Ever so often I lose my discipline and start loss chasing after making an "unacceptable" error like letting go in-play, having increased my stakes beyond my set risk and losing, etc.
I've noticed that my motivation to chase losses is that on Betfair (and the internet in general) there are so many opportunities to win money that I find it so difficult to just accept the loss and move on, "Oh I'll be able to win it back somehow".
To anyone who is at peace with loss chasing or anyone who recently has conquered this bad habit, I'd love to hear how you think.
Chasing losses
I did exactly the same yesterday... god knows why. I have been investing for a living for the last 10 years and I thought I had cracked that monkey but maybe not. It is completely unnaceptable and should be avoided at all costs. I do understand though but I'm afraid I can't offer you a golden nugget of advice.
I've also been very guilty of this and it really shows on the Betfair P&L page. If I hit one smallish loss I have tried to get back the money on the next event and inevitably a really huge one often follows (usually by letting a race go in-play or using larger stakes!). That effects my confidence and I lose focus and over trade causing even more losses!
I try now to get out the minute my loss hits a pre-determined max limit I set before trading the event which has helped.
I try now to get out the minute my loss hits a pre-determined max limit I set before trading the event which has helped.
The only advice I can offer is just to keep on remembering how vivid the pain was when you chased the loss and lost more.
I have placed many 'retaliatory strikes' in response to an initial bad trading decision, and these retaliatory strikes have only got me a lot poorer and a lot angrier.
I have placed many 'retaliatory strikes' in response to an initial bad trading decision, and these retaliatory strikes have only got me a lot poorer and a lot angrier.
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Crackerpot
- Posts: 8
- Joined: Thu Apr 16, 2009 11:04 am
Handling a loss (however massive, and I've had a few eye waterers) is all about confidence, confidence in knowing you can make your loss back. When you start chasing stuff its because you feel that your trading is out of your control. Every tick against you is a dagger in your heart. Well its not, its just trading.
I keep records of what I've done, and time and time again the records prove that although the loss hurt I can get it back overtime. And that's the key, overtime!!! Not in the next five minutes, not by letting the trade go in running but by hitting 3 or 4 good positive trades and look at that I'm back into new profit territory.
Everybody makes mistakes, things happen which are out of your control, but keeping a cool head, thinking clearly and positively will get your trading back on the right track.
Cheers
Steve
I keep records of what I've done, and time and time again the records prove that although the loss hurt I can get it back overtime. And that's the key, overtime!!! Not in the next five minutes, not by letting the trade go in running but by hitting 3 or 4 good positive trades and look at that I'm back into new profit territory.
Everybody makes mistakes, things happen which are out of your control, but keeping a cool head, thinking clearly and positively will get your trading back on the right track.
Cheers
Steve
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silvermark
- Posts: 16
- Joined: Tue Mar 24, 2009 1:47 pm
Thanks for the replies guys.
Yes I've come to realize it's about having confidence in the positive expectation in the long run from a profitable trading strategy and not worrying about the shorter term.
Also, to remember that chasing losses outside of trading carries a negative expectation in most cases, or if not, it is at best high variance, and that even then, it is not realistic to expect any win on any given bet.
Yes I've come to realize it's about having confidence in the positive expectation in the long run from a profitable trading strategy and not worrying about the shorter term.
Also, to remember that chasing losses outside of trading carries a negative expectation in most cases, or if not, it is at best high variance, and that even then, it is not realistic to expect any win on any given bet.
Last edited by silvermark on Fri Jul 03, 2009 6:44 pm, edited 1 time in total.
Just gone through a few pages and it's seems to be a very good read. Thank You Peter for the title. Found a pdf version on the net here:
http://www.forex-book.org/trading-inthe ... -download/
http://www.forex-book.org/trading-inthe ... -download/
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TraderGray
- Posts: 36
- Joined: Fri Mar 27, 2009 3:59 pm
I’ve been reading “Trading in the Zone” for a few weeks and nearly finished the first run through, I shall give it several more.
It’s an excellent read and has helped me with my view of trading immensely, I would recommend it to all.
The frightening thing for me with it is the descriptions of poor disciplines that the author lists, well, it was as if he was watching me and writing them down.
Not now though.
It’s an excellent read and has helped me with my view of trading immensely, I would recommend it to all.
The frightening thing for me with it is the descriptions of poor disciplines that the author lists, well, it was as if he was watching me and writing them down.
Not now though.
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silvermark
- Posts: 16
- Joined: Tue Mar 24, 2009 1:47 pm
Indeed what a fantastic book. That is what helped me come to terms with how to deal with my errors at a core level.
I have found that if one must chase loses, only go for half of the losses then revert to normal betting.
It is far less risky & can make a difference to the end result if it goes our way.
It also helps with ones self confidence because we are risking less than trying for the whole lot of outstanding losses.
Cheers.
It is far less risky & can make a difference to the end result if it goes our way.
It also helps with ones self confidence because we are risking less than trying for the whole lot of outstanding losses.
Cheers.
Simple fact. You cannot win them all.
The goal, is to be in profit for your trading session. Some, they see their trading session as a day, or an hour, or whatever time frame. Personally, I see my trading session started from my first trade, and will end when I make my last trade. Goal, is to end in profit.
Chasing losses is a snowball effect. If you lose your first chase, are you going to chase again? Risking so much more?
You have set your risk level at a point for a reason. That is your accepted risk level. By chasing losses, you are going above that risk level, and delving into areas you have already identified you are not prepared to go into.
Back your initial judgement. Don't go over your risk level. Most of all, forget about what happened in the last race. It is irrelevant to the current race, has nothing to do with it. Whether you had your best ever trade, or worst, if you think about it too much, it will affect your next one.
Goal for each race, should be to get the maximum you feel you can out of it, using your predetermined risk level, which you know from the start of the session, not from the previous race. Know you can't possibly have a 100% success rate.
I won't lie, I have a "play" every now and again. But I am in the fortunate position where every time I screw something up, and have a possible liability, I always achieve that liability. Random gambling just doesn't work for me. Helps me not get into that position very often.
If on the other hand, I had experienced great wins from such a scenario, maybe I would be more willing to run the gauntlet again.
Simple rule. Don't chase losses. You already know this, so don't try to justify it.
The goal, is to be in profit for your trading session. Some, they see their trading session as a day, or an hour, or whatever time frame. Personally, I see my trading session started from my first trade, and will end when I make my last trade. Goal, is to end in profit.
Chasing losses is a snowball effect. If you lose your first chase, are you going to chase again? Risking so much more?
You have set your risk level at a point for a reason. That is your accepted risk level. By chasing losses, you are going above that risk level, and delving into areas you have already identified you are not prepared to go into.
Back your initial judgement. Don't go over your risk level. Most of all, forget about what happened in the last race. It is irrelevant to the current race, has nothing to do with it. Whether you had your best ever trade, or worst, if you think about it too much, it will affect your next one.
Goal for each race, should be to get the maximum you feel you can out of it, using your predetermined risk level, which you know from the start of the session, not from the previous race. Know you can't possibly have a 100% success rate.
I won't lie, I have a "play" every now and again. But I am in the fortunate position where every time I screw something up, and have a possible liability, I always achieve that liability. Random gambling just doesn't work for me. Helps me not get into that position very often.
If on the other hand, I had experienced great wins from such a scenario, maybe I would be more willing to run the gauntlet again.
Simple rule. Don't chase losses. You already know this, so don't try to justify it.