Stock/Option "trading", I mean, gambling

Good points, tbone. I am aware I cannot beat the market as a simple trader. Not even speaking about casinos. The casino has an advantage against a rational player, but a compulsive one like us is doomed.

And as a investment broker: I was good at advising my clients. Made cash for other people, at times even on the shorter term markets. I guess the reason was that my emotions were off the table. Different story on my account.

Speaking about reason for gambling... I am also doing financially better than my peers, however I have also this desire of making the fast buck. Probably the fact that I am originally from a lower class family, but I made my way into the better world by hard work has to do smth with this. I remember the founder of Glencore saying "I just love the feeling of making money". I think exactly the same. I feel good when I make money, whether it is from gambling or not. Currently, by managing to stay away from gambling, I love the fact that paychecks are adding up in my bank account.
Funny enough, I reside in a country where this is considered bad and appropriate.

I am looking into opportunities (like entrepreneurship) where i could use my skills without gamble. I am just afraid that at some point I might take unreasonable risks again.
My conclusion is that additions related to all these things: blackjack, sportsbooks, roulete, trading - have one thing in common: we stop being rational and quantifying the risks in the same way as if there were no money involved in the game.

Wondering if this is curable?!

setor wrote:Wondering if this is curable?!

What I was told about gambling addiction: curable - NO; manageable - YES
Take it one day at a time. There's a user on here by the name of 'youneverknow' who has a really good blog. It's a good read if you have some time about how he kicked his gambling addiction. I've been reading it since I've been trying to quit gambling. Between this forum and GA meetings and the support of my family and friends, I feel like I'm on a better path although I have a work conference in Vegas in a couple weeks where I will be stuck with no car in a secluded casino for 4 days. I am dreading it - fortunately, I have a good friend who is flying in from Dallas to hang out with me for support and just to visit (although she will be by herself all day while I am in class). THAT is a GOOD friend! Again, I wish you much luck!

I stumbled across this forum while googling for large day trading losses and I feel compelled to share my addiction and recover story.

Within about 8 months last year, I lost $10,000 to day trading stocks and options. I'm in my early 30s, don't have a high paying job, don't come from a wealthy family, and had a ton of student loan debt (over 6 figures from getting an advanced degree), so $10,000 is a lot of money to me.

I began innocently enough. I had bought a couple of blue chip stocks and held them for about a year and subsequently made some money. I got greedy and began reading books about swing trading, which made me realize that the "buy and hold" strategy is no good because you can't make big money that way (in hindsight, "buy and hold" is the only way to make money), and that if I just learned certain strategies, I can multiply my money much quicker. From swing trading I began day trading stocks and options.

When I started I didn't have a method. I was mainly following guys who posted their trades in real time on a popular stock trading website/forum. I don't know how I could have been so clueless following these strangers on the internet. I have an advanced degree, I'm cautious, and I'm not the type who believes in astrology or psychics. Yet, there I was, following strangers' trades when I knew nothing about these traders' credentials or history, and no way to verify whether they actually made money or not, I just took their word for it. One guy claimed to have turned $10K into $1M in a year, and I couldn't wait to be "skilled" like him (he has disappeared from that forum now, mysteriously). In the end, this was all a bunch of BS. After a few months, I began developing my own strategies, studying charts and patterns and indicators, and subscribing to some newsletters that claimed to know how to decipher charts and patterns. Again, I find all this stuff to be total crap now when I look back on it.

I began day trading because I wanted to make a lot of money fast. I hated my job, I wanted to work from home, set my own hours, be my own boss, and love my job for once. What I didn't realize was that I didn't "love" trading. What I loved was the highs, of getting a "hit." I was never a morning person, yet I woke up at the crack of dawn in order to trade on the West Coast time. I had mistaken this need for a high as a "loved what I do so much that it's the only thing that gets me out of bed that early. I've always loved gambling in the casinos but that has never been a problem for me. I guess I was also very bored and wanted excitement in my life. That's how I began day trading.

