Logic over emotion

[dmbusa]

I am sure this is something all of us have had to do or still need to do, and that is have the logic of trading stronger than the emotion of trading. as an example

the 21:10 at Kempton I was happily scalping Mystical Sapphire when suddenly it's price started to plummet (at the time I couldn't see a reason for this) leaving me with a large open lay position crashed through the stop loss without getting matched.

During this time my thought processes were along the lines of "close it take the loss" "no it will bounce back you know it will" while all the time the price kept shortening.

So basically my brain was telling my hand to press the damn button but my heart was saying don't you dare. Guess which one won and which which horse went on to win the race, and where my bank stands now.


ouch ouch ouch

[steven1976]

For me, a scalp is a one tick movement and therefore you should always get out when it jumps against you and immediately start again. If you stay in it then you are depending upon others to correct a position you have absolutely no opinion on, in regards to the result.

Others may have differing opinions on how many ticks a scalp is but for me its in and out quick and knowing your at the front of the book on both sides. The second you lose the battle its done.

[Iron]

You're not the first person to make that mistake and you won't be the last!

One possible solution is to use stakes that are so small relative to your bank that you'll (hopefully) be fairly emotionally indifferent about bailing out for a loss.

What you want to avoid is a situation where you laid all the money in your account at 2.5, and the price is now 1.5, and you have a lovely choice of taking a huge guaranteed hit or risking going bust.

Tip for newbies: If you're ever find yourself in the above position, save the self-recriminations for later, and hit the red button. At least you'll live to fight another day...

Jeff

So basically my brain was telling my hand to press the damn button but my heart was saying don't you dare. Guess which one won and which which horse went on to win the race, and where my bank stands now.

[dmbusa]

Thank you for the replies,

Steven, I was doing 1 tick scalps as the price had been stable for 5 minutes only moving a tick here and there, then suddenly it started to plummet which is what caught me out and I couldn't get over the surprise of it.

Jeff, I have now cut my stakes to 1% of bank to see if that helps.

Cheers

Simon

[Iron]

Simon

Good thinking.

You won't get the excitement of seeing your bank grow 50% in a single race, but you'll also avoid the despair of seeing it shrink by 50% in a single race...

Jeff

Jeff, I have now cut my stakes to 1% of bank to see if that helps.

Cheers

Simon

[redtra]

Today I got off to a bad start...then it was downhill from then on!

I think i know what i do wrong on days like this, it's like trying to make trades where there are none or at least that is what it seems. It;s as if some days are good and some are not but how can that be?

[LeTiss]

You need real discipline when scalping. I've always leaned more towards scalping than swing trades, and this has been a mental obstacle with my horse racing trading. I'd have 6 nice races, 6 nice greens, then the 7th race would blow all my profits in 30secs

I'm afraid it's not easy to learn emotional tricks from others, as we all have our own weaknesses and insecurities. It's simply something you're going to have to learn to deal with yourself, and find the best ways to implement your strengths within your trading style

[Iron]

Curiously, that's been exactly my experience with scalping, which is why I now swing trade...

Jeff

I've always leaned more towards scalping than swing trades, and this has been a mental obstacle with my horse racing trading. I'd have 6 nice races, 6 nice greens, then the 7th race would blow all my profits in 30secs

[steven1976]

Just out of interest Jeff, why do you seem to concentrate on horse racing?

Its a question Ive been asked in the past and for me its boredom but I wouldn't recommend horses to anyone unless they really know horses. Its not to say I don't do good from it. I can only scalp because I just haven't got the patience to sit and wait. I get stuck in the second I open a market because I know the same thing is going to happen. I just wouldn't Recommended it to anyone when other sports have a more definate direction.

[Iron]

Hi Steven,

I don't purely focus on horse racing, but what I like about pre-off racing is that:

- There is plenty of liquidity (at least with most UK and Irish races).

- You can generally get filled quickly in the few minutes before the off.

- You don't need to know anything about the sport to be profitable.

- It often exhibits nice trends.

Jeff

Just out of interest Jeff, why do you seem to concentrate on horse racing?

[steven1976]

Sounds like you have turned the corner. Last time I chucked 7 quid into the market I aggressively got filled! It was an 80/1 shot and suddenly all the layers decided to offer 300 quid once they got the better side of me. I almost couldn't believe how all the backers lwft

[JollyGreen]

Dmbusa This will probably be a bit late but I think you've been caught by the change in money flow. The problem with evening racing is there is often just the one meeting (unless it's the summer) and people will start to play the meetings early. It is almost impossible to know when the money will increase and that is why it is so easy to get caught out.

However, as already mentioned if you are happily scalping for one tick and it moves against you GET OUT! It can sit nice and still for 5 minutes as you mentioned but once the money starts to flow, even temporarily, it can move the price a long way from your position.

So rather than this post sounding like a "I told you" post I would simply say be aware of the money flow. Keep an eye on the increase of £ per second and when it rises be ready to exit.

[redtra]

Dmbusa This will probably be a bit late but I think you've been caught by the change in money flow. The problem with evening racing is there is often just the one meeting (unless it's the summer) and people will start to play the meetings early. It is almost impossible to know when the money will increase and that is why it is so easy to get caught out.

However, as already mentioned if you are happily scalping for one tick and it moves against you GET OUT! It can sit nice and still for 5 minutes as you mentioned but once the money starts to flow, even temporarily, it can move the price a long way from your position.

So rather than this post sounding like a "I told you" post I would simply say be aware of the money flow. Keep an eye on the increase of £ per second and when it rises be ready to exit.

Is that the same as weight of money Jollygreen?

[dmbusa]

Hi JG

Thank you for the pointer on the evening meetings etc.

Simon

[LinusP]

Dmbusa This will probably be a bit late but I think you've been caught by the change in money flow. The problem with evening racing is there is often just the one meeting (unless it's the summer) and people will start to play the meetings early. It is almost impossible to know when the money will increase and that is why it is so easy to get caught out.

However, as already mentioned if you are happily scalping for one tick and it moves against you GET OUT! It can sit nice and still for 5 minutes as you mentioned but once the money starts to flow, even temporarily, it can move the price a long way from your position.

So rather than this post sounding like a "I told you" post I would simply say be aware of the money flow. Keep an eye on the increase of £ per second and when it rises be ready to exit.

Is that the same as weight of money Jollygreen?

Jolly is referring to volume and volume per second, money is what fuels the markets and thus dictates its direction.