Signs that You are Addicted to FX Trading
There are a lot of people who compare FX trading to gambling. Some of these people do this because they assume that trading on the forex market is much like gambling. However, there are other people who do this because of the addictive nature of FX trading. There are a lot of people who become addicted to trading and this often leads to losses. It is important that you know the warning signs for trading addiction and why this is so bad.
Why FX Trading Addiction is Bad
Any type of addiction can be considered a bad thing. However, with FX trading when you become addicted it will lead to losses. There are some traders who are addicted to trading and see a profit from their trades. However, this generally does not last and the profits they make dwindle until they are only making losses.
Addiction to trading affects you body and your mind. This kind of trading will cause you to tire, but you will continue to trade. This leads to trade that are made with a tired mind which often lead to losses. Being tired when trading means that you are bound to miss small points in the market, which you would normally see.
Checking Your Brokerage Account
One of the signs that you are addicted to forex trading is constantly checking your trading account. While this is something you should be doing during your trading hours it is a problem when you do it outside of your trading schedule. When you are in the time when you should not be trading constantly checking your account could be a sign of addiction.
The problem with constantly checking your account is that it increases the temptation of opening a position. You may look at the charts and see a pattern that you normally trade on. This will lead you to want to open a position that you are sure will make a profit. This position will be classified as an emotional trade and you would not have completed all the required analysis.
Placing a Lot of Trades
There are some trading strategies that require a high volume of trades to be completed. These are generally day trading strategies like scalping. With these strategies it is harder to determine when you are addicted. One of the signs of addiction is that you overtrade. This means that you open more position each day then you should just to get the thrill of trading. With high volume strategies it is harder to determine what is overtrading and what is part of the strategy.
When you start trading you should create a limit for the number of trades that you complete each day. If you are only a few over this target once in a while then you are not overtrading and probably not addicted to FX trading. However, if you are very far over the limit and constantly find that you trade more than the limit then you are over trading. This will also mean that you are probably addicted to trading.