In this post, I will be sharing the main reasons and logic behind why you need to get rid of emotion when sports trading. It can be incredibly hard, especially when you are first starting out to contain your emotions when you are sports trading. In fact, this doesn’t only apply to sports trading, it can be any kind of trading or anything where you are leveraging money.
Emotion alters your focus, it can lead to mistakes, it can lead to rushed tactics.
You simply have to avoid it at all costs. However, this is easier said than done.
Techniques To Avoid Emotion When Trading Sports
1 – Think long term
This is a key part of it. Try not to measure your profits each hour, or day. You need to think long-term. Look at your profits as a minimum end of each week and then end of the month.
The good thing about doing this is it forces you to kind of accept that there are going to be ups and downs. Like any business, some days will be better than others. But, as long as the profits are still coming at the end of the month then this is a good thing.
2 – Accept Losing Days
Again, like above by thinking long-term, also trains your mind to accept losing days. It’s inevitable, unfortunately. There is no trading system or trader that I know of that has not had a losing day. Especially in the early days, as when you are learning or building your bank up then losing days are part and parcel of the process.
A good friend of mine once told me to treat losing days like expenses in business. This is a great analogy for it. If you trade all day but come up with a £20 loss just think of that as the day where if you were a café that is the day where you had to order some cleaning supplies and its just something that had to be done to run the business.
As traders we can think like this too.
That £20 loss can easily be recouped the next day or over the next few days no problem at all and as long as your strategy is profitable over the long term then days like this should not be a concern to you at all.
As you can see from the chart above there are some big dips, but the overall trend is going up. The dips are losses but if you have a solid strategy and confidence in your system you know you can recover and carry on building profit.
You have to accept losing days.
Further reading: The Psychology of Sports Trading
Related post: Three Habit’s of An Unsuccessful Sports Gambler
3 – Think of Your Bank As a Tool, Nothing Else
Another great way to rid yourself of emotion is to think of your trading bank simply as a tool. A tool of money that you leverage to make more money from it.
Take your pension for example. That will go up and down in value all the time. But, do you see it? Do you see the losing days, months or years?
Not all the time, in fact, some people won’t even know what their pension is doing from one year to the next but they still get a payout at the end and all being well it is more than what they invested.
You should treat your trading bank is the same. Merely an investment pot that will grow, only some days it will grow better than others, some days it may even lose some money but as long as overall it is growing then it is fine.
Einstein was quoted as saying “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” This is what your trading bank is. Because as it grows so will your stakes and maybe your risk levels. Therefore, effectively compounding it and as long as your strategy is solid and well backed with data over the long term then your bank will also grow.
What You Can Achieve If You Avoid Emotion In Sports Trading
If you can manage to control your emotions or better still avoid any drastic emotions then your trading experience and profits will be better.
I know some sports traders who literally don’t care if they have a winning or a losing day as they know it is all about the long game and they are just leveraging their money.
They simply get up, trade the same way each day using their system or methods that give them their edge and trust it. If they have a losing day then so be it, it is what the end of the month looks like that is important.
If you want a head start in your own trading activities, then check out the Hermes Horse Racing Strategy – it will put you in a very good position.