Can Trading Futures, Forex Or Stocks Be Addictive?

addictiveFutures, Forex Or Stocks Be Addictive?

Real addictions are a very grave matter and while trading doesn’t involve the consumption of any substances, there are those that believe that trading is truly addictive.

The tremendous emotional rushes that most traders experience both prior to placing a trade and while in the middle of a big winner or big loser are an acknowledged part of trading, but are traders truly becoming addicted to trading?

Is there a need for help for traders, or is the situation one where the high percentage of traders that lose money is simply due to them still being in the learning curve and suffering the losses as a normal part of “paying your dues”?

In this article we are going to investigate the matter and determine if there is sufficient evidence to support the hypothesis that trading is indeed addictive.

So what constitutes an actual addiction? There are two categories of addictions, physical dependence and psychological addiction. There is a considerable amount of information on both and certainly beyond the scope of this article, but a brief summary follows

From Wikipedia, the definition of “addiction” includes:

“Psychological addiction, as opposed to physiological addiction, is a person’s need to use a drug or engage in a behavior despite the harm caused [emphasis added] – out of desire for the effects it produces, rather than to relieve withdrawal symptoms. …. it becomes associated with the release of pleasure-inducing endorphins, and a cycle is started that is similar to physiological addiction. This cycle is often very difficult to break.”


“Psychological addiction does not have to be limited only to substances; even various activities and behavioral patterns [emphasis added] may be considered addictions if they are harmful….”

From Merriam-Webster Online, the definition of “addicted”:

“1 : to devote or surrender (oneself) to something habitually or obsessively”

So an addiction could be described as a person feeling the “need” to repeatedly engage in a particular behavior to satisfy a desire for the emotional effects that is has, the feelings that it produces.

It is a desire that they have rationalized into a need, to which they have surrendered control, and they have allowed the behavior to develop into a habit. This is physiologically compounded by the endorphins released into the system that provide a physical feeling effect as well.

Let’s look at some of the necessary practices (behaviors) of trading to achieve consistent profits and some of the behaviors exhibited by many traders and see if they fit the above.

One recognized critical practice for profitable trading is good risk management. At the heart if this is making sure that the risks you take are measured and calculated risks.

You want to keep your losses small when they occur and avoid them all together when possible (such as NOT getting into bad trades). Key tools commonly used for controlling potential losses include risk / reward calculations and stop loss orders.

Risk/reward calculations are necessary on every trade so that you know whether each trade is a sound business decision.

Stops are used so that then a good trade is placed but the market doesn’t do what you’d expected. With the leverage in trading that can work for or against you, risk management is essential.

General money management is another critical practice to make sure that your trading business will still have the doors open months and years from now.

It includes risk management but the focus is on a larger scale and a broader scope, such as looking at what percentage of your available capital you are placing on any given trade, regardless of the details of the specific trade.

These practices may appeal to the intellect, but how they feel is where traders get into trouble. There are several common mistakes repeatedly made by traders that bring large losses, missed profits, and ruin for many.

These mistakes run in direct conflict with the known and established good practices for consistent and profitable trading, yet are made over and over again by the same traders.

Since they are repeated, it would be reasonable to say that they have become habits. Let’s examine these habits from the perspective of the emotional response for the individual.

Trading without a plan, also known as entering a trade without an exit strategy for the trade.

The trader doing this is usually not following a technical system and is going more on their hunches than sound calculations.

This right here is an indicator that they are allowing their feelings to dictate their actions more so than their reasoning and rationale.

If the market moves in their favor, it reinforces the decision to follow their intuition and feeds the ego in being right.

Another very elemental factor is suspense. If one has the trade planned out and there are no surprises, it takes all the suspense out of it. Why do people love a good mystery novel or movie?

They love sitting on the edge of their seats and reveling in the suspense of it all. When you know the end of the story it takes all the fun out of it and who wants that?


Refusal to use stops. The comment often heard by brokers is “No, I don’t want to get stopped out. I’ll just watch it.” This is true for initial stops and quite commonly for trailing stops after the market has moved in one’s favor.

