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Nial Fuller

Professional Trader, Author & Trading Coach

Forex Psychology – Trading Can Be Addictive

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By in Forex Trading Articles by Nial Fuller Last updated on | 5 Comments

internet-addiction‘Addict’ is a dirty word associated with the perceived down and outs of society, those who sleep on a park bench or live from one needle to another. But addiction invades slowly and surreptitiously and can hit anyone at anytime, although some are more susceptible than others. Genetic components definitely can and do play a role. Research has shown that the brains of addicts metabolize and process their drug quite differently from non-addicts. There is reason to believe that one part of the brain in particular is involved and that when it has been activated, the addiction takes over and stimulates uncontrollable behaviors.

Trading involves intense exercise of the brain and the will. It constitutes constant analysis and problem solving as performance-based skills become increasingly fine-tuned. Serious players of chess, poker and successful athletes develop and grow in similar ways.

However, trading can become an instrument for destroying mind, soul, body and lives. For trading can become an addictive activity. Whereas an addiction to alcohol and other drugs are substance addictions, an addiction to trading is a process addiction and thus much more difficult to spot and overcome. There is a great deal of research in this area that has yet to be done but consider the following:

The science behind addiction

Addiction to alcohol or other drugs is a progressive neurological disease strongly influenced by genetic vulnerability. Inherited or acquired abnormalities in brain chemistry create an altered response which in turn causes a wide array of physical, psychological and behavioral problems. Although environmental and social factors will influence the progression and expression of the disease, they are not in any sense causes of the addiction.

What takes place is the creation of a new generation of chemicals known as tetrahydroisoquinollines, TIQS for short, which are almost the spitting image of a family of pain-relieving compounds known as the opiates. Like the naturally occurring opiates, the endorphins and enkephalins and the synthetic opiates morphine and heroin, TIQS are addictive substances. If TIQS are formed in sufficient quantities in certain crucial areas of the brain, they can induce changes in brain chemistry that generate pathological cravings.

It becomes highly likely that the same processes are involved in regard to addictions to trading. If you have family members who have addiction problems, then your susceptibility to becoming addicted to trading becomes a real danger. As with alcohol and other drugs, trading can be used to numb feelings and escape from life. Ask yourself this question: do I have a passion for the forex market or for trading?

Forex-trading coaches, psychologists and countless books will talk about losing self-discipline, self-control and patience.But seldom will the very real danger of addiction be contemplated and addressed. Very often, losses of the aforementioned attributes in the market are related to addictive patterns of behavior.

An addiction occurs when an activity provides a strong source of stimulation that, over time, a person becomes psychologically and sometimes physically dependent upon. We generally label a behavior as an addiction when people seek out the activity even when it is destroying everything and everyone around them. It is the inability to stop the activity when those consequences interfere with life that marks any addiction. This can be more simply expressed: who is in the driving seat, me or my desire to trade? Do I find it impossible to keep out of the market? Do I repeatedly attempt to curb my behavior but fail miserably over and over again?

Addiction statistics

addictionAccording to research 2 million adults (1% of the population) meet the diagnostic criteria for pathological gambling. Another 4-8 million adults (2-4% of the population) can be considered problem gamblers who are experiencing direct problems as a consequence of gambling. Trading fits into this category. When you enter the market with the pure intention of making as much money as possible, this is gambling. There is no plan, no structure, no goal. The expectations of limitless wealth dance before your eyes and what keeps you hooked is the occasional ‘big fish’ you catch. What is ignored are the overwhelming ones that escape. Are you a Forex trader or a gambler?

In psychological terms this is known as ‘Random Reinforcement’. Random Reinforcement’ can be defined as: ‘having behaviors reinforced with positive or negative results on an inconsistent basis’. So today we perform a certain action and are rewarded for it. The same thing happens tomorrow, but then on the next day, we perform the same action and are punished for it. And so on, in a random manner. This makes effective learning impossible. In the market we cannot avoid this situation. All we can do is recognize it, stick with our rules and discipline and detach ourselves from the money. You have to feel good about your trading, not whether you made or lost money, but on your ability to stick to your rules. Rules and discipline are the only consistent things in an inconsistent Darwinian environment.