My first options day trade I lost $1K. On "good" days I lost a couple of hundred dollars. The most I've made in a day was $2K, but this only happened once. On "bad" days I'd lose over $1K. There were many days where I lost roughly $500. I'm so frugal normally and I'm always thinking about saving a buck or two here and there, and am so conservative with my money. And yet with day trading, I'd rationalize and tell myself that losing a few hundred dollars per day is "no big deal" and that losing was simply part of the game. I also rationalized that I am calmer than anyone else under pressure because I was able to stomach these losses gracefully and I got up again the next day to "fight another day." I became obsessed with day trading. All I could think about was how much I made or lost each day, even after the market closed. I lost from the get-go. Every time I won, it was always making up the previous losses. Instead of "I'm up $1K today," I'd think, "I'm only down $5K for the year now." I was playing catch-up from the start, and I was never happy. If I made money I'd regret not betting more and making more. I would hold positions overnight sometimes so that I could get that surprise-high in the morning. I was going into work later and later, or sometimes I would trade at work. I would bet on earnings and buy stocks/options in companies that I had never heard of, hoping to win it all back this time. I kept this up day after day for about 8 months.

I had actually thought that I was a professional in some sense, that I was very well versed in the stock market, and that I was smart enough to beat this thing. I also split up my accounts into different brokerages so I could tell myself that I only lost $4K in each account, rather than admitting that I had lost a total of $8K. I regret my day trading days so much. I would never go out and spend $300 a day shopping in a department store, I almost never splurge, and yet I was losing $300/day on day trading on a very regularly basis.

What finally broke my addiction was that I had gone on a 2 week vacation out of the country where I wasn't able to trade due to little internet access and lack of time. During this time I reflected on how stupid my behavior was and how much money I had lost ($10K by that time). I came back to the US and traded a couple more times, and had finally quit cold turkey in March 2013. I emptied and closed out all my brokerage accounts, and stopped looking at the markets and stopped checking stock quotes for a couple of months. The only thing I dare to do now is buy and hold index funds in my retirement account. That's it. No more day or swing trading of any kind.

Although I have not felt much temptation to trade at all and I've stayed clean, and I've realized the stupidity of my day trading, I often think back and regret all the money I've lost and all the things I could've bought with that money.

Impressive story. I think I was in your situation a few years ago, after realizing how big my losses were.
However after a while of staying clean, I was going to a financial website and then was finding "an opportunity". For example: gold price much lower than at the times I was trading or some stock that you always saw bullish started to go up on the trendline.
Then the thought of seizing that "opportunity" would torture me for weeks, until I would finally go for it with the intention of following a clear strategy and ending up by betting a lot on the market and overleveraging my account.

Bottomline for you: be prepared to have more temptations along the way of getting rid of this addiction. I see stock/option trading addiction very complicated, as the line between gambling and investing in this business is a very fine one.

Thanks for the story the_twist. It is very similar to mine. The stock market and so many companies in this industry that are feeding us "trades" and "investment advice" are in it for one reason only, and that is to take the money we have earned and to give it to them. It is addictive and I understand how anyone can be lured into it, because it is true that it is possible to get lucky and make alot of money. But over the long term, you always lose if you are daytrading, because the little guy is at a huge disadvantage. I hope your post is a lesson for anyone reading this about the dangers of day trading. You may think you win, but you cant, unless you have insider information, which of course is illegal. You can be very thankful though that you have identified the problem and have not let this ruin your life, and you should be proud of that.

For me, sitting there in front of my computer every morning clicking the buy and sell buttons was no different than hitting the play button on the slot machines. I've made up to 30 trades in one day, just trading the same option over and over again. Trading based on the 1-minute, 3-minute, 5-minute (and probably longer time frames too) was just a completely insane way to attempt to make money steadily. What I was doing - the frequent, rapid, buying and selling based on these 5-minute charts, was nothing short of gambling disguised as day trading. They call it "scalping" I guess, maybe for the big fish or those high frequency trading machines, but for an average person sitting at home, I call it gambling.

When I lost, I get this urge, this impulse to just buy it back and try again. These intense urges, feelings of highs and lows, the anxiety, the heart beating, sweaty/shaky hands, I felt all these things so much stronger while day trading than in a casino. In a casino I'd feel embarrassed because so many people are around me and I'm shy. At home, there was no one to witness my losses, my embarrassment, my "need" to trade over and over again, the scummy feeling I felt afterwards.

So far I have not traded, but I think about it from time to time, especially when I feel bad about my financial situation and wish I could somehow get rich quick.