The trader is putting a lot of energy in to their feelings hope and anticipation. The ego is also being fed here, “knowing” that the market will do as they desire.

As the move goes their way, they are experiencing a tremendous thrill, plus the validation they desire about them being a better trader than they truly are.

When the market moves against them, the opposite feelings are amplified and only create a greater need to be validated. This also again, involves a lot of suspense and anticipation.

Over-trading regarding frequency, A.K.A. trading too often. Usually in this circumstance the trader is feeling the need to satisfy their perception of lack.

They may have just experienced a string of losers or a very large loss and now feel that they have to recoup their losses and absolve themselves for the previous errors.

They are feeling bad about themselves and rather than do what they know is right, they simply want to have the bad feelings go away.

Placing trades that are too large for the account. One of the more interesting aspects of this particular mistake is that besides the greed factor, people get a bit of a thrill going against the rules and particularly stepping outside their comfort zones.

The simple act of rebelling or being adventurous is what many got a taste of when they first got into trading and how it is so different from what they’d ever done before.

The new territory has its appeal and stepping out of the norms and standard rules has a strong gratification associated with it. Of course the greed factor is pretty strong here as well.

Only risking 2-5% of your account and the prospect of a measly couple hundred dollars just doesn’t match up with the big numbers one had in mind with trading, or what’s heard often in the ads for the various trading systems available.

When you’re only making $800 on this trade and you see and an that claims “I made $9,700 on my first three trades!!!”, that reasonable profit you made just isn’t very satisfying.

One thing worth pointing out right now, and it directly relates to our subject is the fact that people will make mistakes.

People only knowingly repeat them when there is a problem. If you get up out of bed in the morning and stub your toe on the footboard of the bed, you wouldn’t stand there and keep smashing your toe again and again.

You’d stop, unless of course there was some sort of additional response that was strong enough to compel you to do it repeatedly until your foot was completely mangled.

You’d only smash your thumb when hammering a nail once before you changed how you were holding the board – unless something was wrong.

In comparing the repeated trading mistakes with the established good practices, it is in the emotional responses of the mistakes being made. Suspense, personal absolution and validation, excitement, feeding the ego, being right.

These can be very powerful and provide enough stimulus for the person that it over-rides their better judgment.

The actions involved in the two sets are in direct contrast regarding both the financial results and how they feel to the trader.

Knowing the outcomes for a given trade, keeping the risk small, managing money wisely – these are boring and provide no suspense. Lacking surprise and done with a knowing, good trading provides a much lower emotional confirmation of a traders ability on the emotional level.

When you’re good and you know your good and produce consistent results, those consistent results are not a huge celebration.

When you’re a rookie and you do well, it is much more gratifying, especially if you hit a big one. That’s a huge ego feed.

There is an inverse relationship between the discipline necessary for good trading practices and the emotions involved in unhealthy trading.

The discipline itself runs 180 degrees against the satisfying emotions and denies them to the trader.

That is one of the primary reasons that so many traders struggle with the emotional aspects of trading. It is the way that they are trading.

They are trading in a manner that fuels their emotions, and established poor habits – both active and emotional habits.

If they would focus on establishing healthy trading habits and practices, follow the established wisdoms and observe themselves in their trading, do the simple things that they are supposed to do, their emotions would not flare up so badly and they could begin to break the cycle.

Trading itself is not addictive. There are a great many traders that trade in a healthy manner and enjoy the lifestyle that goes with it.

There are aspects of trading that set the stage for the individual to become addicted to trading unwisely.

So it is not in the activity itself. It is the focus of the individual and the habits that they establish early on in their trading that determines whether or not they become addicted and suffer.

It is up to the individual to be aware of themselves and their practice to safeguard against addiction to poor trading.

Education, assistance and proper guidance would be the best recommendation for traders, and these should be pursued as early as possible.

The longer the habits are in place, the longer it takes to break them and re-establish healthy trading practices.


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Prepared for Stock Market Crash?

Stock market crashPrepared for Eventual Stock Market Crash?

