Learn from how you bet on horses

WITH the race that stops the nation just a few sleeps away, perhaps you’re tossing up who to back as the next winner of the Melbourne Cup.

While you may be thinking that one bet on a race isn’t going to break the bank, remember there’s something more important than the chance to make a few dollars.

It’s the way you think about a bet on a horse race that provides a window into how you’re likely to make other financial decisions. For a trader this understanding could be critical to your success.

Remember that our personalities really show up when we make decisions — from the simplest to the more complex. This means that your personality could have a significant impact on your odds of winning in a much more important race to build your wealth.

So, if you are going to have a bet on the Melbourne Cup observe how you choose a horse. Will you take a punt on the favourite just to be in with a better chance? Or will you choose a risky bet on the basis that the prize would be better if the horse wins? Perhaps you lack the confidence to make a decision and have decided to let someone else who knows more than you make the choice. Maybe you’ve already decided not to bet, thinking that way you can’t lose.

I meet a lot of would-be traders who don’t make good choices, which has stacked the odds against them. What is really strange is that they ignore what will give them the highest probability of success, which is the right knowledge and the opportunity to understand how to better manage themselves and the decisions they make in the market.

What do we expect in the market? This week the Australian share market continued to rise above 6030 points, with energy, materials and industrials driving the charge. The All Ordinaries Index is heading towards short term resistance at around 6070 points and could push higher. DALE GILHAM IS CHEIF ANALYST AT WEATH WITHIN