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Every day there are thousands of people entering the potentially lucrative world of trading. Unfortunately most of these aspiring traders will ultimately fail to become profitable over the long term. In some cases this may be because they don't have the skill or knowledge to find profitable positions, but mainly it will be because they lack discipline. It doesn't matter what area of trading it is, whether it's spread betting, CFD's, or betting exchanges, for example, if you don't have discipline then you will not succeed. This is an important lesson that I learned very early on in my trading career. I was a full-time Betfair trader for four years, and although I have always been very disciplined, there were a few occasions, particularly in my first year, that I committed the cardinal sin of chasing losses. This is something you have to drum into yourself not to do, otherwise the results can be catastrophic for your bank balance. I taught myself to just walk away from the computer if I suffered a significant loss, and to come back refreshed and focused later on. This is particularly important if, like me, you trade the hourly financial markets on Betfair. This is because if you lose a lot of money on one hourly intraday market, then it is very tempting to lump on at the start of the next hour and try and win it all back. For example, say you lost £1000 in the 9.00-10.00 FTSE market. At 10.00 you could easily back up or down for £1000 at close to evens, to try and cover this loss and win it back. Sometimes you may get lucky, but if you lose, the downward spiral can escalate, and again where do you stop? £2000 on the next market? If you are disciplined you would have walked away after the £1000 loss, or simply continued trading in your usual way. Not trying to win back the £1000 in one go, but using your trading techniques that you have profited from in the past to win it back slowly. My biggest ever loss on Betfair was about £3200. It wasn't from bad trading either. It was simply down to the fact that I was late for a dentist appointment, and in my hurry to close out a position inadvertently pressed the wrong button, and in a split second had guaranteed myself a loss of around £3200 whatever the outcome. Possibly the most expensive dentist appointment ever. As you would expect, I was completely devastated, but thankfully by just employing my tried and trusted trading methods, I managed to make about £4500 the following month. I didn't try and win it all back in one day, but simply told myself to remain focused. I had made good profits in the past, so there was no reason why I shouldn't win it all back slowly over time. To conclude, whatever area of trading you specialise in, if you are serious about being successful, then you must be disciplined. Pin a note next to your computer telling you to walk away if you suffer any losses, or whatever method you choose, just stay focused. Think of occasional losses as being an inevitable part of trading. Compare your trading profits to long-term stock markets. Over long periods of time they will generally trend upwards, but not necessarily in a straight line. There are always dips along the way.
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