Big wins, just like the big losses can be of great threat to us. I know – they are the aim of our trading and doing anything at all, but we have to understand that having a lot of money fogs and clouds our judgement. It goes to one’s head and sometimes can even have bad consequences. Have you ever thought what bad can come out of the big winnings?
1. You start investing too much.
2. You stop thinking about the real risks.
3. You might become cocky.
4. You start speeding recklessly.
5. You start thinking about giving it all up.
1. You start investing too much.
A lot of money means that you can spare no expense. And having a lot of money means that you are not going to think about saving up and diversifying your expenses. On the contrary. Now that you have a lot of money you can stop thinking about it and make a serious investment.
But the more you invest, the more risks you are taking on, have you thought about that? The more you invest right now, the more you might lose in 15-30 minutes [if you are shorting]. Remember, that while choosing how much to invest, you need to weigh all of the factors in. You have to assess all of the risks and you need to do it fast too.
Do not let big winnings make you think that you can invest all of it.
2. You stop thinking about the real risks.
This first point is the consequence of the following statement – the more luck you are getting in the markets, the less you remember about the risks that the markets pose to us. If you have won a lot of money in, say, 5 consecutive trades, that doesn’t guarantee that you are not going to lose the 6th trade after all.
On the contrary – the more often you win, the closer to another loss you come. That is just the law of the markets and it has nothing to do with your skills and your abilities. That is just how things work.
3. You might become cocky.
We all know people like that – they were amazing, but as life went by they went on to be successful and somewhat rich. They came across money by hard work, inheritance or chance. And that changed them completely. That is the risk that we all are under when we are facing big wins in the markets.
Here, the solution is very simple – never let money go to your head. Having it doesn’t make you or anyone else better than the rest of the people. Never rub your success in other’s people faces, otherwise soon you are going to be left all alone.
4. You start spending recklessly.
‘I can afford it now’. That is the thought that has greased all our minds at some point in time, no sense in denying it. But when you have the money, it doesn’t mean that you have to start buying the most expensive wines, gold watches [although that is a very good way to save your money from inflation] and black caviar. It just means that you have a bigger safety net to fall onto in case of a rainy day.
Remember that reckless spending has been the undoing of millions of people through the years. And you do not want to be one of them, do you? If not, spend as usual and try not to think about your big win as of something to be spent immediately. Better let your money work for you and invest them somewhere 100 percent profitable.
5. You start thinking about giving it all up.
Of course. We all dream about the day we can win our billion and never have to work ever again. But that is pipe dream for a 99.999 percent of us all. And even so, working is essential for making sure that you have a stable source of income and that money is not going to run out any time soon. The recipe to success is multiplying and adding. Not scoring once and stopping. Giving up is a philosophy that is going to ruin you in the end if you let it.
After a big win, do not give up trading, keep on with it and you will be sure – you are not going to run out of the funds. Just trade and spend sensibly.
