Many years ago I read a book called “The Willpower instinct” by Kelly McGonial. Some recent events prompted me to check it out again and read a little more about addiction and the role of dopamine. I found that the information on the web is (still) quite scattered and it was difficult for me to summarize it without writing it down which is how this piece came to live.
Almost certainly every human being can recall having strong feeling of unbearable expectation to eat/drink/smoke/do something they "like" (or think that they can't live without). We have even coined a word for it - "crave" and the way we see it - it is almost impossible to make any other choice than to go for it. Does this sound familiar? If it seems about right then you might be interested in what follows
When we chase something attractive, dopamine is released in our brain. Dopamine is a neuro chemical which is absorbed by the brain areas responsible for attention, action, desire and (as recent research shows) reward. Various scientists (including Marc Lewis, PhD) have arrived at the conclusion that we can become addicted to the dopamine release.
If we become addicted to something (e.g. drugs, alcohol, cigarettes, etc) soon the release of dopamine is controlled by the anticipation of getting more. This is the strong feeling I mentioned at the start. And the more times we go through this process the stronger the feeling gets.
An article published in the Journal of Neuroscience suggests that increased levels of dopamine make us more likely to opt for instant gratification, rather than waiting for a longer term reward - for example we choose to eat a chocolate bar instead of skip it for the longer term of reducing your weight. The strong feeling of anticipation that releases dopamine makes us choose short term rewards.
Another important detail is that the decision to choose short term rewards is processed by one part of our brain (some call it the reptile brain, others the chimp brain) and considering the long term reward by another (the human brain). This is why we can get a feeling that we're having an internal battle or at least hesitating when having to make a decision what to choose.
And here's an useful tip: Decide to go for it but in 10 minutes. What happens then is that in a few minutes your human brain gets a chance to take over and you are much more likely to make the correct long term decision according to your long-term goals. Apart from learning a little bit more about how our brain works I've found the "Yes, In 10 minutes" suggestion to be quite useful - so why not try it yourself and let me know how it goes? Inevitably the same works for traders, including crypto traders. Don’t let anticipation rule over your mind. Use this technique to make better investment decisions.
