Weekly check-up

I have 6 recent trading sessions to report. On the racing I decided to simplify the staking and use the minimum £2 and for the football £4. The first was an evening session on Friday 18th.

I had a really good session profiting an all 9 markets, 7 racing and 2 football. I felt much more in control and reacted quickly when the price moved against me. I recall thinking that I needed to remember the state of mind I was in, as it felt comfortable and I seemed to be making the right choices faster without much hesitation.  I also traded without any auto stop losses and opted to close out of all trades myself.  I did scratch noticeably more trades than usual.

I next traded on Wednesday 23rd, where I also managed to have another clean sweep on the 11 markets, 6 racing and 5 football. Again I opted for no auto stop loss and it worked out well. No major incidents I can recall, it felt more like a routine, one I would very much like to get used to.

Moving onto Thursday 24th where I traded 8 markets. I made a real hash of it on the second race where I was trying to monitor 3 positions on different runners at the same time, and they all rapidly and simultaneously moved against me. I tried to close out on all three as quickly as I could but they all kept moving and by the time I closed the third position the book was showing a red £1.63 with about a min until they were off. I took the loss and decided to just keep at it as I had quite a few more markets available. I was grateful for the 30 minute break inbetween the evening races on this occasion, as it gave me plenty of time to refocus. Profited on all of the remaining markets, and with a couple of good trades on the football I managed to make an overall profit by the end of the session.

Friday 25th was short, I only managed to trade just over an hour whilst  killing some time before I went out. Profitted on all 5 racing markets which was a nice result once again.

I was quite looking forward to Saturday as I knew I would have an opportunity to trade higher liquidity markets with Ascot being on the TV. I didn't actually watch the racing as I forgot to switch over to the channel! I'm so used to listening to music now whilst I trade that following it on TV did not occur to me. Should really have given it a go as I am curious to make use of any new opportunities. Am planing on having Sky installed in February/March when I move flat. The reason I haven't got pictures already is that there are too many trees surrounding my building preventing the dish from receiving a clear signal. If all goes to plan I will probably need a few more months before I'm using significantly larger stakes anyway, and I'm happy now knowing that there will not be any reception issues in the new area.

Saturday was another good day where I managed to profit on all 21 markets, 20 racing and only 1 on football. My preference was always racing whenever there was a clash and there were many on Saturday as you can imagine. I also used my new rule of 2 hours max trading on a full card (between 13:55-15:55). I then had my minimum 1 hour break and traded for another couple more hours until 19:45 where I decided to call it a day. I enjoyed the more liquid markets more than I thought I would. I have read mixed traders opinions and wasn't quite sure what to expect. Granted this was not one of the biggest festivals but still the liquidity was noticeably increased, particularly in comparison to the AW evening racing meetings I have been trading mostly recently. In general I found that the trends were more defined and that larger orders passed through the market without making a huge impact. I prefered this as it made identifying the patterns much clearer. This has motivated me to try and trade one of the big festival like Cheltenham or Aintree.

I did experience a little bit of lag on a few occasions, which I can imagine is a direct result of increased weekend traffic, but nothing serious enough to put me off.

I decided to give Sunday a go after a nice brunch and Hamilton looked to have the GP in the bag. Really wanted to make the most of the Ascot opportunity as I'm not too sure when I will have a chance to trade higher liquid racing markets again.

The racing went well considering I was using £2 stakes. I traded for just over the 2 hour mark as I felt focussed and wanted to try and finish the card if possible. Another clean sweap and overall I traded 30 markets. 15 racing and 15 football. There were a couple of occasions where things were noticeably slower than usual. I did see later that Leon made a post about this. There are some figures displayed at the bottom of the Bet Angel software, not sure what these should read when the API is good/bad, perhaps somebody could fill me in on this if anyone reading this knows, would be much appreciated. I did sit through it until things seemed better, and just carried on trading when bets were being submitted at an acceptable pace again. Did not really put me off, whenever this happens I now just take a short break and by the time I'm back things are usaully much better and as a plus I feel refreshed.

My prematch football trading has also been going very well and I decided to increase my stakes to £5, although I often had 2 scalps open at a time, so effectively it was like using a £10 stake . I think this is a good move as it is giving me a taste of larger stakes on a stable market. This will ease the transition when the time comes to up my stakes in the racing. Most of the trading was prematch apart from a couple of matches which went in-play for about 5 minutes before I got matched. I feel uncomfortable when this happens as the risk of a first minute goal could cause a huge dent in my P&L. I've mentioned it before and I will need to ensure I close in the first few seconds at the latest. I think I have a decent enough sample size to see that removing this risk at the expense of a few small red P&L figures is definitely worth it. I will expect to see many more small red figures on my P&L now as my new rule is to aim and close out at KO.

