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Trading Addiction
You're addicted. People don't like the term (more about that later) but unfortunately it's true. This thread isn't to make you feel bad, or to shame you, it's to hopefully try to assist with eliminating the negatives.
Sometimes that's good, sometimes that's bad. You'll go through various methods for justification but you also need to accept some of the truth to make better financial decisions.
A topic I've written about so many times but we're due for an update and a deeper dive into the new mechanics at play, along with the education for the new market participants.
Let's start with the classic addiction symptoms, firstly the real-life interrupters:
- Compulsively checking your phone for charts
- Unable to complete normal, everyday tasks without checking your phone in between
- Checking your phone in the middle of meals
- Doing one task on your phone and getting distracted half way through to look at charts
- Muscle memory loading up charts on autopilot when you unlock your phone
- Needing to keep your phone on charts when in the shower or somewhere else and finding creative ways to enable you to do that
- Telling your friends/family it's "work" or "important" and that you need to be on your phone
- Getting angry that you have to do something that breaks your time from access to a phone/charts
- Not listening to conversations or being distracted just staring at candles
And now the trading symptoms:
- Entering and re-entering the same position multiple times based on no change in setup
- Throwing money into coins based on small impulses on the LTF
- Throwing money into coins based on a green candle appearing to be moving fast
- Looking to utilise leverage whenever possible to hit bigger wins
- Never wanting to close or sell a position because "what if it goes higher"
- Starting to do the mental calculation for how much profit you'll have if your coin reaches a certain price
- Rotating between multiple coins all the time in the hopes of catching a big move but capturing none of them
- Always feeling "late" to coins and to moves in the market
- Feeling overly emotional about your positions and necessity to have access to an exchange
There's more examples but hopefully that's captured enough of them for you.
Let's break this down, remember the idea was not to shame you, it's to try and help.
Firstly, not all addiction is bad addition when it comes to trading. The majority of us are addicted, whether that's through the close ties to gambling or because of a genuine love and affinity for the world of crypto.
You have to learn to harness the good addiction, you have to have power over your actions and understand the differences between the good and the bad.
Spending time searching for opportunity = good
Blankly staring at a 5m chart entering and re-entering a position on max leverage = bad
You can see the common split here so I can leave you to come to your own conclusions about a positive use of time in this space and not something that's simply based on addictive gambling qualities.
Typically positive or good addiction doesn't actually involve money at all, it involves time. The longer you spend researching before actioning typically leads to better decision making, you're slower, more patient and have more information when it comes to putting money on the line. And you need to have that. You need to put the time in. Success doesn't come without earnings your stripes.
Addiction and impulsiveness are closely tied so our bad addiction qualities usually come from the decisions we make because we believe there will be a quick and very positive response from them.
FOMO into coins
Buying because someone tweeted
Attempting to use high leverage and getting chopped up
Impulsiveness is linked to time. Many people are in a rush to "make it" - they operate at 100mph constantly in the hopes of hitting it big. Giving themselves incredibly small time horizons for success.
We have a combination of addiction, impulsiveness and unrealistic time horizons.
Now the thing that really seals it for a lot of people is justification.
The justification side is very important to understand for addiction purposes. If you've found yourself justifying your actions because you believe they offer huge opportunity, like SOL presales, it's often just the minds way to allow you to complete the dumb action. People add justification to try and avoid the gambling or addiction label.
We often justify our actions as a way of deceiving ourselves that the stupidity can be accepted.
"use max lev because this could be the breakout"
"this presale really will moon"
"all my buddies think this is a good idea too"
"a lot of people are talking about this coin now!"
Our minds typically always look for the positive outcome first, especially those rooted in this space. We are often optimists because of our risk tolerance and so we allow that optimism to encourage us (or at least tip the scales) to make decisions we really shouldn't. Again, look back to examples of leverage usage and how we can convince ourselves very quickly that "now might be the opportunity to get in!"
But of course, reasoned, well balanced justification is important which is why we're brought full circle to the good vs bad addiction.
Addiction is tough, it is very hard to break, but you can be addicted in a positive way. Slow down the speed at which you chuck money away by actioning on your impulses and instead divert that passion and love you have for the space (and the potential for opportunity) into researching, educating yourself and coming up with smarter more informed ways to use your capital.
The gambling capital spiral to zero is real. It haunts many people and unless you make changes to your actions, your dreams will remain unfulfilled.
Slow down.
Treat leverage sensibly.
Use your time wisely to make informed decisions.
Accept that success is built over many months/years.
Learn to change and adapt your negative behaviours.
Question your actions.
(And probably utilise spot and chill a lot more)
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