Yesterday's Result: £2910.43
Ouch. That wasn't in the script. And it hurt. Sure it may not be my biggest single market loss on Betfair ever. But it's certainly the biggest since I started the blog. And is also way over my max loss limit per event.
I've tried to justify this loss to myself. Truth is though I can't. Sure there are reasons for it but I can't consider them excuses. So the bottom line is I fucked up. All a bit obscene really - losing more in a day more than some friends make in a month. Sure, those same friends, intrigued by what I do, point out that the loss isn't even half this month's profit. Well yes. That's true. But it isn't really the point. I shouldn't be losing this much on a single event. Plain and simple.
So what went wrong? How did the loss get that big - nearly double the max loss size I've been operating to recently? Well I guess the short answer is lots! But there were a few key areas I'm going to mention. Out of interest I made the loss on the 7th India v Australia ODI Match Odds market.
Firstly I just got large areas of the match wrong and ended up with an all red book very early that simply seemed to increase each time I got involved further. No worries with that. It happens. And I'm perfectly happy to trade away as long as I stay within my limits. Which is what I did. Crunch time came just before the Russia v England football match. At the time I was a four figure green Australia, a much larger 4 figure red India and the price was mid 1.6x. Crucial. Because 1.72 was my cut off point. At that stage I was going to cut for an equal red book and leave the game.
A couple of quick wickets fell though. On the fall of the 6th the Aussie price plunged into sub 1.1 territory and I suddenly found myself being able to go all green! Talk about a totally undeserved miracle escape. Unbelievable stuff. Unfortunately so was my behaviour. I didn't green out. I thought the game was Australia's, kept my position, let a friend in for the football and fixed some drinks.
On returning the price had drifted a little but nothing too bad. However, I still didn't get out. And remained in as the price continued to drift having decided what I was willing to lose. (Yes, I know.) Basically I needed a wicket. It didn't come and I ended up cutting for an all round red book above my max loss limit. I knew where I wanted to bail but simply couldn't get everthing matched. The market was getting increasingly volatile and I ended up chasing the price trying to bail. Ugly stuff. And expensive. As is often the case in these circumstances the wicket I so badly needed came the next over. But by then I was equal red and it was too late.
From there I just watched the game and decided to try and save a little when a winner had emerged. Wrong again. I should have just left it. I ended up adding around £350 to the red right at the end. Looking at my book, and the price, I decided on an escape bid. India needed around 12 runs, had two wickets in hand and were around 1.2x. I layed. India scored runs. And, lol, I backed it back. More red. :-(
The other thing I should mention is running concurrently to all this were some value bets along the lines I mentioned in the previous blog entry. These lost. And that additional money is what took the final red figure to what it is. Though even those bets got messy. I ended up cutting them too. Things got confusing. I was mixing up outright value bets and trades. It really wasn't a pretty site. Thankfully the one glass half full moment in the whole sorry episode is I managed to the temptation raised by a friend to use my account balance to "buy" my way out of the situation and back Australia in the 1.4x range shortly after the 7th wicket fell.
So there you have it. A max loss that went over the limit with volatility and me chasing prices to bail. An unsuccessful escape bid at the end and a few losing bets that I considered value. Tot that lot up and it comes to a loss of just over £2.9k. A horror story all of my own making!
Where now then? Well, I traded a little on today's Pakistan v South Africa ODI today and made a small profit. I've decided to keep those figures separate from this post though simply because of the scale of the loss. But it does show it's trading as usual as it were. And I will be posting on that later.
Aside from that I have decided to stop this outright value betting experiment for the time being though. I over staked on it and it got confusing having it sat on my trading book as well. I'm still convinced it will be a beneficial addition to my activities long term but for the time being I'm going to switch to paper trialling it for a while with some variable spreadsheet betting stakes to see exactly what the variance can be like. I'm sure some clever mathematics along the lines of standard deviations could also help me out. One successful fellow punter I speak to on MSN recently had a 27 value bet losing run - and not all of them at long odds. I don't like the idea of that. It's a very long term approach. I've always been more comfortable with the more consistent approach trading enables. And, of course, it doesn't require you to always be right about the value aspect of it all.
Right, public flagellation over. Loss booked. Attention fixed firmly on the future. I've withdrawn some money from my Betfair account and put a new money management system - more of which later - in place. This has been a set back. A bad one. But not catastrophic. Here's hoping the future is a green one. :-)
10 comments:
Sorry to see the losses mate - they always seems to be bad ones after a good winning run and unfortunately it normally comes down to greed - don't like to say it but from what you have written it sounds like that is exactly what you became :-(
Thankfully you have had a good run of late which more than covers the loss, so best of luck and hope you make it all back quickly!
afmfifgh
Ouch ! Sorry to hear about the loss. Then you had to watch the football too, what a sh** day. Thanks for sharing it though, it puts one's own small losses in to perspective. Better luck / discipline soon.
