The KOSPI has fallen for five straight sessions, bringing it close to the 6,000 mark, and more investors are turning to psychiatrists over their trading losses.
The KOSPI closed at 6,035.35 on the 13th, down 348.89 points, or 5.46%, from the previous session, according to the Korea Exchange. A sharp drop in semiconductor shares and heavy selling by foreign investors pushed the index to the 6,000 level during the day and triggered a sell-side sidecar for the first time in 55 days. The KOSDAQ ended at 837.03, down 12.16 points or 1.43%. It was the fifth consecutive session of declines for both markets.
Three Days of Losses Can Amount to PTSD, Doctor Says
Park Jong-seok, a psychiatrist who specializes in treating stock trading addiction, describes a common pattern among investors who seek help during market crashes.
The damage is greatest among those who opened their first brokerage account during a rally, Park said. Having never lived through a crash, they have no immunity, and the experience leads to severe depression and panic symptoms.
Park also noted that the dorsal anterior cingulate cortex, the part of the brain that registers pain from a stab wound or a burn, is the same region that processes FOMO, or the fear of missing out. Once losses pile up for more than three days, he said, investors feel a despair and depression that in psychiatric terms amounts to post-traumatic stress disorder.
His prescription is simple: delete the trading app and stay away from news and social media for two weeks. Not looking at the account for as little as two or three days, or as long as two weeks, is what allows investors to recover even 20% to 30% of their concentration and judgment, he said.
Park has been through losses himself. In a past broadcast, he disclosed that he lost 320 million won (about $220,000) while struggling with trading addiction. Instead of blue chips, he bought and sold theme stocks and what he called junk stocks, swayed by other people's calls, and then turned to futures and options to recoup the losses, only to fail again, he recalled.
Experts consistently stress two points: do not invest with borrowed money, and do not buy shares in financially weak companies simply because they look cheap. The standard advice for a falling market is for short-term traders to cut their positions and for long-term investors to stick to a fixed schedule of splitting purchases mechanically according to a set ratio.
Investors experiencing depression, insomnia or suicidal thoughts after trading losses can get round-the-clock counseling through mental health crisis hotlines or suicide prevention hotlines.