A Stock Market Crash will occur. We don’t when or how enormous, yet it is unavoidable that is it going to occur. Eventually, presently in this video, we will examine how you can set yourself up for a market crash.

Tell me in the remarks if you think a market crash will occur in 2021 and remain till the end since I’m going to tell you what the best market clock says about a market crash.

On the off chance that you can set yourself up appropriately for a crash, you can rake in tons of cash in both the long and present moment.

Warren Buffett was an incredible case of this. He purchased a huge load of stocks in 2009 when they were selling for incredibly modest costs.

Two or after three years and those stocks had multiplied. however, he didn’t do this through sheer karma; he did this through arranging, arrangement, and cerebrums.

3 key strides to plan for a Stock Market Crash

So’s what we will examine, 3 key strides to get ready for a market crash and rake in some serious cash.

Stage 1: Have a composed arrangement when you purchase stock. Before you purchase a stock record, why you are getting tied up with the organization.

Compose a rundown of why you were eager to buy an organization at a specific cost.

For instance, the organization may have an astounding upper hand over different organizations. It’s an improved quality organization, its clients love them.

Or then again, the organization may convey astonishing profit all year, every year. Compose why you purchased the organization.

So when things get fascinating and individuals freeze, you have an unmistakable head and comprehend your business.

The principal thing that has changed with your business is that it has gotten less expensive. So the one idea in your mind ought to be should I purchase more stocks. Not should I frenzy and sell everything, because I never comprehended the stock?

Stock market crash 2

Stage 2: Have a reasonable level of your portfolio in actual money and money counterparts. This is the thing that Warren Buffett does.

At whatever point stocks are getting all-around exaggerated, he guarantees that he has a strong measure of his portfolio in actual money.

Warren Buffett’s present has over $100 billion in actual money and money counterparts right now.

Presently this means when the stock market crashes, Buffett can begin sending his money and purchasing organizations when they are very modest.

Money is our meat and potatoes when the market is crashing, and on the off chance that you have a sufficient measure of it, you can bring in some genuine cash in the long haul. Also, the present moment too, however, our attention ought to be on the long haul.

Regarding how much money. All things considered, that relies upon individual inclination. Would you like to bet everything on the market crashing and have a top rate in actual money?

I presumably wouldn’t suggest that that is exceptionally unsafe because we could at present observe the market proceed with ascending for some time.

So the measure of money you have is something you equilibrium to your danger and prize.

Stage 3: Comprehend the Stock Market What the hell is the stock market. The stock market is a rundown of the greatest and most prominent organizations on the planet.

Remaining quiet in Stock Market Crash

So when you purchase stocks, your purchasing organizations or organizations.

On the off chance, that you have no confidence in private enterprise and the best organizations on the planet, then perhaps you should frenzy and sell everything.

However, in case you’re somewhat more intelligent, you realize that the world will proceed with no guarantees and these organizations will prop up in the long haul.

So if you comprehend the stock market, you’re going to expand your opportunity of remaining quiet in a market crash.

On the off chance that you can remain quiet like Buffett, you can likewise rake in tons of cash in a crash as he does.

Right, I additionally guaranteed that I would tell you what the best market timing financial specialist state’s about a market crash.

However, that was to keep you all to the furthest limit of the video. Joking, I will tell you.


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Why Offer Startups Stock Options

Startups stock optionsStartups Stock Options

In tech startups stock options were here nearly from the earliest starting point, first offered to the organizers in 1957 at Fairchild Semiconductor, the principal chip startup in Silicon Valley.

As Funding rose as an industry during the 1970s, speculators in adventure subsidized startups gave stock options to every one of their representatives.

On its surface, this was pretty extreme though.

The financial specialists were parting with a part of their responsibility for the organization — to the originators, however, to all representatives.

Offer Startups Stock Options?

Stock options for all workers of startups filled a few needs:

Since startups didn’t have a lot of money and couldn’t contend with vast organizations in pay offers, stock options hung before a potential representative resembled offering a lottery ticket for lower pay.

Startup representatives determined that a) their hard work could change the chances and b) some time or another the stock options they were vesting may make them into moguls.