Further research in psychology and psychiatry finds that between 14 and 16 million Americans meet diagnostic criteria for alcohol abuse or dependence. Between 4-6 million Americans are dependent upon illegal drugs.

Rates of substance abuse among men ages 18-44 are double those of the general population.

A family history of addictive problems is one of the best predictors of risk for addiction. peer influence is another significant risk factor.

According to a research review in the Oxford Textbook, rates of depression are significantly higher among people with addictions than in the general population, with indications that people are using the addictive activities to medicate themselves for the pain of depression. Suicide statistics for addicts are high as they often see no other solution to their addiction. This fact is quite pertinent in the present global economic downturn. How many have taken their lives in the past months as their ‘empires’ have collapsed? Their addiction to the rushes of adrenaline caused by high-risk thrill-seeking behavior, without regard for the consequences to themselves or others, has proved as fatal as any other poisonous drug.

Addictions are also most common among individuals with attention deficits and hyperactivity problems and appear to be related to sensation-seeking among those needing stimulation.

Trading addiction

tradingaddictionEven if we assume that traders do not have more frequent addictive behaviors than the general population, the statistics tell us that, in all likelihood, nearly one trader in every ten has a diagnosable addictive problem.

For the trader with attention deficits who cannot tolerate boredom or lack of stimulation, forex trading provides action.

For the trader who is depressed, trading can provide an escape from the self and a sense of immediate gratification.

Such traders need to trade and keep trading when they have no edge whatsoever.

They lose their money, generate failure experiences for themselves, and create hardships for their families.

For them, it’s not about “discipline” and following trading rules. For the addict, such efforts are useless, for in all probability, he or she is fighting against forces far outside conscious control. . The only solution is getting their lives back.If you see any aspect of yourself in this article, for the sake of yourself and your family, look long and hard at yourself. Trading should expand your control and self-mastery, not become an instrument for their destruction. The sole purpose of trading is to make money, not to feed emotional deficits.

One question I put to you: ‘what would you do if you could not trade?’ If you draw a blank, you are in trouble. It is like asking the alcoholic ‘what would you do if you had to stop drinking?’ The answer to the latter is usually ‘life is not worth living’. Ask yourself….has trading become so much part of my life that I could not live without it? What would I do INSTEAD of trading if I had to?

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About Nial Fuller

is a Professional Trader & Author who is considered ‘The Authority’ on Price Action Trading. He has a monthly readership of 250,000+ traders and has taught 20,000+ students since 2008. In 2016, Nial won the Million Dollar Trader Competition. Checkout Nial's Professional Trading Course here.
  1. Dmitriy September 16, 2019 at 1:57 pm

    Thanks a lot, Nial!
    That was a truly beautiful lesson!

  2. Sunday September 14, 2019 at 9:53 pm

    what to know more about risk management
    if I want to risk 1$ on a pair what will be my lot size and pip value to set as a Stop loss

  3. Zinnur June 2, 2019 at 4:34 am

    Important lesson. Thanks

  4. Благодарность October 30, 2018 at 3:47 am

    Magnificent article

  5. Rahmat February 26, 2018 at 7:36 pm

    Almost every articles content and language from Nial are really giving positive effects including this one.
    So thank you Nial.

  6. Olawa February 18, 2018 at 1:01 am

    Nial is my preferred Forex mentor anyday

  7. DERRICK February 16, 2018 at 12:54 am

    all i can say is thank you so much

  8. Tha Mathabzo Zulu February 15, 2018 at 8:15 pm

    Thank Nial

  9. Duncan February 15, 2018 at 6:29 pm

    Thanks Nial;

    This was a great post which actually helped me rephrase my thoughts after my losses.

