Mind Games

There is no getting away from the fact that how you think and how you react to different situations will have a big impact on how successful you will be as a financial spread bettor and you should do everything that you can in order to master your emotions. You can usually tell at a glance if someone is having a bad day or not, whatever their profession in life, but if you get into a negative mind set whilst trading the markets it can have a knock on affect which can end up losing you money.

Let’s look at an example, you sit down at your computer for an afternoons trading, you’ve been looking at the charts and are aware of everything that is happening in the economy, no announcements are due and in your minds eye you can foresee a profitable afternoons trading, it doesn’t turn out the way you expected and within an hour your stop loss has been triggered and you are £150 down. Now this is where the difference between a spread betting pro and complete novice becomes apparent, the pro will look at that loss as a trading expense, he will be disappointed as no one likes to lose money but if no other trading opportunities meet his strict criteria he will simply turn off his computer and be ready to fight another day.

With the novice bettor though it will be a completely different story, to say he is gutted would be the under statement of the year, he can’t believe that the price went against him after all of the work he had put in trying to identify a good trade, to make matters worse he was trading with money that he could not afford to lose, he really needed the £200 he hoped to make that afternoon so there would be only one thing for it, another trade of the FTSE and he would have made his money back and more, no problem. I hope you can see where I am going with this because this kind of situation occurs more often than you may think.

The novice bettor ends up losing just shy of £600, he can’t hide his disappointment from his family and the next couple of days are miserable for everyone concerned. The pro trader meanwhile, you know, the one who walked away ended up having a very profitable week, up £1200 and life really couldn’t be better. He knows only to well that there will be more losing trades over the months and years ahead, he is fully in control of his emotions and he is confident with whatever the markets care to throw at him.

I would go as far as to say that the right mind set is so important that if you have anything bothering you, it would be a good idea to get whatever it is sorted and put off trading for the day. I agree that some people are able to switch of completely when trading but for the rest of us, know when to have a break so that your head is right to go into battle with the markets.

The FTSE, Dow or whatever it is you are trading will still be waiting for you when you’re ready, the opportunities that you have spotted today will come around again, just as sure as night follows day. Remember that and you won’t go far wrong and before you know it you will be trading like a pro, and making the profits that go with it.

Leave a Reply