Financial specialists wager that by offering imminent recruits a stake in the organization’s future development, with an obvious time skyline of a result — representatives would act more like proprietors and work harder–and that would adjust worker interests with the speculator interests.

Also, the wager worked.

It drove the persistent “take the steps”, a culture of twentieth-century Silicon Valley.

We dozed under the tables and pulled dusk until dawn affairs to get to first client transport, man the corners at career expos or boat items to make quarterly income — all since it was “our” organization.

Startups stock options 2

Startups Stock Options Strategy

While authors had more stock than different workers, they had similar stock options as the rest of the representatives, and they possibly brought in cash when every other person did (however significantly more of it.)

In those days, when Holy messenger/Seed contributing didn’t exist, to kick the organization off, originators put significantly more at risk — abandoning a compensation, selling their homes, and so on This “we’re all in it together” kept organizers and workers adjusted on motivating forces.

The mechanics of a stock choice was a basic thought — you got a choice (an offer) to purchase a piece of the organization through regular stock options (called ISOs or NSOs) at a low value (the “strike cost”).

If the organization was effective, you could sell it at a lot greater cost when the organization opened up to the world (when its offers were recorded on a stock trade and could be uninhibitedly exchanged) or gained.

You didn’t claim your stock options at the same time. The stock streamed out over four years, as you would “vest” 1/48th of the alternative every month.

Also, just to ensure you were in the organization for at any rate a year, with most stock choice plans, except if you remained an entire year, you wouldn’t vest any stock.

Not every person got a similar measure of stock. The organizers got the greater part of the regular stock. Early workers got a more modest rate, and later representatives got even a more modest piece — parts of a percent — versus the twofold digits the authors possessed.

One other thing to note is that all representatives — originators, early workers, and later ones — all had the equivalent vesting bargain, four years, and nobody brought in cash on stock options until a “liquidity function” (an extravagant word to mean when the organization opened up to the world or got sold.)

The reasoning was that since there was no chance to get for financial specialists to bring in cash up to that point, neither should any other person.

Everybody — financial specialists, organizers, and startup workers — was, in a manner of speaking, in a comparable situation.


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Binary Options as a Modern Phenomenon

Binary options modern toolBinary Options moderately new device of the financial markets.

Binary Options history goes back to 2008. They are viewed as very hazard speculations.

Trading BO require an exhaustive examination of the proper market.

By methods for specialized investigation the improvement of fundamental resources can expect somewhat, and in this manner, binary options can be placed into very attractive investments as far as income.

In this paper, we used a specialized examination as a device for the prediction of conversion standard change.

Binary Options And The Bollinger Groups

The point of this paper is to break down the utilization of trading BO and to outline this on the use case of exchanges dependent on the Bollinger group marker.

Eight procedures where Bollinger groups are on the premise will expose to the examination.

To understand the goal, a strategy for back-testing will use for a time of one month in a five-minute time period.

This implies it exposed 6912 conversion scale esteems to the investigation.

The money pair EUR/USD is used as a fundamental resource for its high liquidity.

Binary options modern tool 2

Over The Counter and Binary options

As expressed by Rick Thachuk (2010), BO have, for quite a while, been accessible over the counter yet they ordinarily showcased as colorful options to establishments and regularly bundled with other subsidiary sort items.

hen we acquainted the financial instrument with people as an attractive resource at the Chicago Board Options Trade (CBOE).

American Stock Trade and Chicago Board Options Trade (CBOE) recorded binary option on select stocks and files.

These have not been pulled in any critical retail client base.

As showed by Jaworsky (2006), CBOE introduced the primary binary options at a public interview on 10 July 2006 as one of its principal financial development.

Because of its straightforwardness, BO have gotten mainstream among brokers and today exchanged the world over.

The colossal enthusiasm for trading binary option likewise implied the development of many new merchants, who spent significant time in this very business instrument.

Today, there are roughly 400 of them.

During the most recent couple of years, however, an online electronic retail advertisement has built up that is getting well known, particularly among financial specialists with minimal earlier venture understanding or who have constrained capital.

