The dark side of trading: Risk, addiction, and financial fallout

In recent years especially after corona, trading becomes very famous and handy that it interferes in all financial decision of young professionals. Investment is an essential need to all who is earning or has some surplus money, the terms used in trading like equity, future, crypto, options etc. are common to even teenagers.

Young generation which even do not have any financial setup and knowledge about money management they also invest in market to multiply their money. Smart phones and flooded social media create glamour about this trading setup but there is a dark side also behind this glamour and attracting financial field setup. Many new or even experience traders have to face extreme anxiety emotional trauma and even leads to depression.

Trading setup is not just about increasing or decreasing some numbers and chart patterns, the experienced professionals explain that trading is 20% technical and 80% psychology. So one must first understand the trading psychology of these critical technical setups, when price goes up and down in seconds, with this price movement it trigger very strong psychological reactions in the mind of traders that create fear, joy and frustration. Side by side this constant emotional simulation creates high mental fatigue and after a certain period of time it can leads to anxiety disorder or even depression.

The main causes of these disorders are generally market is unpredictable and influence by many external factors like news, rumors, politics and global factors. When the things go against your favor and you fail, then it is common to internalize, i must know better, am i not smart to understand these, where i went wrong, so i am keeping losing the money, next time i will do better etc.

When this blame game go long one feel worthlessness or hopelessness which is a core sign of depression, and the worst part is initially people do not feel or understand that they are under anxiety or depression.

After sometime the traders behave, like he she is addicted to trading which is same as addicted to gambling, where sometimes there is a win and other time it is a loss, which creates chasing the losses, ignoring the risk, taking long heavy positions and they slowly went to a full blown addiction.

When money is lost guilt and shame is inevitable for those using borrowed funds or hard earns money, this mental trauma is greater which mostly create self humiliation and incompetency.

The major sign of mental struggle are constant worry or tension, mood swing, trouble in sleeping or eating, obsessive thinking about trade, social withdrawal, feeling of failure, thought of self harm. Data says around 60 to 70% retail traders report feeling stress and anxiety, day traders are particularly vulnerable. 24/7 market access in crypto and forex increases psychological strain.

The biggest mistake we do is we forget profit is of no use without mental peace, Trading must be to ease the life not to make it tense. If you are struggling in making profit then you must not do it alone, talk to someone who is professional and experience, make someone your mentor and under his supervision you create your trading journey, so that you can know when to step back, always remember your mental peace is more important than your trading profit.

Dr. Dharmendra Singh is Director, Sanskar Educational Group, Ghaziabad

Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual, not Storypitch. We advise investors to check with certified experts before making any investment decisions.

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