Chasing Losses – Why Do It?
Everyone’s done it one time or another, I don’t care who you are. But why?
Chasing losses is a very short-sighted thing to do. In the long run the odds are stacked against you, it’s outright gambling. There can be many reasons someone end’s up in this position, but there’s only really one reason for chasing. Lack of acceptance (of the situation).
If you can’t accept it when you’ve made a mistake you’re pretty much stuffed!
Following my last post about scalping I thought it’d be important to talk about chasing losses. In the earlier stages of learning to trade its more likely it’ll happen. I honestly don’t want that to be you… hopefully the details below will help!
See this popular YouTube clip from earlier in the year…
Breaking the cycle is one thing, but over the longer-term you’ll need to acknowledge what happened and then look at ‘re-programming’ yourself.
Repetition is the best way to re-learn anything. The hard bit is going through the initial stages of keeping disciplined. After a couple of weeks it gets a lot easier…
Understanding the fears that drive emotion when it comes to trading is another good idea. It helps raise awareness and gain self-understanding.
As I’ve said in previous posts. Understanding yourself in the moment really is half the battle, knowing what makes you tick is the best way to avoid making a foolish mistake that even leads you to the position where you consider going on the chase. I believe that; focusing on yourself and your own behaviour is the best place to start. It was a big moment for me, and if I can do it, anyone can!