textbook of Psychopathology finds that between 14 and 16 million Americans meet diagnostic criteria for alcohol abuse or dependence. Between 4-6 million Americans are dependent upon illegal drugs.

* Rates of substance abuse among men ages 18-44 are double those of the general population.

* A family history of addictive problems is one of the best predictors of risk for addiction. Peer influence is another significant risk factor.

* According to a research review in the Oxford Textbook, rates of depression are significantly higher among people with addictions than in the general population, with indications that people are using the addictive activities to medicate themselves for the pain of depression.

* Addictions are also most common among individuals with attention deficits and hyperactivity problems and appear to be related to sensation-seeking among those needing stimulation.

Fascinating stuff, and an important and often overlooked issue.

Thanks, Doc.

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Source:
Addictive Trading
Brett Steenbarger
TradingMarkets, Friday November 3, 9:27 am ET
http://biz.yahoo.com/tm/061103/14986.html

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