Result since last update: £915.95
Well as losses go this one is right up there with some of the more annoying ones. Not angry with it at all - as I've said before losing is part of the game. You can't win all the time. But some losses are easier to take than others and this was certainly an irratating one. As ever I have only myself to blame though. And, as ever, i've taken the loss on the chin and put it behind me.
The £915 is made up of a few events that have either closed or I got involved with last night. All cricket or NFL markets. Some pretty good profits on some but the killer was last night's Philadelphia at New England NFL match.
Crazy really. I'd had some time off from trading as I mentioned yesterday and started doing the New Orleans at Carolina match early in the evening. Decided I wasn't really into it however so just levelled out all green during the first quarter and left it. Had something to eat, watched some tv and fell asleep on the couch. Woke up a bit later and felt like having another look. Emma's away so I got involved in the Patriots' game.
Well, won't bore you with all the details but ended up with a maximum market loss on the match odds market and a few hundred red on a handicap one. The handicap one really riled as I was offering pretty decent odds to try and get out for a profit but there just wasn't the liquidity at the time.
The match odds started off fine. Was just taking a few ticks here and there. Closed a few trades for losses too. Was genuinely surprised with the Eagles but never really doubted the Patriots would win - which they did. This was the route of the problem though. Although I closed out some positions for a loss I didn't close them all out. I remained steadfast in my belief the Patriots would win for too long. And although they did this was a mistake. It needed an incredible drift for me to hit my max loss point but as the game progressed and the scores remained pretty level a tough on pitch ruling against the Patriots got me there and i bailed. Real bite my lip stuff as I still believed they'd win. Max loss points are there for a reason though so I acted.
Of course, the Eagles immediately went 3 and out, the Patriots got the ball and scored. From memory I bailed just two ticks from the highest Patriots price. Galling stuff. But also avoidable if I'd approached the game differently and not held some of the earlier positions for as long.
So there you go. The irony is if I'd held the position 2 minutes longer I have had a nice win on the match odds market. Of course, the loss could have been that much more too mind. With hindsight I'm pleased I took the loss when I did. But not so happy with letting it run to a max loss situation. I just didn't believe the price would ever drift that far and took the decision that I was going to hold until it did. Genuinely just didn't think it would get there. And it's just an extra kick in the teeth that it just scraped it before plunging again when the Patriots got on their next drive.
Pretty hefty red booked then. Made a sizeable dent in my recent NFL results too. Not so much to trade over the next few days so will be adding some entries focussng on more general trading tips and pieces. Bit rich coming from a guy whose just blown the best part of a grand but feel free to have a read if you want!
8 comments:
An excellent post - Sorry to hear about the loss but it is interesting to see that you took the loss and kept your discipline. Had they not scored what would have happened to the price? I don't anything about NFL but I presume it would have continued to drift and therefore you would have faced a greater loss. I think you did the correct thing taking the loss and it is just typical that the market goes the other way as soon as you exit but I am sure in the long run sticking to your discipline I am sure will save you plenty.
Sorry to hear about your losses. Sounds like luck was against you. You seem to still be in good spirits though, which is good.
Sure you'll make it all back soon enough.
Got my fingers burnt on that one too!
Still , live and learn!!
Betfair trader,
I have been following your blog for a while now and I find it a fascinating read. You have an excellent writing style and are very open about your strategies and the thought processes behind your trades.
As well as reading your blog, I have been researching the fundamentals of setting up as a trader with a view to becoming a full time trader (I am in a well paid job but am frankly quite bored and am fascinated by sports trading on the exchanges).
Without teaching you to suck eggs, I can't help feeling that you are making some basic mistakes in your trading approach:
1. One of the basic principles of trading is that you should only trade where you have an edge over the market(and that edge does not have to be very big in percentage terms). You have an edge in cricket in so far as you know the form and can read a game and see where the value lies. Do you have an edge in NFL? Or do the other betfair punters have an edge over you in terms of knowledge of the game?
2. Your only limit on your trading is your maximum loss on an event. There is a danger that you will only stop trading when you hit this. In the same way that someone walks into casino and is prepared to lose £100, will generally play on the games until they have lost the full £100, even if they have been up by significantly more than this amount. Their trading or betting is defined by the maximum loss. You need to have other targets that curtail your trading (e.g. profit per day targets, time limits). Also you need to be patient and only trade where you believe there is value. Never feel the urge to trade for the sake of it.
3. From your blog you appear to sometimes be astonished by how the market moves against you. As a trader, you should never be surprised by the market. You should not be thinking "where will the market move next?" but rather "what action will I take if the market moves by x?". That way you are always one step ahead.
In the meantime, congratulations on the excellent blog and your success as a Betfair trader. I look forward to following your progress.
Leon> Hmm. Yes. I kept the discipline on the max loss for the market. for that I'm grateful. But the reality is I lost it on the some of the individual trades. This was driven by my overwhelming belief that the Patriots would win. Ok, they did. But not before the price drifted to max market loss point by which time I was in a hole! If I had bailed earlier from those individual trades I could have got on the Patriots again at a much jucier price. Another lesson to learn from....
