Development and validation of the Trading Disorder Scale for assessing problematic trading behaviors

Area of Science:

• Behavioral economics
• Psychometrics
• Addiction research

Background:

• Growing evidence links trading behaviors with gambling, but existing instruments may not fully capture trading nuances.
• Problematic trading assessment often relies on gambling-related tools, necessitating a specialized measure.

Purpose of the Study:

• To develop and evaluate the psychometric properties of the Trading Disorder Scale (TDS).
• To establish a reliable and valid instrument for assessing disordered trading behaviors.

Main Methods:

• Cross-sectional survey of 403 Spanish amateur traders.
• Psychometric testing of the TDS for reliability, validity, and factorial structure.
• Latent class analysis (LCA) to identify disordered trading patterns.

Main Results:

• Exploratory and confirmatory factor analysis supported a one-factor TDS solution with strong internal consistency.
• The TDS demonstrated good concurrent and convergent validity.
• LCA identified three classes: non-disordered (72.2%), at-risk (17.6%), and disordered trading (10.2%).
• Disordered traders showed higher TDS scores, increased trading frequency, intensive market monitoring, and higher rates of problem gambling, impulsivity, and substance use.

Conclusions:

• The Trading Disorder Scale (TDS) is a reliable and valid tool for assessing disordered trading in amateur investors.
• The TDS effectively differentiates between disordered, at-risk, and non-disordered trading behaviors.
• Further research should investigate the predictive validity of the TDS.