Is Day Trading a Form of Gambling? (2024)

Day trading is not a form of gambling. Still, the habit can become problematic for anyone who has previously struggled with gambling addiction. Getting caught up in the emotional highs and lows of trading can cause significant stress and lead to an addictive cycle. The activity can also lead to financial losses, impacting a person’s entire livelihood.

If you or someone you know is struggling with day trading addiction, various treatment options can help. Learning more about the signs can also help you pinpoint problematic behavior before it turns destructive.

About Day Trading

Day trading is buying and selling stocks or other assets within a day or even within seconds. It’s not about investing but taking advantage of the up-and-down price movements during a trading session. Day traders must know the technical analysis of price movements and often use various strategies to exploit market changes.

Day trading is most common in the stock markets. Successful day traders are often well-educated and well-funded, typically adding risk by using leverage to increase the size of their stakes. They are also attuned to events that result in quick market moves. As a result, many will trade based on the news or scheduled announcements, like the release of economic statistics or corporate earnings.

Gambling vs. Day Trading

The main difference between day trading and gambling is that gamblers play available odds while traders strategize based on market trends, price movements, and past performances. Traders often use sophisticated analytical tools and real-time market updates to decide which stocks to buy or sell and how much to spend.

While day trading is not considered gambling, some people find it easy to get caught up in the ups and downs of the activity, whether winning or losing, as the thrill can bring a rush of adrenaline and lead to an addictive cycle. The behavior can also lead to significant financial losses, which may motivate the person to continue hoping to recover them.

Like traders, gamblers take a small amount of money and risk it for a higher return. They might also leverage these with other securities, like futures. Both activities involve quick decisions for a huge profit or a substantial loss, with the latter being more prevalent in gambling and day trading.

The success rate of day trading is low due to its risk and requiring considerable skill. Good timing and luck can also play a huge role. Some studies show that 80% of day traders fail within a year. So, day trading is not gambling, but both often come down to chance and can lead to significant financial losses and problematic behaviors.

Signs You’re Addicted to Day Trading

Though problematic day trading and gambling addiction are different, both can share similar signs and symptoms. Its fast-paced nature can also become stressful — traders must act quickly by looking at what the market tells them and responding immediately. When the incentive becomes getting a dopamine-induced rush from making a trade, day traders become gamblers in the stock market.

Here are some signs your day trading habit has become problematic:

Like gambling addiction, day trading addiction can develop when a person attempts to recover their losses by continuing the activity. Excessive day trading might also be linked to a history of depression and anxiety and pleasure seekers might be at higher risk of engaging in day trading or gambling.

Traders can, like gamblers, learn to associate their behavior with positive reinforcements — money. Both also involve negative reinforcement. Trading and gambling might help people avoid boredom and escape their worries. While day trading in itself is not addictive, gambling behavior is — stocks just provide the action.

How to Get Help if You’re Addicted to Day Trading

A day-trading addiction can impact your daily life, leading to financial loss or disruptions to your work, relationships, and emotional health. Fortunately, there are ways to find relief, such as seeking professional addiction treatment or attending therapy.

You might also try the following tips:

Discover Compassionate Treatment at Gateway Foundation

When you’re struggling with day trading, counselors and treatment centers certified in treating gambling addiction can be helpful. At Gateway Foundation, we can address all aspects of your addiction to get you started on a healthier, happier path. Cognitive-behavioral therapy (CBT) might help you discover any underlying stressors contributing to your pathological day trading. And for those struggling with other addictions or conditions like depression, professionals can provide a dual diagnosis and get you started on a treatment plan that addresses all facets of your situation.

To learn more about our treatment programs, contact us today.