Scared to Lose? What Are You Afraid Of?

For some reason, most people are scared to lose. Perhaps it is an ego protecting defense mechanism or maybe we're afraid of what others might think of our losses. This phobia mainly occurs when someone becomes too emotionally attached or focused on the outcome. Although it is true that no one enjoys losing, disliking loss is quite different from being afraid to lose. Losing is an outcome, being afraid to lose is a mindset that usually leads to poor performance which culminates into a losing outcome.

How many people do you know who despite expressing desire to approach an attractive member of the opposite sex, does not do so or takes a long time to get the courage to approach that person and when he/she does he/she comes off like a stuttering mess. This is a good example of how being afraid to lose can affect your performance. The worse case scenario here is rejection yet many people blow this outcome out of proportion and suddenly it becomes an unwarranted fear of public humiliation which in turn leads to poor self confidence. In reality, no one will laugh at you for being rejected but when you focus on the outcome, it somehow always transforms into a life or death situation. Those who take rejection for what it is usually fair much better with the opposite sex because they come off as confident and if they do get rejected, they are able to move right on to their next target.

A second example of being scared to lose is when No Limit Texas Hold 'Em players only cash the minimum buy-in for ring games. Strategically it is more advantageous for them, granted that they are decent players, to have as much money on the table as possible so as to maximize winnings when they have a good hand but instead of focusing on winning, they are focused on not losing and playing defensively so with a smaller buy-in they would limit their loss if they went all in. In essence they are scared to lose their money and this in turn usually affects their performance as they are easily bluffed, reluctant to make a move, or win very little when they actually do get a hand. Not exactly a formula for success.

The fear of losing is also very prevalent in all levels of athletic competition ranging from Little League to the Olympics. As aforementioned, the fear of losing stems from being too attached to the outcome of the competition. Instead of being aggressive and confident, the person that is afraid to lose becomes defensive. A good example is a team that obtains a comfortable lead but then completely changes their normal way of play to "protect the lead" as opposed to playing their best game to win. This usually leads to a loss of the lead and in most cases an eventual loss of the match. Heartbreaking indeed.

The final example concerns stock investors/traders. Many people invest and trade in the stock market with a natural apprehension for loss. Despite doing sound research and picking good stocks, the fear of losing causes investors to sell out of their winning positions despite not reaching planned targets or stop losses. This leads to a damaging cycle of taking small losses without taking any big winners. Similar to an athletic team who loses its aggressive stance by playing defensively to "protect the lead"; day traders that are having a good the day who size down or cover positions for fear of losing money are only hurting themselves. They are no longer focused on the process of trading but rather the outcome (Read more about the dynamics of process vs. outcome in this previous post). For those who are too lazy to read another lengthy article, basically that post concludes that process dominates outcome in the long term. Many investors and traders are so obsessed with winning that they are happy with a higher win ratio versus higher net revenue. In other words they would rather win in more trades and make less money than win in fewer trades but make more money. Such an obsession leads to the devastating practice of holding on to losing trades on the hopes that they reverse into winning trades. This is the exact opposite of the proven successful investment strategy to let the winners ride and to cut losses short.

There are many other examples but now let's focus on conquering this malignant phobia:

Ways to Overcome Your Fear of Losing

• Build Up Your Self-Confidence by Constantly Improving Your Skills and Strategies - Athletes should train hard in their sport and Investors should develop a sound strategy for both stock picking and money management.

• You Have a Choice - Focus on Your Performance and NOT on the Outcome - when one tries too hard to achieve something because there are too attached to the final outcome, it usually leads to poor performance. This ends up chasing away the very things you want to accomplish.
  

• Keep Things in Perspective - Losing money, failing a test, losing a match and getting rejected are not the worse things in the world. There are those who are far worse off and situations that can . Don't treat every outcome as a life or death situation.
  

• Accept Losing as Part of the Game - All great athletes, traders/investors and poker players know: You win some you lose some. That's the way it is. It is the Yin and the Yang. But as long as you focus on improving your strategy and abilities, the wins will easily outweigh the losses, in the long run, if not in number then definitely in magnitude. Josh Waitzkin, child chess prodigy and Tai Chi Chuan champion, devotes an entire chapter in the Art of Learning to investing in loss.
  

I have to admit I am guilty of all four examples above and the one thing that I have always observed to be true is: The more you try to do something the more likely you'll fail (Trying hard to keep a relationship, trying hard to find a job, trying hard to make money, trying hard to find missing keys, trying hard to find a partner, etc). I am not telling you to not try but rather to not over-try. I think most people try too hard when they put too much emphasis on the outcome and not on the process.

Feel free to share your own experiences or solutions to being scared to lose in the comments section.

Recommended Reading - Developing Mental Toughness by Graham Jones and Adrian Moorhouse, Engineering Psychology and Human Performance by Christopher D. Wickens and Justin G. Hollands