Record Keeping

For a long time Profit & Loss figures were the only records I was keeping from my trading. One year I got so slack I didn’t even keep up with P&L for around 6 months and I had to email Betfair to ask for the spreadsheet. I was clearly only interested about the bottom line and wasn’t prepared to look deeper statistically at where I could improve. I guess it’s easy to become complacent when things are going well but when things slowly stop working and you can’t pin point why I can tell you it is extremely frustrating. 

I recall a post made by Peter Webb a few years ago; he had noticed that his return on investment (ROI) on certain strategy was in slow decline so he knew he had to start making changes. Although I was doing well at the time I should have taken more notice as I and probably many others have struggled to adapt to market shifts in the past. I have had to work very hard to reinvent my trading methods to continue to profit from the exchange and keeping good and detailed records has played a big part in this transition.

Record keeping has also helped with goal setting and making monthly/yearly comparisons.

Below is my P&L comparison of January 2011 and January 2012.

 Initially I was a little disappointed that I hadn't greatly exceeded last years Pre-race total but looking in more depth I had actually traded 30% less races compared to this time last year. This fact reassured me of my progress where previously I may have had doubts. I started trading In-play around 15 months ago so it was no surprise to see an improvement here and it will be interesting to see how far I can go with that this year.

Finally, Go here for a great Spreadsheet for monitoring your P&L by Multiple criteria.

http://betfairtradingmindgames.blogspot.com/2011/04/results-summary-v2-spreadsheet-is-here.html

Excelling in Excel

Learning to integrate automation into my trading has been on the ‘to-do’ list for a while now and during the winter I’ve really started to get the ball rolling with excel.  I feel it’s something that I must learn now if I want to progress further and I’m hoping my efforts will open up new avenues to explore and profit from in 2012.

I’ve gone off in two directions with this. The first is learning how manipulate and study the Betfair historical data so I can look for trends and back-test trading theories and ideas. The second path is targeted towards assisting my manual trading and maybe one day being confident enough to leave a ‘hands free’ Bot making trades without human intervention. 

I am only in the early stages of both projects but can already see the huge potential of using Excel alongside my trading. Playing around with the historical data has shown me that in general, as I expected, the market at Betfair SP is very efficient. But, looking deeper at more refined criteria and taking the in-play market into consideration I have already found some very interesting angles to follow.

Excel VBA was like Chinese to me 2 months ago. It is still like Chinese but now I know 5 sentences and 50 words. That’s how I would describe my progress so far and although it may sound slow you’d be surprised how far you can go with those language skills. (I have not tried that by the way although Dim and Sum might come in handy)

As a trader who has spent many hours watching racing markets I have developed a kind of ‘sixth sense’ that doesn’t translate easily into a set of programmable rules. Getting excel to think and perform exactly as I do isn’t realistic but I can get it to assist me in areas where my hands and eyes are at full stretch. It can also execute repetitive tasks that when performed manually could be hampered by boredom/tiredness or might lead to missed opportunities.

I wish now I had pushed myself into learning excel a long time ago as it really does add a new dimension to my trading but I guess that’s just one of those things. The Instinct I have developed from watching the markets over the years is still the key to my success and it will be essential for the development of any automated strategy’s in the future.

Xmas

The Festive period was quite for me as always. I rarely trade over Xmas and New Year and although there are some high class race days I prefer to take an extended break and spend quality time with friends and family. I’m learning how important it is to maintain a good balance is between work/play and knowing when to take a break from the screen. This was a difficult decision to make in winter 2010 as I was feeling pressured by bad results. A big difference in 2011 has been a more regimented approach and I want to work even more on that in 2012. This includes planning the weeks ahead instead of looking at race cards daily and saying ... 

“Oh this looks rubbish” or  “I might trade today”. 

It has also become second nature to go to the gym or go swimming before a trading session. If I sit at the screens without this preparation it just doesn’t feel right and I’m more likely to lose concentration or miss a big opportunity. My main goals for this year are to maintain and improve these new changes to my lifestyle and to be even more aware of my performance levels throughout the year. I can’t set a financial goal as this just doesn’t work well for me; I want to take each day as it comes and although I naturally have expectations I’d prefer to be absorbed in the markets rather than thinking about how much should be making. I also hope the work I have done in excel can flourish this year and open up a few more profitable roads to explore. 

I wish you all the best of luck in 2012 and I do plan to be a little more sociable on this blog ;)

Sam.

I Remember September...

Last year, I had a tricky month and couldn’t gather any momentum after taking some bigger than normal losses. It was a similar story during October and although I was making a profit overall, the path was bumpy and stressful, it forced me to really work on my overall game and iron out some bad habits that had crept into my trading. 

From a psychological perspective one of the things I looked at was how a losing trade could affect my performance moving forward. It was incredible to see how often I would have a losing race after a losing race and this same trend was becoming evident in my daily P&L. I used to be good at taking losses and I would naturally set out to take each race as it came but for some reason my mentality had changed. It’s difficult to pin point exactly where and why this happened but the underlying reason would probably be that I was getting frustrated with the markets and couldn’t meet my own high expectations, I knew something had to change.

