Thursday, 9 July 2009

Exit Points

Exiting your trade is as vitally important as entering a trade. If you have made a poor entry position, you'll be falling back on to your exit trade to determine whether you make a non-profit trade or a terrible trade.

If you missed the entry points post you can find it here.

Instead of repeating myself, all of the entry points are important to be aware of when making an exit trade. There aren't really any new points so I'll just cover each point where I can add new information with a perspective of exiting a trade.

Weight of money
After watching so many races, I've developed a good sense of deciding when the price will stop moving in one direction and head in the other. The way the money gets matched is different to the way a false move does; it's subtle and unexplainable, but if you watch carefully you can eventually get a better judgment.

Book over-round
Similar to entry points, if you're in position on a horse drifting, the over round will most likely be edging between 102-4, so you'll want to keep your eye on this as when the book starts tightening you'll want to think about getting out. But remember, you can't just rely on this, over hundreds of races you will start to get a feel of when the best time to exit is around.

Time before the off
Be careful with about a minute to go before the race is due off. A fair number of people will be exiting their positions and in my experience it's harder to predict. I also find that trends will usually come to an end with about a minute to go as the markets find an equilibrium; so if you backed a horse going down, then would be a good exit point if it's been a constant steamer, the same goes for drifters.

Matched and unmatched bets
Try and keep a tally of matched bets in your head so you know what's been matched going what way, this will help you decide on when to exit your trade; based on every factor I mentioned in the entry points also.

Commentators voicing opinion
I find that once a commentator voicing an opinion, it takes about 5 seconds on average for people to react, depending on how strong the opinion is and who is saying it. So getting in position by then is good. Getting out I find that the stronger the opinion, the closer to 30 seconds is a good point to get out, where as if it's weaker, closer to 10 seconds. Remember these are all guides and nothing definite, it's just roughly what goes on in my head during these events.

Horses 'playing' up
The same rule I explained in commentators voicing their opinion should be used here also. The more extreme a horse plays up the longer you should wait before getting out; this time the extreme end could be minutes. A horse being stubborn as an example of a tiny play-up, then exiting the trade could be no more than 10-20 seconds after it happened.

Regarding stop losses, I personally seldom use them. I prefer manually controlling my position and being aware of my net position in my head. Stop losses are very good when predicting long term trends. One attitude I take is to get out if I have any doubt greater than a strength of 2-3/10 that the price will move against me. Sometimes very slightly higher if I'm doing long term trends because you need to ignore the subtle swings in prices. These 'mini' swings in prices can be quite predictable - they occur because everyone is always constantly unsure at which point the price will stop and/or head in the other direction.

Never let trades go in-play, it's gambling if you do it on purpose because you felt bad about getting out at your current loss. If you don't know anything about in-play betting, then it's simple; stay away from it. If you are one these people who are addicted or just have a habit of letting it go in-play, try setting accountability on this. So whenever you purposefully let a race go in-play half way through a trade, make yourself do something you don't want to do, like cleaning the toilet - if you don't follow through on it, you're only letting yourself down and you will most likely never succeed at trading if you can't introduce good habits.

Never sit and hesitate too much on a trade, the more you hesitate, the more confidence you're draining from yourself - just get out of position and start again. This piece of advice is invaluable! The more you restart your trades, the more chance you give yourself from learning from mistakes. Also stop yourself from being in the 'what if' mentality. My flat mate used to do it all the time, saying things like 'If I got out a minute later, I would have got x more ticks and made £y more!' - it's time wasting and you're not paying attention to the market, holding yourself back from valuable market experience! It's also just negative thinking. You want to be as confident as possible.

Always remember: before you succeed, you must fail; take each loss positively with the mindset 'Yes I lost money, it was a bad trade, on reflection I did x and y wrong, next time I will try and do this' If you say this after every bad trade, you will undoubtedly improve. This statement is basically what I think an intuitive person repeats in their head subconsciously every time a mistake is made. I have sidetracked a bit from exit points, but it's still important to know.

I have been fairly consistent this last week, apart from today where I was not focused at all. I started poorly and was £500 down after 7 or so races. I then managed to finish £100 up - I decided to stop because I couldn't get in the zone (it happens). So I went to go shopping, got half way to Westfield and turned around because what I really needed was a deep breather and some music to calm me down from the rush I was in in the morning. Anyway I managed to turn the day into a £1250 profit; very gutting because the liquidity was good today with the Newmarket meeting and if I was on form and focused, I felt like I would have make a killing. Oh well, there are plenty more races in the future. I've started Argentine Tango lessons, which have been great fun, I'll talk about that another day - but ladies - watch out!

I'm currently on about £207k so far, I'm going to edit the challenge for the final time, making it £350k instead of £250k; I think it's more of a challenge to me which should help me refocus throughout the remainder of this year.


Anonymous said...

