Tuesday, 30 March 2010

Dreaming Betfair?

Well, Cheltenham has been and gone this year, and I had a great festival. I didn’t beat last years total or my best day, although I came close to beating my best day. The markets were strong, but not as strong as last year. I think this came down to a number of important factors – the favourites’ prices in quite a few of the races were quite high (above about 8.0); this means the big punters don’t need to put huge stakes down for decent returns, and it’s the same with bookmakers offsetting their liability; on-course punters will spread their money over the field, reducing the need for the on-course bookmakers to even need to consider it. I’m not an expert in how this field operates, but it seems to make sense. The markets (in general) also feel like there is much less ‘real money’, i.e non-traders’ money, making it more a fight than a well-interpreted market move judgement. This shouldn’t necessarily be taken as a bad thing, because money can still be made; it just means changing your approach to deal with the change in conditions. Aintree is on its way, which should be similarly as good as Cheltenham. I have a new best race total to beat – two of the races I traded on gave me perfect conditions and I made great decisions as well. I think I lost on just one race throughout the festival, I just couldn’t get to grips with it, sometimes you can be out of sync with the movement in a market, and that’s exactly what happened.

On to my choice of the post title, I forgot to mention about many Betfair dreams I used to have. When I started out, a few months in I started dreaming I was trading and I remember imagining myself mid-way through a trade left needing to back thinking “back, back, back!!!” I remember waking up a few times where I actually tried to click with my right hand but obviously wasn’t sat next to my computer. Thankfully I don’t have as many dreams like that as I used to. If you’re having the Betfair dreams I’m sure you’re deadly keen to learn. Other dreams that aren’t so bad, involve me placing a huge order, forgetting to trade out, and the horse winning/losing to bag me a huge profit! I would never intentionally let a half-completed trade go in-play because the moment you do that, and you don’t know anything about horse racing, you might as well be sat at a roulette wheel in Las Vegas hoping for evens to come up.

Thursday, 4 March 2010

Life or Death?

After my time away, coming back to trading made me see how tense I am when I trade. I realised that the way I trade is similar to being in a life or death situation. When I trade I don't want to fail, to the point where if I did it would result in death. Obviously I wouldn't die! But my brain seems to react in that way. A lot of this boils down to my innate competitiveness that is present in nearly all successful traders - probably mostly short term traders. The best way I can explain the way I present myself while trading, just imagine that you were playing this game where you had to beat half the people at pressing a button the fastest before they did otherwise you would die. You would most likely hit survival mode and your body would present itself so that you had the highest (higher than normally) chance of pressing the button the fastest you possibly could. This attitude I think is partly why I managed to do so well. My awareness of that led me to seeing that I wasn't giving my body and mind any peace, so I have tried to minimise the effects.Through through doing so I've found an edge has been lost. When I go back to my 'old' ways, I focus better without worrying about the effects it has on me and it shows in my daily profits. I'm not really pointing to anything here, just merely another interesting observation of many that you reveal through a trading career - or any career for that fact!

March is around now, and racing quality will pick up. After speaking to a few beginners, word seems to spread from the high-end traders when they get excited for March and spring and summer racing to begin because liquidity increases, price volatility reduces, and generally the randomness decreases making trading easier. But for the beginners, ultimately it makes no difference because if you haven't got experience in the markets you won't intuitively feel this change. Using small stakes between £2 and £50 doesn't really make a difference in winter compared to spring and summer markets. So a word of advice would be to not give yourself false hope that if you're not trading well in the winter, don't think that because the professionals prefer the higher quality racing, that your trading will improve because it's 'going to be easier'. Perhaps you will get better results, but that may just be because your trading style suits the less volatile markets. As you gain experience, you'll learn your approach must change from season to season. And as you improve further, you must change your approach from race to race. Every race is different. Every race!