The_Twist, thanks for your post. Yes, although I probably didnt make as many trades as you, I was hooked to my Ameritrade quote screen just like you, often literally staring at the screen for hours (as I tried to carry on my real job). I used to think I was superior to "gamblers" like in the casinos, but in reality it is exactly the same, and we have the same problem as those playing online blackjack or playing the slots in casions, or betting on football. Im sure you get urges as I do, and will continue to. I am actually on this site today because I did get an urge today, but I was able to control it. I saw the stock market making new highs today and I was thinking about shorting (I took away my options trading ability, but I still have a margin account) but thought better of it and came here. I will say the urges have become less and less over time though, and they are almost non-existent now. Tomorrow will be four months for me without a trade, and I cant tell you how much my life has improved. Stay strong, it gets better!

I can relate to everone here , an indian just turned 23 and have lost around 50000$ which if had been invested in real estate instead of day trading could have been 200000$ by now and all along have lost many important years of my teenage life which are fun and most important part of everyone life.

During the vacation of my junior college i was getting bored at home so started reading a novel which my cousin sis had bought for her reading and had kept on sofa it was this book and that time which if i had time machine than i would have changed it, the book was for her reading but instead i read it with full concentration and completed it in short period and the worst part i took it seriously in life the, book was non other but best seller "rich dad poor dad"

I was 17 than instead of having fun with friends those days i got into the impression of book and started research about stock market, daily passing time on web and doing research regarding shares etc for about six month i stopped meeting friends and going out just serfing web and chatting with other market traders etc i was not at all interested in others who were not realed to market, some how i complted my junior college asbi had not started trading .

After taking admission in degree college i convinced my dad regarding stock market trading and opened a demat account in his name and made him invest in it his hard earned money which i didnt valued at that time as i had never earned myself a single penny by doing job , after opening account i use to daily trade on tips of stock gurus with whom i use to chat before , they were very helpfull in my beginning days as on their tips i use to daily loose and gain around 200$ but then after to recover my loss amount i started playing in huge quanyity and loose huge sum regularly and one day on someguru tip i lost all in of the trading money in single day by doing option trade.

After lossing huge sum i stopped trading and convinced myself to do self reasearch and self trade , started thr research and than again convined dad yobput some amount, he was kind and again i started trading, earned a day or two and than started loosing betting high...... and once again account nil in between i got a drop frm degree college at the age of 19 i was trading wild and had completly cutoff from social life no friends no cousin just me and comp

Still lossing big i was trading and and had started reading books on trader psycology to control my greedv, fear etc but all in vain by 20 i had once again got total nil and this time my father and family strictly told me to stop trading and closed the account. By this time i had lost around 45k$.

At that time i was feeling helpless and shamefull as i didnt had money to trade and my junior college friends had their degrees in their hands while i was a dropout , i didnt had courage to join college as everyone would be young to me by 3 years and i had forgotten my social skills talks fun etc.

Just to make my parents happy i took admission in correspondence course and along took a job in call center, right now i am in last year of course and continuing my job, between this three years i had opened srcretly my own demat account and have already lost around 3k$ of my own hard earned money.

Inspite of knowing how easily i make looses by day trading i still have the urge to trade and have a feeling inside that i can earn quick and big money through it and m still saving money to trade which i know is wrong

The main regret in my life is not trading but those minutes when ii took that novel to read just to kill time but instead my life became a big bore

I can totally relate to your regret, aarif, regarding your decision to simply pick up a book to read, that then had such long-term repercussions. I wish that I had not, in 2010, used my 2-for-1 "fine dining card" to take my out-of-town friend to the casino to go to their excellent high-end restaurant. At the time, I was totally against gambling and thought it was stupid. I just liked the great restaurant. That night, my friend wanted to stop and play one of those slot machines with the cool graphics. I stood and watched, still thinking gambling was stupid and hoping she would hurry up. Then she spied a $10 blackjack table, sat down, and proceeded to win $50 very fast. I said, "Let's go eat." She complained, "You pulled me away just when the count was getting high!" I started wondering -- "You can know ahead of time when the gambling is more advantageous?"

I knew she had been a card counter years ago, but to see her actually win right in front of me was very intriguing. I wanted to know more about how to count cards.

I read the blackjack books she recommended, during the year I waited for her to return. When she came back into town, we went up to the casino together.

All I can say is that this friendship has been very expensive to me. I developed a blackjack addiction. And I didn't have the nerve/bankroll to do the card-counting bet-spread right. I lost a ton of mun.

