Is Day Trading on the Stock Market A Gambling Addiction?

As young as 18, you can open up a brokerage account, dump all your savings in there, and start gambling by buying/selling, short-selling, options trading, etc with minimal-to-no research or strategy in place. Now let’s differentiate between strategic long-term investing and day trading…

Long-term investing typically involves in-depth research into an underlying security so that a compelling logical argument can be made for why it’ll be a profitable investment in the long run. The strategy in long-term investments is usually based on goals and timelines, whereas day trading is based on chance with the end-goal being winning fast money. Sure, there are some expert day traders who are technical analysis gurus and are able to trade in a tactical and disciplined manner, but for the most part day traders are using the stock market like a roulette wheel to make a quick buck by playing the highly volatile price fluctuations rather than focusing on the value and growth potential of the underlying security.

Knowledge, discipline, and due diligence is what separates the gambler from the investor on Wall Street!

Robinhood is reporting millions of new users each quarter in the past year and about half of them are first-time traders. Some who worked for Robinhood had allegedly reported that the popular trading app neglected having adequate guardrails and technology to protect its investors. The reality of the dangers of allowing anyone to play the markets were highlighted when one unfortunate 20 year old user committed suicide because of his perceived monetary losses.

The potential dangers of day trading and playing the stock market game should be emphasized more. Those with an addictive personality and those who are prone to anxiety and depression should be aware that trading stocks can really spiral out of control in more ways than one.

I’ve personally witnessed people start day trading and before they know it, they’re staring at candle sticks and short term price movement all day as time wizzes by, they’re full of adrenalin, stressed, and are neglecting their work and family obligations. One way to spot if you’re one of these types of traders is if you’re very emotionally tied to your investments and you’re chasing emotional highs rather than long-term profit perspectives.

Etrade, TD Ameritrade, Robinhood and other apps are great financial platforms for many, but can also become pitfalls for some. However, this does not mean that we should hold these platforms accountable for irresponsible money management. We have to hold ourselves accountable for the decisions we make and be wise enough to realize if we are falling into bad habits.

At the end of the day, your holdings should be enhancing your life, not adding stress to it. Recognizing if trading on the stock market is right for your personality type and unique financial ambitions is just as important as having a sound investment strategy.

The below video details this and much more; feel free to leave your thoughts in the comments section of the YouTube video below.