The Psychology of Market Addiction – Why Some Traders Can’t Stop Betting?
Ajay has been trading a small-cap textile stock for a while and earned a considerable profit on a breakout with RSI and volume spikes. But he’s been unstoppable since then and trading without stop-losses, while convinced that he can time the market perfectly and that nothing can go wrong with this stock, soaring ever since it ventured into the market. A couple of weeks later, the stock crashes, undoing the profit earned and draining the capital invested! Unfortunate, and of course, undesirable. But situations like these are normal and regular across the stock market. Some traders just cannot stop themselves while trading. The profits gained in a particular trade lure them into betting more (based on purely instincts and tips), spiraling them into losses, perhaps, way beyond their risk tolerance levels. This is called market addiction. Some players cannot overcome it. But why does that happen? What are the hazards of being addictive? And how to overcome the challenge with the best share trading classes in Pune? Let’s address these concerns in this blog. What Drives the Market Addiction? Market addiction results from various factors that keep traders hooked until the market calls it a day. Here are some of them. Excitement After a Successful Trade: Success gives you a kick to which you become addicted over a while. So, you need more and more of it. With a few significantly successful trades, some traders become overconfident and conditioned to chase that high, looking for the next win that gives them the kick they love. Market Unpredictability: The uncertain nature keeps some traders hooked to the trading screen. They expect a possibility of a big win (despite multiple and continuous losses), which is around the corner and encourages them to bet more. Chasing Losses: Another factor is the urge to make a strong comeback after a loss. It compels traders to double down, taking on even bigger risks in a deliberate attempt to recover their losses. This seldom works and usually entangles traders in a spiral of even bigger losses. FOMO (Fear of Missing Out): The world seems infected with this nowadays! Traders in the stock market are no exception. The constant stream of hot tips, new entrants, etc., can trigger FOMO, drifting people away from their objectives. The fear of missing out on a profitable opportunity can lead to hassles and impulsive decisions, potentially pushing them into a gorge of losses! Addictive Trading Can Hurt You Financially and Emotionally - Why Stopping is Winning? Being unstoppable makes you feel high, particularly while traversing darkness, but it could have dire consequences. Here’s why applying brakes at the right time is crucial. Financial Losses: Too obvious, isn’t it? Financial losses can be disastrous if you’ve drained all your savings. It can lead to crippling debts and even bankruptcy! Emotional Injuries: The dynamic nature of the market or financial losses resulting from a stock crash can break you emotionally. It can lead to abrupt decisions that may land you in absurd situations. Damaged Relationships: Financial strain, and emotional turmoil associated with the trading addiction can hurt your relationships, potentially isolating you. Life Imbalance: Thinking of trading all the time can imbalance your life, driving you away from studies, work, hobbies, family, etc. So, how do you overcome compulsive trading? Self-control is the best thing. But here’s how the best share trading classes in Pune can help. From Emotional Trades to Educated Moves – Join the Top 10 Best Online Share Market Courses by Finearn! Controlling Addiction - How the Best Share Market Courses in Pune Help? Apart from technical education, a reputed stock market institute in Pune also touches and trains you on aspects like emotional control and rational decision-making. Here’s more. Structured and Goal-Driven Approach: Share trading classes help you think, make decisions, and trade in a structured manner, depending on your goals. So, you never over-trade and know when and where to stop based on your analysis. Practical Exposure: The course involves learning how it feels to lose money through a practical approach. Thus, you would have already experienced the emotions when you lose money on a trade, making you more composed, alert, and resilient. Psychology of Trading: The best share trading classes in Pune help you understand behavioral biases, educating you about confirmation bias, loss aversion, and anchoring. They make you aware of the pitfalls so that you can avoid them. Building Emotional Discipline: Cultivating discipline, waiting for the right opportunity, and staying firm with a predefined strategy are the core tenets of a comprehensive share market course. These help you trade more thoughtfully. Final Words – Be a More Disciplined Trader with Finearn Share Market Academy – Offline as well as Online! EMS, now Finearn Share Market Academy, acknowledges the importance of prudent and controlled trading. While we are pleased to announce the change of name, our team, approach, style of training and environment remain the same. Emotional control and self-discipline form the cornerstones of our approach that we inculcate while training aspirants. Want to explore our classroom and online courses? Call us at +91 95618 61818.