Psychology: Probelms & potential Solutions re trading

[npatel999]

Hi All,

I hope paddy (joop123) doesn’t mind if I hijack his topics and introduce a connect thread but with slight different focus. Namely, that we encounter psychological barriers/problems/impediments/hurdles that stops or slows down our progress towards our goals and potential solutions that might exist to overcome this. One of the problems that Paddy cited was (and I’m sure most will agree that it’s a very common problem especially starting out):

Problem: ‘my biggest problem at the moment is accepting that I have made a mistake and when the odds go against me instead closing the trade and accepting a small loss, I let the trade run hoping that the odds come back in my favour (sometimes they do)I then end up making a big loss, this has run my bank down and knocked my confidence’

I have guilty of this in the past when I carry on with open position hoping that things will be alright in the night. While I accept that keep going with particular approach and see how things develop is never bad as its likely to develop your knowledge and experience of how markets work, it is not good practice to continue doing it after experience downside couple of times. You have to put down some tactics/strategies that went the wrong way as experience and learn from it. Its easier than done though.

My solution: I now increasingly think of myself as an entrepreneur and each execution of bets/strategies/trade (may be differentiation and similarities deserves another topic) as a business transaction with a view to making a 5-10% return on my investment. Whilst acknowledging the fact that I may not be achieving this on quite few of my transactions, I’m happy if I make a positive return at the end of the day. I do not expect my to double/treble as most businesses are not expected to grow at such rate and I do not want to be millionaire overnight (if I wanted that then I would be investing/throwing my money on lottery). Treat it as a business with no profit or even a small losses expected in the first two years of trade and start making decent return on your investment after that.

The aim is to get as many problems and solutions associated with the subject of psychology, as it applies to trading on sports exchanges, colleted as possible so that we can focus on real business at hand.

Thanks,
NP

p.s. I think I posted this couple of hours ago so if you see think you saw something similar then please let me know as we need to get that cancelled.

[Bet Angel]

The quickest trick to accepting a loss is not to view it as a loss but to view it as a step closer to your next win.

[lilgreenback]

Hi npatel999,

You have possibly seen in other posts about the book "Trading in the Zone" by Mark Douglas, it has been recommended by a number of people.

After just picking it up and reading the first couple of chapters you can identify and relate to what you are saying and what you are probably experiencing I know I have.

I would certainly recommend it. 18 suids from Amazon well spent.

Regards

LilGB