Not that this is news to anyone who trades, but:
"A small group of scientists, including some psychologists, say they are starting to discover what many Wall Street professionals have long suspected — that people are hard-wired for money. The human brain, these researchers say, responds to high-stakes trading just as it does to the lure of sex. And the riskier the trades get, the more the brain craves them.
French prosecutors have likened Mr. Kerviel’s trades to a drug habit. That is no surprise to Brian Knutson, a professor of psychology and neuroscience at Stanford University and a pioneer in neurofinance, an emerging field that combines psychology, neuroscience and economics, to examine how the brain makes decisions."
As someone who started on a trading desk, I can tell you from personal experience it is absolutely true. And my transition from trading to research reminded me the period of time when I gave up speedballing heroin and cocaine years ago — the longing, that sense of emptiness, that yearning for the sweet, sweet high . . . hmmmmm.
Where was I?
Oh, yes, trading addictions.
In all seriousness, there is a definite adrenal rush to trading, and the highs and lows not all that different from what gamblers experience. The difference is casino gambling is nearly entirely random, whereas markets have some degree of non-random behavior, thanks to mean reversion and human behavior. Then there are the advantages of compounding.
The full article is worth a read . . .
Craving the High That Risky Trading Can Bring
NYT, February 7, 2008