The truth about why you keep blowing up

The common culprits as to why capable traders often end up back at zero.

Good morning valued subscriber,

Last weekend preview was a clean sweep as both B2L trades advised landed. Previews will typically cover golf, mma/boxing and cricket occasionally. All previously advised trades will also be archived where you can track entries and returns. To access my previews, consider upgrading your subscription to premium!

In this post I want to detail the most important reasons as to why I believe traders blow up. My conclusion is not only based on my experience but confirmed from others I’ve either mentored or interacted with.

MISPLACED EXPECTATIONS

The first and almost immediate issue that destroys any budding traders hopes of long term profitability is due to misplaced expectations. This typically involves setting daily, weekly, monthly or even yearly targets.

I draw a clear line between projecting what you can reasonably expect to make based on previous years results, level of staking and general ability with setting a target that you expect to make. ‘Expecting’ to make money is a sure fire way to blow up because rarely do events trade exactly as planned. There's always some unforeseen circumstances and outside variables that come into play which you can’t account for. There will be many events throughout the year which do not trade as expected, for better or worse.

If you trade an event, expecting to hit a pre defined target, you may finish an event with less profit than expected despite trading very well which can lead to disappointment. Misplaced expectations often lead to disappointment, which leads to irrational behaviour like forcing positions through, over trading and over staking which leads me to my next point.

OVERSTAKING

Over staking is a habit that typically follows on from misplaced expectations. It is so hard to stick to a regimented staking plan because greed is wildly tempting when things are going your way. Streaks are apart of the game and it just takes 1 market you over staked on to move against you & wipe yourself clean. And if you do survive a big hiccup, not many people have the mental faculty to reset and wait weeks or months to claw back a loss that happened due to a 10 minute mental lapse.

When you understand human psychology, when you have experienced luck and disaster in equal measure, you will soon realise that the bitterness of a catastrophic loss outweighs the euphoria of any big win. Sticking to staking limits no matter how tempted, is what ensures survival. Survival should be your priority.

Disastrous losses are the easiest way to spiral you’re staking out of control. Accepting a loss that’s undone months of hard work is a pill most can’t swallow. The temptation to revenge trade is too overbearing for most.

You are literally a trade away from the poor house. Not because of any loss in and of itself. A bad loss is bad enough. But it’s the ripple effect, the toll it takes mentally. The demons of greed and fear appear in peak form when you’re at your weakest.

Sharing the above screenshots give a glimpse into my results over the last couple of weeks up until writing this post. I’m sharing to show that every event was planned, the risks were understood and the staking was planned accordingly before hand.

When you’re handling risks as frequently as I am, almost daily, losses are inevitable & subsequently sprinkled around my P&L. But what should stand out above all is that no loss was out of control. No trade took more than a handful of trades to make back. My results for the most part are within a tight range. The biggest wins were test games which were traded over several sessions. This is just 1 sport. My results on other sports are similar. No spectacular individual results. No game changing, life changing wins. But on the other hand, there were no catastrophic losses either which as aforementioned, tend to lead to further losses. What you see here is consistency, brick by brick, market after market, repeat execution. The beauty of this style of trading is that ANYBODY can do it. You don’t need to be right at the conclusion of an event. So much can happen between the start and finish line. You only have to be correct for a few moments in the game.

The reason why I’m able to trade in such a manner is because I have the psychological aspect configured. When I mentor students 1 to 1, they are often surprised by my lack of sophistication with regards to my setup. There’s no magical tools. There isn’t years of back data or secret inside knowledge. Just a handful of edges, that I’m able to stick to consistently without being knocked off track by the psychological demons that most people succumb to. Whilst I reveal my setup and edges, the magic lies in being able to stick to it and that’s where I focus my teaching (you can enquire about 1 to 1 coaching at www.anymantrading.com).

In this post I have detailed the symptoms of incorrect thinking. In the next premium post, I will detail the root causes of what leads most traders, even capable ones, into these same psychological traps.

Speak soon.

AT