Sports Trading Psychology (Mind Over Matter)

Sports Trading Psychology

Why is sports trading so hard?

When I first started on my trading journey a year ago, I didn’t realise just how hard it was going to be. I just thought it was a matter of learning the trading techniques and off I go to make my millions.

Little did I know then that Sports Trading Psychology played a massive part if I wanted to be successful.

If had known at the beginning of my trading journey just how hard it would be, would I have started? Probably not is your answer but, I’m so glad that I did as I have learnt so much in a year and even learnt new things about myself.

And I do believe I have changed as a person as well, for the better.

 

Sports Trading Success Rate

I have heard that only 5% of betfair customers are successful at sports trading. I’m not sure if that is correct or not, the number is small anyway but, really it is irrelevant.

Knowing how many people profit from trading does not help me understand why most people fail.

To help me understand why most people fail at trading I need to learn the risks that are involved that lead to losses and get the idea out of my head that sports trading is easy.

 

A trading plan

I just want to state before I go any further that you do need more than a good mindset to succeed. You need a solid trading plan.

The reason I went on the trading course was to gain the knowledge of the markets and how to use them to my advantage. So having a trading plan and a strategy then spending the time to practise is also key to succeeding. I will do another post on trading plans in the future.

Having them two skills above….a trading plan and a strategy is vital but, neither is as important as the ability to contain emotion and discipline.

 

What is Sports Trading Psychology?

Psychology is basically the study of the mind and behaviour. It covers a broad area, anything from emotion and motivation to thinking and social behaviour with lots in between.

As a sports trader the 3 most important issues for me are:

  • FEAR
  • GREED
  • DISCIPLINE + PATIENCE

Let’s look a little more into theses 3 problems.

 

Fear

Fear of missing out or F.O.M.O as better known in the trading world, fear of losing or fear of letting a profit turn into a loss, or fear of entering the market after some hefty losses, I have had all these problems and from talking to other traders it seems a common trait.

It’s nice to know that the traders I look up to have all had these problems in the beginning, so my take on it is, if they can overcome it then so can I.

We are humans after all, and it is natural for us to fear something that will cause us pain.

Greed

F.O.M.O can also go in the greed section. Greed is a traders worst enemy, and in the stock exchange they have a saying that “pigs get slaughtered”. I think we have all been guilty of hanging onto winning trades too long, trying to scrape every single tick possible for it to suddenly turn in the opposite direction.

To be successful we have to get rid of that get-rich quick mentality and look at the long term plan.

 

Discipline + Patience

I’ve put these in the same category as they go hand in hand.

One of my biggest problems with trading is discipline and patience. It’s probably the most important of the 3 issues, one I need to master.

With pre-race swing trading you can sit at the computer for ages and not get a trade, for me boredom kicks in and I start seeing trades that are not there. This is where I need to be disciplined.

Jumping in and out of trades for the sake of it is the quickest way to the poor house.

Stick to your trading plan, wait for the right entry, then have enough discipline to act without hesitation. Once you commit to a trade, very little should cause you to second guess your decision. Each time you enter a trade, you should know the maximum loss you will allow.

The key is to know when to trade, and when to avoid trading. Discipline + Patience = Success

Trust yourself and believe in your plan.

discipline in trading

Summary

Sports trading is a mind f**k, I have learnt that much, and don’t think you can go on a trading course, learn the markets and off you go to a life of luxury. If it was that simple then every Tom, Dick and Harry would be trading.

You have to treat trading as a marathon and not a sprint. Teach yourself to be a long distance runner.

Rule #1 Knowing when and when not to trade is important. Sometimes, not trading equals to having a profitable trade.

Rule #2 Stick to your trading plan. Don’t go home after a losing day and try and devise a new plan if that one has been working. Stick to your guns.

Rule #3 This rule is crucial. Learn to be comfortable with losing money. Losing is part of the business. Without losing, there is no winning. You have to accept the fact that you are going to lose trades if you can’t then you will not be a successful trader. The art is keeping the losses small.

Rule #4 Learn from more experienced traders, join communities or forums and follow them. Remember, they were at the stage you are at now when they first started out.

Rule #5 Forget about big losses. This is easy to say and hard to do. I have blown a few banks since I started and it is so painful, it also takes a while to get your confidence back. Looking back, I needed to lose those banks to teach me a lesson.

There is no quick way to success

I know if I want to be successful at trading then I not only need a solid trading plan I have to learn to manage the emotional side of it as well.

There is no quick fix for these problems above, it’s a slow process and a journey where you will learn new things about yourself.

If you want to be in trading for the long term then these points you will have to improve in your life:

  • Get better sleep
  • Eat healthier
  • Stress and worry less
  • Exercise more
  • Develop a growth mindset

Start reading mindset books, there are plenty out there, and talk to people who have been there and done it already who are successful.

I am still on my journey, some will find it easier than others, we all have different weaknesses and strengths. Trading tends to expose vulnerabilities and strengths we didn’t know we had. This game is mentally tough and only the strongest and most determined will survive.

trading discipline

 


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