Day trading is very much like gambling

The aim of day trading is to make as much profit as possible as quickly as possible. You do this by buying and selling financial products on the same day. Making a profit can give you a buzz. That buzz is very similar to the thrill you might feel when gambling. But just like with gambling, things very often go wrong. You can lose money; sometimes you even lose a great deal of money.

You can buy and sell all day long. And so you have to make quick decisions time and time again about whether or not to do so. And every decision can give you that thrill. In that respect, it is very much like gambling. When investing starts to resemble gambling very closely, people should be afforded the same protection as they are when gambling. That is not yet the case.

Are there any rules for day trading?

You must pass a knowledge test or suitability assessment to trade financial products online. However, these do not protect you from the risks of day trading. Just as with gambling, day trading carries the risk of becoming addicted, with consequences such as stress, sleep deprivation, lack of concentration, and a loss of contact with friends, loved ones and family. You will also find yourself chasing your losses. This means you’ll put money in to recoup a previous loss. This almost always leads to more debt.

Furthermore, day trading lacks the protective regulations that do exist in gambling. Legal gambling operators are required to monitor people’s gambling behaviour. If you lose a lot of money quickly or increase your stakes, the operator must intervene and speak to you.

If you want to day trade, make sure you familiarise yourself thoroughly with the risks associated with gambling and the ways to prevent gambling addiction. This will also help reduce the risk of becoming addicted to day trading.