As showed by Cofnas (2013), this early market suggests where the retail forex showcase was eight or 10 years back.

It is another speculation elective with minimal effort passage where all trading is led over an electronic, constant stage on which clients can exchange with a basic snap of the mouse.

Up to this point, they were difficult to gain, however another age of online electronic trading stages, just as a few market advancements intended to disentangle the trading choice, are creating fervor and movement in retail binary options trading.

Although it acknowledged the principal exchanges on the CBOE (Jaworski, 2006), today by far most completed on the Over the Counter markets (OTC).

OTC is a strategy for trading when showcase members exchange straightforwardly together.

Practically, the counterparty of most of the exchanges is one intermediary.

As expressed by Miyake, by any stretch of the imagination. We well know binary options in OTC markets for supporting and hypothesis.

They are likewise essential to financial designers as building hinders for developing more mind-boggling option items.

Binary options are a fascinating venture instrument, yet In addition, a significant device for structuring complex financial subordinates, for example, the value connected protections (ELS).

They can even shape the premise of a few color options, for example, resource or-nothing options, super-share options, whole options and so forth., as expressed by Kim Jong-Joong, by any means.


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Very Nice Article !
Very Nice

Algo Trading 101 for Dummies

Algo tradingAlgo Trading Business for Us

Here’s an endeavor to portray the Algo Trading business in layman’s terms.

How about we split the expression into words “Algo and Trading”, as you may definitely know the word Trading here represents the activity of purchasing and selling stocks in the capital markets, though Algo here represents the term Algorithmic?

On the off chance that you definitely realize what an algorithm is, you can avoid the following section.

An algorithm is characterized bit by bit set of activities performed.

Suppose on the off chance that you doled out an errand to drink water from a jug, the algorithm or set of activities for that will be — to get the water bottle, open the top, drink the water, close the top and spot the container at the opportune spot.

Straightforward. So also in a PC framework, when you need a machine to accomplish something for you, you clarify the activity by setting guidelines for it to execute.

Also, that procedure likewise called programming a PC.

Huge numbers of you may definitely realize that before the electronic trading assumed control over, the stock trading was primarily a paper-based action.

There were genuine stock authentications, and one should have been present there to purchase or sell stocks.

And afterward, there was dematerialization(DEMAT).

Real testaments were gradually being supplanted by their electronic structure as they could enroll or moved electronically.

What’s in store with Algo Trading?

It expanded the vacillations in the stock-costs since now the trading procedure was quicker.

At that point, with the innovative advancements, came the following enormous thing — ALGO TRADING.

You can compose an algorithm and train a PC to purchase or sell stocks for you when the characterized conditions are met.

These customized PCs can exchange at a speed and recurrence incomprehensible for a human merchant.

This procedure can be semi-mechanized or totally computerized and this is the reason the terms robotized trading and Algo trading used conversely however are not really the equivalent.

In the following segment, we will examine how they are not the same as one another.

Algo trading 2

The contrast between Algo Trading and Automated Trading

Mechanized Trading is frequently mistaken for algorithmic trading.

Mechanized Trading is the supreme robotization of the trading procedure.

Here are choices about trading additionally taken by PC programs.

This implies the request consequently made, submitted(to the market), and executed.

The robotized trading offices normally used by flexible investments that use exclusive execution algorithms and exchange through Direct-Market Access(DMA) or supported access.

High-recurrence Trading(HFT) is a subset of mechanized trading.

Innovation has made it conceivable to execute an exceptionally enormous number of requests in no time.

Such quick exchanges can keep going for milliseconds or less. HFT firms win by trading an enormous volume of exchanges.

Unmistakably speed of execution is the need here and HFT employments of direct market access to decrease the execution time for exchanges.

You can likewise investigate this article by Gonçalo Abreu to see how to gather a passage level HFT framework.

To put it plainly, Algorithmic Trading is essentially an execution procedure dependent on a composed algorithm, Automated Trading does likewise work that its name suggests and HFT alludes to a particular ultra-quick computerized trading.


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Very Nice Post !
Very Nice