LuisGarcia
afm> Fair comment. There was an element of greed there among many other factors. But a greater one of stupidity. Of the whole situation it's the fact that I didn't green out when I could that grates the most. This exact scenario is also the reason for my greatest ever loss on Betfair. For years I've heeded the lesson but it's like a switch flicked off yesterday and I didn't. With hindsight I'm thinking it was perhaps the sheer relief of escaping what was looking like a hefty loss at the time coupled with the belief Australia would win.
Luis> Yeah - wasn't the greatest of days. But in among the lows there were some highs too. Not least the fact that some friends had their first baby. :-)
As for sharing the loss. Well, guess that's what the blog is all about. Discussing the bad days as well as the good. And learning from both. Makes a change from seemingly only ever reading about winners on the Betfair forums anyway!
Funnily enough rather than writing blog entries about why traders should do x, y or z I do feel seeing an example of what can go wrong if you don't do those things is probably more useful. I'm sure there's lots of people reading that thinking "oh yeah, i've done that". By reading through what I've done, and recognising what I did wrong hopefully others can avoid the same mistakes going forward. Unless they're filling my bets of course! :-)
Wow!
Didn't expect to see that when I checked the blog! I followed the 7th ODI myself yesterday and found it was a very strange market.
A real eyeopener tho! You say stupidity but ultimately its greed alone that caused you to act with stupidity. I say an eyeopener tho because if anything I've picked up from reading the blog is that you seem to have excellent discipline and even one with excellent discipline can get greedy. I try to drill it into myself that I mustn't be greedy but its not so easy sometimes.
Its sure to be a lesson re-inforced tho and if you learn from it then maybe it isn't such a bad thing, the worst thing that could happen is that it all became too easy, thats when you're in for a very big fall.
Best of luck going forwards :)
JT26
Cheers JT. Bit of a shocker to me too! You're right though. Does show how easy it is to let discipline slip no matter how often you remind yourself of the dangers.
As for being a lesson reinforced. Spot on. I mentioned recently that I'd read a book about Wall Street trader Jesse Livermore. There's a passage in it I remember where, after blowing his fortune early in his career, he says something along the lines of no price is too high to pay for a trading education. Think I might dig that out again. I understand his point completely. It's been four years since I've had a blow out like this. I just paid for a refresher course in why you can't let discipline slip. Ever. I hope the price is worth it going forward.
"If I hadn’t made money some of the time I might have acquired market wisdom quicker.”
A great Jesse Livermore quote, there's a lot to be learnt when things go wrong. I've recently downloaded 'reminisces of a stock operator' and 'how to trade in stocks' by Jesse Livermore and look forward to reading them when I see quotes like that one above.
The three essays/articles below make good short reading:
http://www.zealllc.com/2003/jesse01.htm
http://www.zealllc.com/2003/jesse02.htm
http://www.zealllc.com/2003/jesse03.htm
JT26
Hi bft,
Sorry to see your biggest loss.Before i say any word further i want to clear that i've no intention to teach/guide you after this loss because i think you reached on such a height that any one can only dream of.You are a institution.
This losses are inevitable specially when bowling team lost after reached to 1.04 odds like Australia in this case.
Main reason i think is because it was a low score match and a dead rubber.India was 66/6 by my memory and something like 130 more needed without run rate burden.Uttapha or you can say a pure batsmen/hitter was on crease.If it was not a dead rubber Aussies definately bowled to a different plan.
I know this losses hurt more emotionaly then money wise.But i know you are the best to cope with them.
All the best
your true fan
Dip K
If it's any consolation (which is probably isn't!), I made some of the same decisions as you, at about the same times in that India-Australia match. I was nicely all green after the sixth Indian wicket, but couldn't resist getting involved again as their price came down. I think after their 7th wicket they were about 5 on Betfair. 4-1 about the tailenders getting another 70-odd runs in conditions that had already accounted for 17 members of arguably the two best batting sides in the world? Seemed more like a 50-1 shot to me. So I bet accordingly and waited for a wicket...and waited...and waited... Some days you just have to take it on the chin, don't you?
Thanks for the blog, by the way - really enjoy reading it.
Dip> Thanks for the kind words as ever but the truth is we're all still learning and I always welcome advice. Had some fantastic input from readers since I started the blog and I'm always grateful for it. As for being an institution - well you're making me blush now! I'm over the moon with what I have achieved since starting the blog but there are many other Betfair users out there who would regard my activity on the exchange as little more than pin money.
Anon> Sorry to hear. An agonizing wait wasn't it? But despite being an expensive one we shouldn't forget what a great effort by India it was to win from that position. Just not what I wanted to see on the day!
As you say, apart from re-learning the lessons, there's little more to do than take it on the chin. I have and my focus is now on the future. Tomorrow is another day and all that.
After reading this blog I can tell you I know exactly how you feel. I found myself in a position to take £400 green all round only to leave the market when India were 64/6 with the assumption the game was over.
Imagine my horror as I sat at a friends house watching the footy with one eye on my mobile phone displaying the cricket score, watching the Indian's claw the game back :|
I ended up losing £2200. A harsh lesson that has to be learnt....
Avoid the green eyed monster people! Set limits and get out levels and stick to them! Take the green when it presents itself!
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