Nice post Adam, good to see we will have you with us for a little bit longer now you have increased the challenge. You should go for a million, I reckon you would be close to that goal by the end of next year, you are only going to get better and better (if thats even possible) the more you do it.

Anyways g'luck, thanks also for the reply in email about the chart graph on homepage. Shaun

Anonymous said...

Hey Adam,

your blog is a very good read (especially when im at work and not focussing) and its good to see your making some good money. Just wondering when you first started how much £ did you first start with and what was your average bet size at the time. Has it taken you long to reach 207k from this starting point?

I'm currently at university and start my final year in October after I finish this one year placement. Gambling on horse racing has for many years been something i religiously participate in but only recently have i learnt and tried about trading. I find your points very helpful as i still need to learn how to read the weight of money etc.

I would love to gamble for a living (and of course turn a healthy profit) and wondered what your best advice would be if i was to start doing full time gambling/trading when i leave university.



Anonymous said...

Hi Adam,
Nice post. I'm sure I'm not alone in thinking that this and the previous entry post will be invaluable.
Thanks for taking the time to put this on paper...

cudster said...

I love it how you set up with a challenge of £150,000 and edit it to £350,000!! You must be in hysterics when you trade!

Congrats so far Adam, been following you since your December posts and find it amazing what you have achieved.
Thanks for the exit points also.

Keep them coming! Cheers

MikeG said...

Great advice Adam, all very good points (pun intended). Your P&L for June was fantastic.

scotthooker said...

Hi Adam,

Good to see you upped your challenge. Would be nice to see you make 500k...

Do you ever think that the opportunity to trade horses will dry up as more people enter the game? Or people become so wise as to make automated programmes that could do it better. To that end do you see yourself only able to do this for say the next 2 or 3 years as opposed to 10?

playslip said...

Would just like to say thank you adam for your informative post,i find they are a great help to my trading, just finding it difficult looking out for all the signals keep up the good work.

elkou said...

ty , for info , hmm chelenge update , i can bet you will rise it till 500k , bcs ur doing just great!

Pete Tuson said...

Great pointers here. I fully echo the point you make on letting things go in play. I am sometimes guilty of this, and it's one thing I absolutely need to stop. The problem is, going in play can wipe your losses out - but there's so much more to be lost than gained is it really worth it? Easy to say when I'm not sitting with a big loss in front of me!!!

I actually have a big note on my wall telling me to not be a pillock and to accept any losses I have accumulated. It really does help.

One other interesting point you make is what happens to the market 60 seconds before the off. Something I always notice is that a market could be perfectly range bound for 10 minutes prior, but in those last 60 seconds it's not unusual for prices to fall out of range and never recover their previous position. In essence I've found that I could have 2-3 open positions just a few ticks off the price, but it's better to take (if applicable) a loss at that point than wait and hope it comes back, because often it won't.

Anonymous said...

well done, i don't suppose you could put up a screenshot of your premium charge for last week could you?

Anonymous said...

This is the best post I've ever seen on this blog by a country mile/ At last something of use. Well done.

Steve said...

Hi Adam,

Just a quick question re: David Webbs course that you attended.
....Will it help to have a fairly solid understanding of what trading is all about before attending the course? ....its not a course for beginners?

Thanks a lot and a great blog by the way!


magere said...

Hi Adam
I've read all your posts and really appreciate the work you've put into learning your craft.

Even though I can't trade on Betfair because I live in the US, I still learn much about trading and life in general by reading here.

I wonder if you would mine posting the detail of one of your races from the betfair statement page? That is, the breakdown of all the different backs and lays you did to end up with the final result on that one race?

I think it would be instructional to those of us who read here.

I trade US financial markets and currencies now and I can assure you that most traders of ANY instrument would love to achieve your results.

In fact, reading your blog has inspired me to start my own.

I am considering calling it the "0 to $350.00 Challenge" (if I ever earn that much).


Scott Ferguson said...

great post Adam, I'd use it on the Betfair Education site if I was still there.. I'll plug it on my site in the near future.

Brian Coplin said...

Great post Adam. My target is £1 million by August 2010, fancy a challenege to see who gets there first?

Adam Heathcote said...

Hi Shaun, I think £1million would be a realistic target for over 3 years. Even then, that's pushing it! A million sounds nice but not £200,000 to Betfair!

Hi Oz, I started with £50-100. You only need to use £2-5 stakes when starting out. It's taken nearly 2 years (since I started). Advice - get involved; best way to learn.

Hi Scott, I don't think it automation will ever (not for years to come) play a big part in the markets, until then, humans will always be better. I don't know how many years I've got left, a guess would be about 4?

Hi Steve, Peter's course is mostly for beginners or people close to beginners. I understand the structure has changed but I'm pretty sure you will get a understanding of how to trade.

Thanks Scott, seems crazy that you'd use it - I remember being at the education one you hosted, I didn't have a clue. When someone asked what the numbers meant below the odds on the Betfair screen, I praying not to get picked because I had no idea!