Does Addiction Play a Role in Your Trading?
Addiction is coming up more and more regularly as a topic when I work with traders, so I thought it timely to write about it. I’ve included some tips that might be helpful. If you have found yourself doing wild and crazy things trading, letting caution to the wind, and acting out of control, this article might be for you.
You don’t need to be a complete addict to have “addictive behaviors” take over and ruin your trading. I think this is a fairly common ailment amongst traders. There can be a solution, it just takes work on your part.
Ask yourself if addictive trading behaviors are an issue you are struggling with.
If you have a proven, profitable trading system, and a trading plan to trade it, and you aren’t consistently following them, then the answer might be, “Yes.” Or, if you are doing things you know are wrong and seem to have no control over it. . .
Again, it doesn’t mean you are an addict, but we want to try to work with those behaviors, get to the bottom of them, and put you back in control of your trading. I have outlined some of the steps and practices I use with clients to help tackle this.
First, just notice that you are doing this. I suggest getting a pad or journal or some device, and record each time you engage in an “addictive” behavior while trading. Record the facts: date, time, trade, result, etc.
Try not to beat yourself up for the mistake, or even find a way to fix it. Just notice you did this, without judgment. (“Oh, isn’t that interesting, I just took this addictive action.” Rather than, “You idiot, you did it again! What is wrong with you?)
You can also rate it on a scale of 1 to 10. A “one” is a minor mishap, and a 9 or 10 is full-on addictive, out of control, behavior or series of behaviors. Rating it gives you a chance to measure it.
There is a decision that you make when you choose to take the addictive behavior. You likely are not aware of the choice at that moment. (Think of it as similar to an alcoholic looking at a drink, or a compulsive eater, eying a piece of cake, deciding if they want to consume it.)
When you do the behavior, you are making a decision. Maybe consciously, maybe not.
For this step, try to identify, isolate, and see the exact moment you make the choice (to take the addictive action). Prior to trading, remind yourself to look for this choice point so you will be more aware of it when it comes.
STEP 3—HIDDEN BENEFITS
Ironically, there is much to be gained in carrying out an addictive action, even though it can be costly. These behaviors enable us to avoid feelings, for example. That is a core benefit to choosing an addictive action. If you just had a huge loser and are feeling really badly, for example, jumping back into the trade with “hope” of reviving your account balance can take away the pain, temporarily, and replace it with adrenalin or hope.
Take some time to see how your addictive actions are serving you. What benefit do you get? Try to come up with 5 or 10 benefits. Write them down. Don’t skip this step, it is important.
What do you want? Overcoming the addictive actions may not be easy, so it will be important that you really want to. As strange as it sounds, not everyone will. There may be more gain, satisfaction, adrenalin, etc. in continuing the actions, rather than stopping them.
Write a list of what you want, as a trader. Get it as clear and specific as you can. For example, “I would be at choice with every trade.” Or, “I would be easily following my plan with no “pull” or desire not to.” Or, “I would trust my trades and myself,” etc.
Create a visual or a statement of this, and put it somewhere you will see. Like a plan for a vacation where you see pictures of the beautiful beach you will be visiting, create an “image” of you as the trader you desire to be, your new life, and what it will look like and feel like when you get there.
Decide and commit to deal with this. If you chose to do so, understand that there will be work involved, self growth, and giving up of some of the benefits of Step 3 (above).
This is the start of the real work, as it is going to take effort to make this happen.
STEP 6—THE WORK BEGINS!
Okay, now’s the tough part!!
At the core of addictive behavior is the desire to not feel . . . something. . . i.e. some feeling. We eat the cake, or take the drink, or even take the addictive trade, to not have to feel.
As best as you can, notice the sensations in your body the moment you decide to take an addictive action. Or, right before, when you are feeling the need to act. Close your eyes, feel your body, and notice the discomfort in you. (Such as nausea, pounding heart, stomach pangs, anxiety, sweaty palms, etc.)
Feel it. Allow it to be there, even though you want it GONE!
I have a full process I take my clients through here, but you can do a good part of it on your own if you are willing to try this step.
Commit to one 5-minute session each trading day, where you wait for an addictive action, and then remove yourself from the market, and then practice this feeling technique.
As we are able to “be with” our feelings more and more over time, we become okay with the discomfort inside us, and it starts to dissipate. As it does, it lessens the drive toward addictive actions.
Then the peace and freedom to trade without this interference comes in. And, you start to become free of this addictive pattern. Yes, it takes work, but it works.
There is only so much angst in each one of us, and by feeling it and allowing it, over time the amount gets smaller and less powerful. Then, hopefully one day it will be gone!
Wishing You Awareness,
Andrea Wylan, MPH, CPCC
For your complimentary private consultation, please contact
Andrea at email@example.com or 619-665-7558.