I came across a blog called Traderfeed and could relate to many of the topics I was reading. One of these topics was performance anxiety. I purchased The Daily Trading Coach by Brett Steenbarger who is also the author of the blog and In parts it was almost as if the book was written for me. I felt I was stuck and this rough patch was kick I needed to wake up and change my ways.

From “The Daily Trading Coach:” Lesson 1: Draw on Emotion to Become a Change Agent

“We desire changes in our lives. We adapt—we grow—by making the right kinds of changes. All too often, however, we feel stuck. We’re doing the same things, making the same mistakes again and again. Do we wait for life to change us, or do we become agents of our own life changes?

The easy part is initiating a change process. The real challenge is sustaining change. How many times does an alcoholic take the initial steps toward sobriety, only to relapse? How often do we start diets and exercise programs, only to return to our slothful ways? If we focus on starting a change process, we leave ourselves unprepared for the next crucial steps: keeping the flame of change burning bright.”

I made big changes to my daily routine and how I approached each day with regards to goal setting and targets. I started writing in a diary after each day’s trading and quickly began to spot patterns in why I was making mistakes or getting frustrated. Here is a sample from my own diary last October where I talk about how watching videos of my own trading is helping to identify my triggers.

My Diary Oct16th 2010

"Watched a video of a losing race before trading today. It is crazy to see the hesitation and lack of control when these types of trades go against me. It has really helped to watch this one back and it reminded me how it feels when I get caught like this and how this can lead to a stressful day. l should do this more often before racing as Steenbarger suggests for a visualisation technique."

Today went well and I felt in the zone from an early stage. I started to fade as did the markets (hopefully linked) as the last hour came in and there were a few niggly losses at the end of the day which I should of limited or turned green if I was more focused and not being greedy."

I am much more aware now of my risk in the market and what I can handle without becoming emotionally blinded. I never thought that the toughest challenge of my trading career would be 4 years in. I had always assumed that the hardest hurdles were at the beginning but I can tell you for a fact that’s not always the case.

This graph below shows my P&L comparison of Sept 2010 & Sept 2011. I only had one losing day this September compared to seven in Sept2010. The momentum gained from setting out not to lose really is worth it not only from a financial sense but also mentally I feel much stronger. I’m much more confident compared to this time last year and believe I can keep this momentum going through the winter months.

Jumping Ship

Glorious Goodwood continues into this weekend and Betdaq is proving to be a great place to take your trading activity. I have traded Betdaq In most of the major meetings this year with decent results and with even more reason to Jump ship this time round it’s promising to see more liquidity flowing into these markets. I’m using Bet-angel for Betdaq which you can download Here.  

Check out one of my typical trading setups for this week; It’s very unlikely that you will be able to squeeze this much onto one screen but it shows the true possibilities of trading both exchanges simultaneously if you invest in some "screen real estate". 
 

Its a pretty big picture file so feel free to zoom in a have a wander around.

Remember that you don't need all of this info to make a profit! But it does help!

I'm using both versions of Bet-Angel here. 

Excuse the cheeky dig at BF but i think they deserve it don't you!

Brain Stuff

Thought I'd share this video with you from one of my favorite channels on YouTube.

Its amazing how you can shift states of mind when trading.  I can be in complete cruise control only to be shunted into a state of panic, it can be difficult to get back in the zone again straight away. I have done a lot of work on understanding my own mentality towards tradings with the help of eBooks and videos like this. It's really helped me overcome some of the emotional triggers that had began to affect my performance. One of my triggers was boredom, I suppose after 5 years of trading this was always likely to creep in so now use new found techniques to overcome these feelings.

60% So does it suprise me?

If you look at the direction that Betfair have been heading in recent times it does not surprise me to see an increase in the premium charge. But the size and rules applied to the new “bracket” are a massive shock that will have huge consequences to all exchange players not just the suggested “500” that Betfair have quoted.

The lifetime +250k bracket and soaring percentage increase only highlight what I have suspected for a while. Betfair want to be the main market maker, they want even more of the pie and they want to force the best competition out of the picture.

So how will things look post 18thJuly?

It’s always very difficult to predict how markets will change after such an adjustment and I really have no idea how things will look and feel. Maybe the big hitters will continue to trade and accept the new charge; we may see a big increase in volumes and liquidity over at Betdaq. These markets are always changing shape but even in today’s ‘uncertain’ markets I was able to pull in a decent profit from the 15 races I traded.
                                                        

I had personally planned to see out the summer trading and restart one to one tuition in the winter but this recent shift has forced me to bring forward the re-launch of BettingExchangeTutor.com
There are still plenty of opportunities to make money on Betfair and I now aim to help some of the other 3 million customers earn a second income from trading.

Visit the website here for more details on my one to one courses which can now be attended online.

I have also uploaded a new video to my youtube channel which can be viewed from here

Fat Fingers and Cross Matching

Pretty good example yesterday of how the cross matching can create wild spikes across the market if someone or someone's bot has a big accident.

Its was an outsider so most manual traders of the favorites would have had a 'wtf' moment during this activity.

My advice is not to panic with irregular jumps in the market and take a look at the bigger picture before exiting positions