Racing Trading Style

Despite all my efforts to date I am still noticing a bias towards my old style of trading. This style is back first and scalp orientated. It is evidently working well but I feel I need to consciously push myself to lay first or go for more than a 1-3 tick profit. I'd say roughly speaking we're talking about 80% of my trades are initiated with a back and 90% are 1-3 ticks, with the majority of this being 1 tick scalps. Even when I see an obvious drifing opportuity I am more inclined to back one of the other favourites who are likely to come in then just simply lay the drifter. I think the removal of closing in parts has allowed me to slip into my old bias, but as it stands I feel lmiting my risk is my priority until I have adequate market experience. I'm at a stage where I am still learning on almost every market I trade. The incremental closures is a good idea and I will re-introduce this when I can break down my closures, but for now I think I am going to push myself to lay more and hold onto promising positions longer. I might even trade a few races with a strict rule only allowing me to lay first. I'll pobably missout on many opportunities but this should help me focus on laying opportunities. If anyone has any other ideas on how to tackle this I'm all ears.

I have of course been experimenting with my trading screen again and am starting to feel much more comfotable with it:

I am now looking at both screens more equally and do not sit as close to the monitors as I used to, which allows me to view as much information as possible (I noticed form my videos a bad habit where I was looking at the ladder far too much). I now undock the charting screen and place it next to the ladder. The market overview has moved to the far left with some handy information at the top. I then under pin the guardian and unmatched bets screens which can be easily accessed when necessary, with a longer term candle stick chart for the 3 favourites. Having short term 1 tick charts and longterm 10 min candlesticks is helping me get a good feel for the market at a glance, particularly with the overview being right next to the ladders. This is the set up I used for the weekend and it is unlikely to be refined much further unless I get another screen. I would actually like to see the odds displayed from the thebettingsite.racingpost.co.uk on a seperate screen but I dont feel an upgrade of graphics card and an extra monitor is warranted just for that. Definitely an idea to consider maybe for next year when profits can pay for it. Would certainly be a nice little reward to work towards.

Right I better get back to work!  Will update in about a week or so. Stay lucky.

Trading Psychology

Have had a very interesting last week or so. Apologies for the lack of updates it seems as soon as I review and conclude one lesson the next one has already started not leaving me with much time to update the blog. This has pretty much being going on everyday, if I'm not trading I'm reading material on trading psychology, and if not I'm reviewing my videos or I'm analysing market patterns and behaviour etc etc.. essentially there is always something to do within this steep learning curve and I'm giving myself little excuse not to be doing it. Blogging is a great tool though and I will make sure I leave adequate time for it. It really helps me focus and remember certain incidents.

I've read much material on trading psychology, just to give you an idea I have gone through over 100 articles and read some great material in various books covering the topic. It's a topic I find fascinating and I'm sure if this interest wasn't there I would of probably read much less and perhaps even given up a long time ago. The more I read the more I am discovering about myself and how this directly affects my trading performance.

I have been having some good sessions recently and will put up a more detailed post soon but for now I will wrap this one up as I'm going to give some of these Ascot markets a go today. Will be doubly interesting for me as I have never had an opportunity to trade markets with the liquidity I'm expectig to see today.

Evening sessions

Managed to trade 13 markets so far the past two evenings. I was feeling really shaky on Wednesday after rushing home from work and trading straight away. I soon made some poor trades on the second race and didn't close out fast enough. I actually identified myself on stage 4 of the spiral and closed out as soon as I noticed I was slipping into the routine. Reaching stage 4 is not great but having the outline of the stages is helping as before it was all a blur and before I knew it the race was off. Did decide to call it a day early as I had a few other things I wanted to get done before the evening was over. Was happier with my attitude as I didn’t feel obliged to chase my losses even though I was down for the session. I had traded the whole session without automated stop losses switched on. After a quick review of the videos I discovered if I had used them I would of been more profitable and the big loss on the second race would have been reduced considerably. I decided to use them for the next session.

Thursday was better. It started off well and I remember thinking I want a couple of bad positions to test my resolve as after 4 markets nothing had really gone against me. I got what I asked for in the next 2 markets where on reflection I was showing signs of overconfidence which got me in trouble. On both I managed to close out quickly with a bit of help from the stop losses when needed. On the first market I would of actually made a profit without the auto stop loss, however it did prevent the situation form escalating and I much prefer having that safety net. After losing on 2 markets in a row I took a moment to refocus and traded what I knew was the final race really well. This did make me realise how important it is to take time to refocus.

I would consider my first evening sessions a small success, having managed to cope with the losses and still profit. However having said that, I have been reading much material on mindset and risk management these past few days, and realise I have much to learn. My mindset and attitude towards risk was poor when I started this blog, and as I am developing I am placing more focus on these areas. The racing analysis is important but it is almost irrelivant if I trade in a poor state of mind and without adequate risk measures. I will continue the analysis, as it is helping identify the patterns when my mind is fully focussed, but will also allocate some time for developing my mindset and attitude towards risk.

