One of the fantastic things about our one to one coaching threads on the forum is that members are able to share personal stories with us about their Betfair trading, without others seeing it. This allows us to get a deeper and therefore better understanding for them as traders and, more importantly, how to help said person.
The other benefit is that common issues come up and present themselves as obvious areas that many traders need to address. What I am going to talk about today is one such area.
Have you ever traded an event, say a football match, and mismanaged the trade? Have you had a set plan about what you will do when 'x' and 'y' occur but not stuck to it, and, in the process have lost more money than you should have?
I would say every trader has fallen victim to this at one point in their careers. The simple solution is just to stick to your trading plan but this is not the point I want to discuss today.
There is a big error most traders have made in this situation and that is that they do not leave the market alone once the initial mistake has occured. Rather than moving on to a different market/game they desperately try to claw back their losses making counter trades on the same market. Often risking a large portion of their bank just to break even if it does turn around for them.
Have you ever found yourself say risking £100 to break even on a trade when you had only risked £10 initially? You have gone from a position of little risk to potentially make a profit, to a position of big risk just to get back to £0. On the face of it it is kind of nuts!
Why does this happen so often?
As human being we are psychologically opposed to loss of any kind. Be it financial, sporting or in our personal life, we are told from a young age that a loss is bad and therefore we should do everything we can to prevent it.
- Think of the person in hospital being kept alive purely be a machine, little to no brain function their life support is often kept on at a family's request because this is deemed better than accepting the loss of life.
- Think of how pissed off you can be when your team loses or you lose when playing a sport.
- Think of how much it would hurt to lose all your money and go bankrupt. I think you get the message!
As we do not want to lose, when we stare at a red screen our brains automatically want to make it green again or at least to break even on the trade. The problem in this instance is that we made a bad trade out of ill discipline, therefore, how can we trust ourselves to re-enter the market and not do it again? The truth is we cannot.
So how to we avoid this situation and make sure we do not chase our losses?
The most common mistake traders make is to stay on the same screen, in the same market and event. Rather than switching to a different game or just getting that damn horrible red figure out of their face, people jump back in and try to attack it and get rid of it that way. If you find yourself in this position (you all will at some point!) here are three things to do:
- If (and that is a bif IF!) you still feel OK in terms of your ability to be discipling in the moment, then switch to a different game. Go to your next planned trade on a different match and forgive and forget the mistake you made on this market.
- Do not move away from your usual staking plan. A lot of people up their stakes to try to recover their money instantly, this is a big mistake. If you are a good trader you will make the money back in time, there is no rush.
- If you are angry or pissed off, just switch the computer/phone off. Tomorrow is a new day, go and watch TV or something (not sport!).
These are really simple rules to help keep your discipline in check. Remember, if you cannot do these things you will lose money.
The good news?
You are a member of Betfair Trading Community, the place where we help traders become better at their trading. The simple fact is you will have a much higher chance of making money from trading if you learn from us and follow what we preach!
I hope this helps!
The reason I say all of this is not to have a go at anyone but to help. If this does help you let us know through the usual contact methods.
Like the sound of private trading coaching?
Sign in at our site and then head over to the forum: https://betfairtradingcommunity.com/en/
Watch this guide once on the forum to see how to create you personal coaching thread: http://forum.betfairtradingcommunity.com/topic/1388/how-to-use-the-private-coaching-forum
As our members know we are always looking to improve our service here at BTC and continue to make you money!
Here are the main things we are currently working hard on for you:
We are working hard on the Horse Racing software hoping for a post football season June release!
We are working on editing the member's filters we share with you all and making sure we have the best ones shared, we also want to add them to the strategy section with explanation videos and the day's selections hosted all together.
That’s all for this week so look out for another post next week!