As for if they hadn't scored again. Yes, the price would have continued to drift. But this question doesn't quite take into account the game situation at the time. The point is they had just failed to score. (They had a harsh decision against them with prevented a touchdown and then missed a field goal) This gave the ball back to the Eagles which in turn saw the price go to where it did. If the Eagles had then score, or had a decent drive, the Patriots price would have drifted rapidly again yes. They 3 and outed though, the Patriots got the ball back and promptly scored.
Ojwanabee> Thanks for such a long and well considered comment. Appreciate it. And no worries about teaching me to suck eggs. I've received some great advice through comments on the blog since I started it and always welcome constructive comments. In reply to your questions / commments. I wish you all the best if you take the plunge in to full time sports trading. Do bear in mind though that there is every danger you may eventually find the monotony of it as boring as your current job! Don't know if you saw it but I did a blog entry on the kind of things I think about when I consider going full time on Betfair. Anyway, to your points / questions......
1) Edge. yes. And, in running at least, I guess part of my edge in cricket is I have a pretty good read on the market. Borne out of simply watching its behaviour over so many matches. As for NFL I have not traded it as much. It's actually not possible to. As for whether I have an edge. Interesting - and forms part of a discussion I'm having with several other traders at the moment privately. I feel I read the market / game well. At least well enough to judge market direction and this is really all that concerns me. But statistically pre match I'll hold my hands up and say no. I don't do hours of research on it. I'll have a look but there are punters out there who will have a far greater knowledge of the sport, players and statistics than me. (Same with cricket in fact though I am increasingly adopting a stat based approach to non Match Odds markets, particularly on the spreads that I have started to take more seriously) This doesn't bother me though. If I was an outright punter of course it would. I could not determine the value I'd need to be a long term consistent winner without all those stats. As a trader it is less important. More important for me is a sound understanding of the rules (in relation to NFL in particular) and again the ability to be able to read the market and understand why it behaves like it does. Of course I'm still looking for value which I believe is easier to find in inrunning markets. Fact is though I will willingly take a poor value price if I *know* I can profit from it. If I'm positive I know which way a market will move *short term* I will at least consider getting involved, value or no value. I know that will raise some eyebrows. But at present there are circumstances in inrunning cricket markets where very short term trades along these lines are profitable. I can see several ways in which they could cease to be so.
2) Hmmm. Sorry but what you say about my stop limit just isn't correct. Given the blog entry you'd read before commenting I can see where you're coming from. I do have a max loss limit for a market yes. But this is made up from several other individual trade limits as outlined in my money management strategy and the discussion below it. In the entry you comment on I did in fact mention taking some early individual trade losses. My mistake in that market was my fervent belief the Patriots would win. It clouded my judgement and led to a lack of discipline. I didn't cut all the individual trades simple because I was convinced of the win. Big error I'm sure you'll agree. Ok, they did win. But not before I reached the max market loss limit. Maybe this is what gave the impression?
Other targets? Time is more useful in financials I find. Day Trader closing out before market close. Forex trader shutting down for Xmas holidays etc. It's not something I really employ in my sports trading where the vast majority of events I trade in last around 8 hours or considerably less. Daily profit targets. Simply don't believe in them. Too much temptation to push to make it when the market may not offer favourable enough conditions. Similarly if I was to reach a daily target and the market conditions were favourable why stop (close out and even give value away to do so) just because an arbitrary figure has been met? Classic poker player dilemma. Would you leave a game full of fish just because you reached a daily target? I prefer the longer term view. It's all the same game just made up of lots of different sessions. Take full advantage of favourable conditions. Avoid poor ones. When looking at my results I don't even consider weekly results important. If I had lost over the course of a month I'd have a good look why. I know I've set myself targets in the past (pay for wedding and currently £101k challenge) but these are very much open ended. I don't consider them when trading. Rather I hope to gradually reach them. Long term open ended goals.
Patience? Spot on. I actually consider myself patient. Certainly more so than I used to be anyway. I came across some well presented trading advice earlier this year which shows quite what the impact of patience on trading results can be. I'll be doing a blog entry on it some time soon. Will probably be based around an example of a two outcome event where prices are around evens the pair.
3) What can I say? I'm still learning! Yes, I am sometimes surprised by how quickly or far a market moves. The rapid swings do occasionally even astonish me yes. I don't think everyone can be right all the time however. I know far more experienced traders than me, who operate with far larger stakes, who are also surprised by the market's behaviour sometimes. Often the market will overreact / run scared. This accounts for most the times I'm surprised. You can't always judge the extent of the panic when it happens. The best traders, of course, realise the overreaction and trade accordingly.
You say:
"You should not be thinking "where will the market move next?" but rather "what action will I take if the market moves by x?". That way you are always one step ahead."
I agree the second the is more important than the first. And practice it by, for example, deciding the trade and max market stop loss points on market entry. However, if I never asked myself where will the market move next I'd never have a position! I base my opening trades on my answer to that question. What I will do once in the market is based on my answer to the second question. Which I decide at market entry point.
Err, apologies. That turned into a long reply. Hope it all made sense!
Betfair trader,
Thanks for the response - as always very well reasoned and described. I am not taking the decision to go into trading lightly but I have always been fascinated by the sports markets.
I take your point about the stop loss limit. I think cash management and discipline have to be the platform for anyone taking sports trading seriously.
Keep blogging!
How can i make money.would you be willin two trade on my behalf?
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