If I had never known anyone who had been involved in this pursuit personally, I would have never in a million years gotten involved in gambling. I am cautious by nature. But my friend, was, as we say in G.A., she had the Big Shot thing going on. She had all her gambling tales to tell. It sounded like a miracle way to make money.

I just wish I had never gone to eat at the fancy casino restaurant, and taken her with me. Isn't it funny how simple twists of fate can pull us into this horrible world of gambling?

Hello Friends,I can certainly relate to each and every one of you guys,especially to Tbone life tell,
I'm from Israel(soory about my english) and in my mid 40's started gambling in my early 20's in a casino in London ,i remember it very clearly was playing black jack and was gaining few hundreds after a few hrs of game on my way to the cashier saw a table of 100 minimum bet so in 20 seconds lost what i have gained,
After couple of month took a flight to Vegas with 5 K in my pockets and lost every thing on day of arrival ,and made 4-5 trips to Vegas in 2 years and always came back broke.
unfortunately I have discovered the stock market 20 years ago,at the beginning i was doing well for the first year in the local stock market and and made 50$ k profit and wanted to take the profit and invest in real estate ,but off course non of that happened and the stock market collapsed and I lost the 50$k+ most of my own money
not mentioning that I have worked very hard at that time,I needed a change in my life after my lost so i went to university trying to escape from my lost ,the first 2 years at Uni was very demanding and I was very happy in with my life,than on my last years studies was much easier for me and you guessed right i have spend my nights gambling in the local casino ,I haven't played on big amounts but was enough for not doing that good at my studies ,however did graduate from a pharmacy degree,
after my graduation I have started again with the stock market and did mostly option ,one day I have sold naked 10 put option and a day after the Japanese bank went bankrupt the stock market fell 10% the following day and I had no margin left so the bank bought back the option with around 60-70$k
At that time I felt I needed help and that I'm ruining my life,i didn't no what to do and tried to seek for help I knew that I have a serious problem and didn't know what to do so I have decided to make a vow on my mothers grave , god rest her soul in Peace ,so I have actually wrote a note and vowed not to gamble again.
It only lasted 2 years and then i started with currencies with my fathers account (my name was also in the account),he had around 400K$ so I have started only buy converting dollars to euros after 1 year I have made around 100$k as the euro went up sharply,and my apatite grew and i soon started to make forward contracts ranging from 1-2 millions and before any important economic data use to make Gamble ,you guessed ,I had left only 100K$ in my Father's account and was devastated.
Got married with the girl I always wanted and she begged my father which is a very naive guy to take the money from me,but he didn't.I have started to invest in real estate and was doing well i bout a nice apartment and prices went up sharply i have nearly doubled my money,so had one apartment no mortgage and was planing to buy another one using the current apartment for my mortgage so I took more than 500$ K for a mortgage,but the seller raised the price and didn't bought the flat,although the mortgage money of 1/2 a million was available loan for any cause so I withdrawed that money and did only option strategy's ,I used to sell naked put and call option on the S&P index ,it was 2008 September
just when Lehman's brothers bank collapsed within days lost the 1/2 a million $ and another 70k ,I end up owing to the bank more then I have started with,I wanted to buried myself I didn't show up to work since the day I lost and turned off my cellphone,i eat and slept 15 hrs a day for nearly one full year and did nothing,looked myself at home while having a wife and 2 little children,ii wanted to die loosing my flat and work,life and nearly my family.
I started working again a year and a half later,and I must say since the September 2008 I'm a very depressed person,but went on with life working a bit and lots of sport around 4 hrs a day.
On 2011 I have took many option courses and dedicate 2 years of studying it ,I didn't have money left so was playing with a very small amount around 20-30 $ k in 2 years gradually i doubled it ,didn't do any day trading only option strategies,I wasn't happy but at least had something again in my life,
But last month I have lost everything,I don't know what happened to me I took more risk and lost everything a gain,
My life Is a mes,I cant withstand it any more,instead of being Rich I left with nothing ,especially when the apartment I wanted to buy doubled in price,I cant get it out of my mind,I was about to sign the contract every thing was ready,I wanted to buy the apartment mostly to be in debt with a mortgage so I wont be able to play any more,
I have lost 25 years in my life for nothing
Lost every thing I have My family,job,Friend,only my wonderful wife is still with me
Need Help ,can't take it any more,want to quit