I have been following a weekly documentary on one of the lesser known sky channels called Everest - Beyond the Limit. This week concentrated on two climbers who were on the final climb to the summit. They were tantalisingly close to the top but their progress was very slow and for every step they took nearer, they were getting weaker and hypoxia was starting to set in. Hypoxia literally means "deficient in oxygen" and is a shortage of oxygen in the body.
It was clear that if they didn't turn back immediately they wouldn't make it back down the mountain. The lack of oxygen to the brain was giving them poor judgement and making it harder for them to make the correct decision to abandon their quest as they didn' t realise the massive danger they were in! Thankfully they had people around them who made them turn back and made sure they got down as quickly as possible.
At times trading can feel like a slow but careful climb up a never ending mountain and when a loss is encountered the first thing that comes into the mind of an undisciplined trader is to make that loss back as quickly as possible. We all know that the correct decision is to ignore the temptation to chase and to continue with the strategy that brought you half way up the mountain in the first place but much like the climbers, poor judgement sets in and we make decisions that we know are wrong but make them anyway as all sense of reason and financial safety are not even considered. Thankfully unlike these inspirational brave climbers, we won't die if we ignore the symptoms but we will have an empty bank account that can have a lasting affect on ourselves, family and general life.
Like most, I do have a chasing problem but luckily my general strategy seems to be strong and the wasted losses are not more than the gains. Sundays bad performance continued into Monday. At one point I was up almost £100 on the horses but that disappeared very quickly and I was soon in a loss situation. Added to this was poor judgement in the cricket and football which contributed to an overall loss of £114. On Tuesday I made a concious decision not to trade the horses and just put all my energies on the Essex Lancashire game which gave me a £48 profit.