A day of Reflection

No trading for me today, as I only really get a chance to look at the markets towards and during the weekends. Having an enforced break is no bad thing as it allows me to step away from the daily trading and spend some time analysing what I am doing right and do more of it, and also to analyse what I am doing wrong and try to eliminate it.

Yesterdays single race £20 loss was painful but in a way I am glad it happened. Success in trading conspires against you as much as failure so obviously does. Success lulls you into a false sense of security and encourages greed and impatience. Despite continually reminding myself that it couldnt continue, I deluded myself into thinking that I had stopped losing races!

So rather than accept the initial £6 trading loss I encountered on sundays 17:05 race at Warwick, (which actually never materialised as the horse in question did not go on to win) I decided to chase the loss by backing at £20 in running. I am sure that if I had not gone on such a long run without a losing race that I would not have made that fateful decision, bizarre as that may seem.

If I look at that initial loss now of £6 I know that I can win that back in 5 or so races at my present win rate, its really no big deal. However the actual £20 loss will take me 2 to 3 days of trading so it really wasnt worth the risk. Fortunately for me the amount hasnt dented my trading book too much but its still a reasonable setback.

I am going to accept losses from now on and I am going to refer back to this post if I have any more doubts about what action to take. I did a spreadsheet today forecasting how the small regular wins I have made so far can add up to substantial sums over time if I just repeat what I have done so far, even including losses. So the moral of the story is to keep focussing on the long term goal of small daily gains, keep moving the tick size upwards as my stake increases and accept the inevitable loss when it happens.