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

Weight of Money (WOM)

WOM was one of the first indicators I learned to use when I started trading 5 years ago. I recall watching Adam Todd’s scalping videos using the early Bet-Trader. I’m pretty sure he was the first to introduce the ladder interface and that combined with WOM and momentum trading made for a solid foundation to build on.

As the Exchange evolves so do the characteristics of the indicators we use and WOM especially has become much more difficult to interpret. It can be used to trap, hold, manipulate and the recent introduction of cross matching  brings even more distortion to how WOM is perceived.

Below are two examples from today where WOM is clearly evident.  It’s pretty rare to see volumes of this size being matched especially on races like this with low turnover. Bearing that in mind my advice is to ignore its presence.... sometimes easier said than done!

The Masters at Augusta

I Plotted up at around 7pm yesterday to watch this fantastic golf event and with the laptop nearby I waited for the story to unfold. I felt sorry for the 4th round leader Mcilroy who was having a nightmare but the entertainment provided by the other players made for spectacular viewing and some good trading opportunities. It was hard to keep up with it all at times with 6 players having a share of the lead and a few more only one shot away.

I'm a keen golfer myself and I had a few ideas on how I could trade this event after experimenting with stats in the past. I got off to a steady start when Mcilroy was in meltdown and the late surge from Tiger Woods made for some great swing trades. I had a scare late on when my internet failed and I had to scramble on to the Betfair mobile app to close a position but apart from that it was great fun trading a sport that I enjoy watching.

Back to Reality

I decided to take last week off after a great Cheltenham. According to the Bet-angel forums it was a tricky week on the trading front and with the great weather we had in London It was a good decision to leave it alone. There was one day where I finished playing golf by 2pm and I was tempted to race back to the office and trade but I stuck to decision and went back to the first hole to work on my handicap instead. I think it’s important to take time out and recharge, trading is intense and can slowly wear you down without you realising.

Shot of the day

(This almost never happens!)

Cheltenham

It took me a little longer to adapt to the big meeting this year. It’s no surprise really as I was experimenting with Betdaq for half of the Cheltenham races, something I’ve never tried before but by the third day I was flying and had my best two days in over a year. Betdaq markets are a different beast. Although they follow Betfair very closely in terms of prices they can feel very illiquid in contrast to Betfair and the fill rate frequency is lower so a different approach is needed. 

It’s a shame but I do try not to get excited or have any kind of opinion on the horses even in these big races. At the end of the day my edge isn’t form/opinion based and if I started to mix this into my trading it would just be plain gambling.

 Betdaq

Adapting to Big Meetings

This week see's the first Major meeting of the year at Cheltenham. I always look forward to tackling these markets as they are very different to normal race cards. There seems to be bit of a "marmite" feeling amongst some traders with these and depending on your trading style it might be quite tricky for you especially if your expecting too much. My advice is to take it steady on Tuesday and feel your way into things slowly. You dont want to do what i did last year and have a negative start. I wasn't totally prepared for this type of market and ended up having to fight back Cheltenham losses on the weaker cards which made for some nervous trading on day one. As the week went on I got used to the bigger volumes and became much more patient in "slow motion" markets. The only nerves i may face this year are if Betfair crashes and i have to make a counter trade on Betdaq, but that's another story that frustrates me so much i dont talk about it.

My preparation for Cheltenham this year has simply been to stick to the goals i set in January. One of these goals was to try and go 25/50/100 races without a losing race. I have now achieved two of these targets and although I may not be making as much profit were I to take more risks the benefits I'm feeling elsewhere are  outweighing any thoughts of P&L. It has helped me become much more confident in my trading again after poor end to last year. I almost feel Invincible in the markets and working towards these goals is helping to eliminate some of the bad habits and weaknesses that had crept into my game

50 Not Out

Fingers crossed Betfair can prove us all wrong and hold up this week. Good luck everyone!

Sam

Expectations

I read a post on one of the forums the other day, something along the lines of:

         How much can I expect make with a £1000 bank on Betfair?

Like any Betfair forum he was instantly given some stick by seasoned traders and probably won’t return.

Various figures get mentioned here and there about how many people actually succeed on Betfair long term but one thing is certain to me. If you expect to make money from the start you are very much mistaken and will probably fall at the first hurdle. You’re much more likely to progress by expecting to lose your initial investment learning the ropes and suffering the harsh lessons made by all beginners. Evidence of these ‘horror’ stories are scattered on blogs and forums all over the web and this is only by those honest enough to admit it. What about the rest?

Expectations can not only affect new traders but also experienced ones. After 5 years of trading full-time I expect certain results from my trading and when things don’t go to plan it can cause issues in my ability to be focused on markets. This year I’m working much harder on being market focused and not thinking about my Profit & Loss. Even on really good days, thinking about what you’ve made ‘so far’ can alter your decision making and you will probably end up trading over defensively. How many times have you been on for your best day yet only to have a few losses that bring you back down to average?

I believe that the more experience you have, the harder it is to lower your expectations. But just because someone has more experience it does not mean they should expect to perform better than others in the market. Like in any professional sport, new players come through and everyone else has to up their own game to stay in a team or to hold on to a trophy. This rings true on Betfair and other financial markets. 

It really is a survival of the fittest. 

January and Other Sports

 January

January is never an amazing month on the racing calendar. The poor quality meetings and abandoned race cards can be very frustrating. Many races offer little opportunity and Ive found that being patient and trading defensively is the way to go. Ive managed to beat the previous years January totals and with some extra profits from the Australian open its been a decent start to 2011.

The introduction of the cross matching to racing has also had an effect on the mechanics of the Win market and I imagine certain players are noticing  changes for the better/worse. It certainly wont affect everyone but it will be interesting to see how things pan out over the next few months

Other sports

In the past when I'd ventured into other sports I always struggled to adapt. Using the wrong stakes and a clear lack of knowledge on how these markets worked led to some harsh lessons in football which put me off for a while. However, since last year Ive learned how to approach new sports with a completely fresh mindset and money management plan. The tools on Bet-angel: Soccer-Mystic and Tennis-Trader have really helped me to understand the market mechanics and now around 10% of my trading income comes from trading other sports. Understanding how other markets work can also be beneficial when referring back to your primary market. I know a lot more now about the book % and how markets are balanced.

Betfair site maintenance

Betfair returned around midday today but was not functioning at all well. Its best to take the day off in this situation as the market could fail at anytime leaving you exposed. Hopefully it will be sorted in the next few days.