Addiction to Cryptocurrency Trading
Traders have been moving from the stock market to trading cryptocurrencies unaware or unconcerned by the dangers they face. The lure of huge gains and funds ready to trade immediately is a unique feature that draws traders from all markets. Funds ready to trade immediately mean trading more often and the possibility of faster compounding of gains. Fast gains reinforce a false sense that good decision-making is being applied to trades.
The addiction has begun to take hold. The gains trigger the release of dopamine in the brain. The dopamine produces euphoria or "high" that gets harder to reproduce over time. The trader begins to trade larger and larger positions trying to recreate the "high" they got when the first huge gain was made. This behavior causes the dopamine levels in the brain to increase and the brain raises its tolerance. The body starts to crave trading more and more to get back that "high" feeling.
The trader keeps increasing their positions to chase even larger gains. This "high" trader still believes they are following their rules but they've already lost their emotional detachment and don't recognize when the rules are broken. They justify the rule breaking with false logic and are unprepared for what is taking place in their brain.
Suddenly, the market changes direction and the trader gets a new "high" from the panic and fear of losing the gains they've worked so hard to bring in. Panic and fear cause the brain to release adrenaline in combination with dopamine. Now, the losses really start. The trader's mind is confused by the intense feelings and they are choosing trades that lead to losing positions, breaking all the rules.
The losses increase rapidly as the trader continues to increase position sizes triggering an increase in the brain chemicals released. Over and over, the trade appears to be almost deliberately chosen against the rules. The trader struggles to justify the decisions and begins to think of the trades with a mindset of a 50% possibility of gain or loss. This has turned the trader into a gambler.
The final result is a complete loss. This trader will use every resource available to maintain the "high" feeling until everything is gone.
Do you want to know how to steer clear of the addiction, break out, or avoid falling all the way?
Recent Comments
11
I am not sure whether or not this happens with crypto, but you have offered a great outline of the cycle of addiction.
There are generalizations in this article that don't make sense. Do you know an actual person who's lost everything trading crypto? Do you buy crypto yourself? Were you aware that everyone invested in crypto was mentally prepared for a crash that was long overdue? It crashed in 2018, rebounded, and crashed again four years later. It's part of the game.
Several blockchain companies that sell their coins are pretty reputable and are currently used by millions of people for trading, gaming, etc. Other blockchain companies are complete crap. To know the difference requires research like anything else.
The current slump is due to corporate/retail crypto traders buying low, making a profit, and then dumping their holdings back on the market to push prices down so they can buy low again and make more profits.
If you want to sell articles on Constant Content then you have to write articles that offer real advice on a subject that might not be available anywhere else. I know this because one of the articles I sold on that platform offered an action plan with specific suggestions.
It doesn't matter what you are trading, if you are using money that you can't afford to lose, you have no business trading at all. You are simply gambling.
I mean no disrespect, you seem to be well-intentioned but I am tired of the anti-crypto crowd who seem to know nothing about it. The stock market is just as dangerous.
So...the question is: What is the purpose of your article? It's not clear.
Regards,
Wendy
Wonderful response! You certainly picked up on the key points that I was putting out to evoke a reaction. The topic has many branches that can be followed. I was hoping to get accepted to Constant Content but they denied my submission.
Don't be confused, I am all for a crypto market and trading in general. My goal was to put a spotlight on the addictive responses to the big wins that trading has for some traders.
Trading is a business and should be run as such.
I really am glad that a few people read my article and got something out of it. That is one of my main goals when writing but I have a lot to learn.
Cheers!
Frank
We all have a lot to learn Frank, don't worry.
Keep trying with Constant Content, their editors are very picky. If you follow their corrections to the letter and resubmit you will get accepted sooner or later.
I grew up with a compulsive gambler. One of the things I know for sure about gamblers and traders who are gambling...unless they have admitted they have a problem they do not believe they are gambling. So any articles aimed in their direction fall on deaf ears.
Crypto and blockchain are huge niches. Keep at it you'll just get better and better. 😊
Frank, I never truly believed or trusted in Crypto Currency, and the recent market events with it has bore this feeling of mine out!
Jeff
This is my article writing submission to constant-content on 6/19. Let me know if you would read the article or if it needs "spice". Thanks, everyone!
See more comments
So I guess you are offering something that helps to break the cycle of addiction, a workshop or course?
Fantastic idea! Like AA for traders. I do think that if someone has an addiction of this kind, the more people that know about the problem and help watch out. The less likely they are to fall all the way to the bottom. Many times it only takes someone to ask the hard questions of the person for them to "wake" from the self-created fog.