Saturday, 9 June 2007

I'm an idiot!

It's official, I'm an idiot. I managed to break the cardinal rule and have paid the price.

After a few trades, winning a few quid each time, I decided that if I intend to get from here to 100K I had better change my staking plan to something more aggressive. I changed from the current max of 10% of bank up to 25%. The idea was that if the exposure is increased then I need to reduce my risk, in order to protect my capital. So, what did I do?

Next race, I went for a lay on what looked like a rising trend but I mis-interpreted the direction the market was going and after a tick up it all turned round. I should have got out then and there, scratch trade, everyone happy. Did I do that? Nope, I did a classic schoolboy error and thought the market would turn back again. It didn't it went ploughing off. I was on the wrong side.

So, now I was on the wrong end of a rapidly moving market with little time till the off. Did I cut my losses and move on? No, I let it run, thinking (stupidly) that it was a good chance that the horse wouldn't win. So I had gone from trading to gambling. Gambling is not something I am good at. The horse won and half my bank went with it. The rest of my trading time was spent trying to recover whatever I could. Got back a measely £5 (I guess it is 10% of my current bank.

What to do now? I think I'm going to put this down to experience (read: stupidity) and learn my lesson, top up my bank back to £100 and start again.

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