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Dopamine: How It Affects Crypto Trading Behavior

by Icosuccess
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Dopamine is what most people call the pleasure center of our brain and it does affect crypto trading behavior. Before we dive into that, let’s try to understand what dopamine is. It is actually a neurotransmitter that sends chemical messages to our nervous system and body to help us think, react, or strive for and crave. According to WebMD, dopamine can affect behavioral and physical functions from sleep and mood, motivation to pain processing.

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People often hear about dopamine with regard to addiction; an association of negativity, skepticism and bad habits. We’ve all learned about or seen addiction as a path to self-destruction or single-minded purpose – to catch the next high. Whether it is drugs, alcohol, extreme activities, and yes, even trading, the dopamine kicks in to chase the next high and we become addicted.

So let’s talk about dopamine and trading.

Some people compare trading to gambling, and there’s a good chance you know someone who has a problem with one or both. Trading is not exempt from becoming an addiction so let’s talk about that dopamine pleasure center in our brain and some of the triggers that cause us to “lose our mind” when it comes to crypto trading.

Dopamine Triggers

Let’s first start to understand the dopamine triggers. Take, for example, an adult who tries chocolate for the first time; the smooth texture as sweetness literally melts on one’s tongue. The dopamine causes your body to relax and enjoy, your mouth has never experienced such joy and goodness, your brain is screaming “MORE.”

But one bite isn’t enough, is it? So we take another, and another because you’ve literally had a full-body experience and it must be replicated. Here’s the kicker: nothing will ever top that very first taste of chocolate. From there, it becomes pleasure by association, like having a chocolate after dinner to relax for the evening.

Chasing dopamine

Now, the chocolate example is a natural occurrence of getting a dopamine “high” but drugs like cocaine and heroin is an instant boost to make one feel good, but it often comes at a terrible cost, especially as an addict builds up a tolerance and requires more drugs to reach that same plateau.

Dopamine highs are not limited to drugs or chocolate; your pleasure center is triggered by the chase to feel good. This could be getting likes on your Instagram post, sex, food, amusement park rides, and, among other things, the thrill of winning trades.

Sadly, dopamine reduces from the same stimulant. Remember, nothing can live up to that first experience of that first delicious bite of chocolate. Eating too much can make you sick. So the dopamine chase associated with food might prompt you to try different chocolates or treats to recreate that moment, but there’s a good chance that you will never reach that peak.

Those who set their mindset to understand this have a better chance of coping and enjoying things as they come in a balanced way. Those who only seek the high often find themselves in trouble.

The Excitement of the Unknown
The unknown always gives us a little bit of excitement and angst, but human beings are pretty much wired to experience everything through our senses. Anything that deviates from the status quo feeling of everyday occurrences gives us a shot of dopamine.

For the trader, every day, every trade, every moment is a big question mark. Certainly, analytics can help us be better predictors but really, we know nothing about what’s going to happen next, and that is exciting.

How many times has the market surprised us with a rising candlestick that won’t quit…until it finally does. Some people will chase that asset all the way up. Others cry because they refuse to chase it while kicking themselves for not getting in when they had the chance. Still, other traders leave out the emotion and let their market bots do the work as they tweak the settings with trends and incoming data.

The unknown is exciting, which makes crypto traders keep coming back for more. Where there is an opportunity for loss, there is also opportunity for great gains. That’s what we all strive for.

High Risk Behavior

Dopamine is triggered when people gamble or trade, which could lead to high risk behavior.


Let’s say a crypto trader has $1000 and their goal is to build their portfolio as fast as possible. Chances are, without doing a lot of research or really understanding the market, they will risk too much, if not all of their money.

Now let’s say that person gets a lucky break and they’ve actually increased their money to $1500. That win sure gives a feel-good buzz. Joy. Pleasure. Confidence is boosted. A false sense of security builds. Instead of trading smart, they take the $1500 and do it again, risking all instead of putting money back toward the principal.

The stakes are higher and that increases the excitement even more. And when the loss comes, and it always does, the effects are that much more devastating. Not only have you killed your high, you’ve decimated your holdings on risky behavior. And why? Because it felt good at the time. That’s dopamine for you.

Do you see the correlation between crypto trading, gambling, and addiction?

Taking Control

From a trading perspective, we have to be careful not to trade because of how we feel. Emotion and trading are never good partners. With that said, it’s time to take control of the dopamine high and make it work for you.

Just a side note: Remember that dopamine isn’t bad as long as you can acknowledge the pleasure you get from certain activities but maintain the will to control the more base instincts to chase after more.

When it comes to trading, the goal is to build a solid portfolio and make money so you can find pleasure out in the real world. Take control by taking emotion out of trading.

Deal with historical fact through charts and news; check the analysis and market tools; set reasonable stop losses and buy and sell orders that may give smaller but more consistent wins, conversely stemming significant loss if it goes the other way.

Feel good about your research and smart decisions. You’re still going to get that boost of dopamine when you’re looking at that healthy trade portfolio.

As you sit back and consider your next course of action within the crypto markets, start jotting things down in your Trading Journal. Mark how you’re feeling, what tokens you’re looking at, what the market trend is doing. The point of all this is to make you consider why you trade as a trader. It is easy to say, “I am immune to these things.“

But we are all humans and are prone to be affected by chemicals and hormones. To be successful with trading and in life, the key is finding balance. Acknowledge and enjoy the feel-good moments, but don’t let it take over your head.

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