When I look back at my early sports trading journey, the biggest losses all followed the same pattern. I would suffer a loss; this would then be followed by a bigger loss and then I would have a trade I had no business taking.
In these cases, I was not trading the market or following my plan. I was trading out of frustration.
In my experience there are many traders who go through this phase. However, it is only the disciplined ones who learn to get out of it.
Today we are talking about one of the most destructive behaviours in sports trading/betting and that is chasing your losses.
Chasing is not about money it is about emotion.
People think chasing losses comes from wanting to recover quickly. However, that is only the surface. The real drivers tend to be deeper.
There are those traders / bettors who do not want to “end the day down” They are looking to repair their ego not their strategy.
They also have the feeling that they have been unfairly treated by variance. Many simply lose patience and want to back control of the situation.
Chasing is emotional trading disguised as urgency, and urgent situations are where traders make their worst decisions.
The Market Punishes Desperation
Chasing losses leads to a substantial increase in the amount you are staking. It leads you to ignore your trading plan and making decisions without any solid reason. All this then leads to a complete collapse of process.
It can be compared to trying to sprint your way out of quicksand. The harder you push, the deeper you sink.
No trader blows their bankroll from one bad trade they blow it from the five trades that follow it.
How I Learned to Break the Cycle
The turning point for me came when I realised something simple. My worst trading days always started with one wrong decision, and this was compounded from the fact that I refused to accept that this was a wrong decision.
Once I stopped fighting losses and started realising that losses came with the territory it changed everything. The market then my trading became less of a battle and more business like.
How to Stop Chasing Losses
Now ideally you should be trading from as plan. However, if you are starting your journey, you may be trying out different markets to see which suit your style. Below are a few rules to prevent you from chasing losses.
- Set a daily loss limit and enforce it. Make sure you enforce this as without it, the limit is just a suggestion.
- Define what ends your session. Whether this be a mistake you have made or a rule you have broken. End your session there before you begin to become too emotional.
- Slow your decision speed after a loss. Take two minutes to take a breath. This always beats two hours of damage control.
- Review the first emotional trade of every bad day. This is the moment your discipline is at its weakest. If you can fix this, then the entire day changes.
Final Thought
Losses are part of trading. A disciplined trader can take a hit and walk away with clarity. An undisciplined trader tries to win it back and ends up losing more than money. They lose self-trust. This trust should be protected at all costs.
Remember a single loss will not sink you, a lapse in discipline will. Your goal is not to avoid losing, it is to avoid losing control.
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