    I am still not very profitable at this stage but every time I lose, I look back to see what I could have done better and learn to minimize my losses maybe exit at a small profit rather than a loss!!

    However; after having read this, I also now appreciate the fact that losses are a part of it as well and I feel less discouraged before taking the next trade than before. Things sometimes are easier said than done – true – but after reading these guidelines, I learn a lot and appreciate it heaps. I am learning a lot and the best part of it is that I am enjoying it.

    Thanks for spending the time to post such valuable guidance!


  10. Peter Miller February 15, 2018 at 2:46 pm

    Another good lesson. As they say ” life is what you make it “and that goes for trading also, think before you act and know that never one day (or life is ) is the same as the last one, so treat as Nial says each trade as a new beginning. Thanks .

  11. rudra February 15, 2018 at 6:24 am

    good one sir

  12. Khesiwe February 15, 2018 at 2:14 am

    Excellent article pactice makes perfect I’m going to practice every advice in this article thanks Nial

  13. Winston Roy Longbottom February 15, 2018 at 12:01 am

    Thanks Nial, I for one admit that I was influenced by previous success and could not see the next trade through that; I was brought back to reality with some quick losses, however I puuled my thoughts together and looked at my next trade with confidence and considered every possible angle before taking it and I am now back on track. This article has since reassured me of that fact and I must disregard any previous trade before attempting the next. Your articles help keep sanity in the trading game and also leads to further success. Many Thanks. Winston

  14. farzad February 14, 2018 at 8:50 pm

    Every word in this article is like gold…

    Thanks AGAIN Nial.

  15. Olamide February 14, 2018 at 2:03 am

    Thanks Nial. That’s reminds me of a trade some years ago before I quit trading. I bought EUR/USD on $0.05 lots with $20 risk and i made a profit of $183 on that trade so that winning recency bias got into my head and I felt overconfident, then i went ahead to trade $0.10 lots on my next two trades and I lost both. That’s how I gave back the profit I made from that EUR/USD to the market. Fear start to catch me then I reduce my lots to $0.01 which definitely reduced my profit that I would have make on some trade. Though I just came back to the market since two or three years ago that I quit but am still using demo account to test my trading strategies before trying to come back live. Thanks once more.

  16. Wandera Moses February 13, 2018 at 8:50 pm

    Nial thx for this one also. i have improved alot in trading just by reading your articles. thx alot

  17. ampurirag February 13, 2018 at 6:09 pm

    Excellent and timely. Thanks Nial.

  18. Seiso February 13, 2018 at 1:44 pm

    Typical of Nial’s mail’s. I am not in anyway surprised to find this post hitting the nail on the head as it does and so timely as well. I always find Nial’s post as informing, factual and educating like this one. Thanks to Nial, from now I am no longer going to be enslaved to my last trade’s results.

  19. Colin February 13, 2018 at 10:31 am

    Thanks for the trading insight. Particularly about training our brains to behave properly.

  20. Hettie van der Vyver February 13, 2018 at 5:12 am

    this makes sense!!

  21. Thoko February 13, 2018 at 5:09 am

    Well I am a true novice,I have not started trading yet. If I understand well briefly you say if one is a trader one must bury the past.That is my motto
    So I feel l Iam going to do well.

  22. Wasantha February 13, 2018 at 4:45 am

    This article explains what happened when I first started trading forex. After reading many of Nial,s writings on the subject of trading I feel that I am expanded in my knowledge and confident about my trading decisions.I really appreciate Nial,s works,

  23. kris February 13, 2018 at 2:59 am

    i noticed today after one loosing trade that it can’t reflect, the other running trades .
    After that i checked my emails and i saw your email as first .I have read it and then it was like you would heard what i sayd before It was simmilar to :

    If you just lost, it has no bearing on the fact that your next trade might be a winner.
    If you just won, it has no bearing on the fact that your next trade might be a loser.

    thank you for your work .
    traders mindset ..

    have a nice day.


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