If anyone is interested, amoungst my research I found a link to a Mark Douglas seminar explaining some trading fundamantals. It’s a bit long and his accent took a bit of getting used to but he does make some good points. I read Trading in the Zone a couple of months ago and almost forgot all the great points he makes in the book, this seminar reminded me once again. Will need to invest some time in reading this book again, and perhaps a couple of others.

Inexperience

This Saturday was a good example of why I need to ensure I can maintain the rules and disciplines before ever contemplating raising my stakes. My inexperience got the better of me and although I was mentally strong enough to hold my resolve for most of the session, I was unable to keep it for the entire time. Included in my errors was taking one race's closures IR (£7.64 loss) which occurred right at the death. I am glad it didn't work out as it reaffirms my mental state towards the end of a session, and has triggered me to address this issue more specifically. I ended the day with a total loss of £3.93.





Escalating downward spiral
At some point towards the end of a session, whilst I am feeling drained I make a sequence of poor decisions. This sequence is what I now identify as an escalating downward spiral, which if allowed to take its full course concludes with an IR closure, and ultimately results in a huge relative loss.

When I started trading parttime, shortly before starting this blog, I was taking about 25% of my races IR. Just thinking about that now is quite shocking. My efforts so far have reduced this to maybe one a session depending on whether I manage to hold out until the end of the card. Catching this spiral early is what I am managing to do most of the time, but not consistently all of the time, and on every session. In my head I have counteractions for each stage of the spiral but have not written them down or analysed them with the attention that I now feel is necessary. I feel this is key in the next stage of my development.

Methods for breaking the spiral
Having analysed the poorly traded races, broadly speaking this is what I have noted as the main stages of this downward spiral:

1. Poor trade entered into the market
2. Fail to close trade quickly when market moves against me
3. Do not focus on market information (remaining married to my opinion)
4. Enter another trade (or two) attempting to scalp the deficit down (typically against the market trend)
5. Realise the red increasing dramatically and hesitate to react
6. Place full closure on first green increment on ladder (typically 5+ ticks out of the money) and hit ‘Keep all’
7. Wait for race to go IR and hope for the speculative closure is matched

The first stage is inevitable. I need to enter trades into a market to make money and accept the risk that comes with this. My strike rate is quite high and my analysis has given me the confidence to be assertive when necessary and ensure that entries are based on quality information. They will sometimes go against me no matter how good the trade looked.

Stage 2 is the first opportunity for me to end the cycle. This is a tricky one as it can differ depending on each scenario. For instance a small mini-move of resistance might cause me to go into the red temporarily, but would not be adequate reasoning for me to close as the main market trend will soon push the price back into the green. However on some occasions the move is not a mini-move at all, but a sharp reversal of the main trend, and the sooner I decide to close the more money I save. I think it is apparent that the only way I am going to know which is which is through solid market experience. As a safely net I feel closing early on each occasion will limit the risk so I am inclined to do this more often than not, even if it means I miss out on the odd swing and would have been correct to hold on. I will reintroduce strict stop losses from now on, as admittedly I have been complacent and not placed them for each trade. This counteraction alone will eliminate the possibility of a large trend reversal going against me at the expense of a small percentage of my profits and reduced strike rate.

Stage 3 links to stage two in regards to reacting to what is on the screen. Whenever I am in the red I sometimes remind myself to refocus on the market data and forget about the red figure. This often works when I am fresh and not tiring as it requires more energy. I feel implementing automated stop losses will help here until I can build up my ability to focus harder at critical moments and for longer periods.

Stage 4 is what I need to cut out completely. The risk to reward ratio here is too high. The stop loss should have taken me out of the market at this stage, however if I am in a situation where it has not I must focus on closing my existing trade before starting a new one. I think closing and immediately re-entering on the opposite side is often not profitable, as it is quite impulsive (often not based on quality info) and would mean that the trend would have to continue for a few more ticks for me to make any significant amount from it. With the footage I have analysed, it is just as likely to reverse once again which would leave me with an increased red figure if I had re-entered. I will not rule it out but will only do this if I feel it is the beginning of a strong trend.

Stage 5 is a sign of my inexperience. Although this is happening less and less if I let it get this far I am typically quite uncomfortable and unfamiliar with the situation. I have read much about handling these situations and one method to accelerate the development of the coping process is to expose yourself to these scenarios repeatedly until they become familiar and the correct reaction is consistent and automatic. I will be implementing this strategy, perhaps not specifically to getting out of poor trading positions, but more geared towards my reactions to losses. I think it will be along the lines of finding something challenging to lose at repeatedly to familiarise myself with experiencing loss. Bit experimental but I feel it will help (I have never been the most gracious of losers and I think improving this will directly improve my trading).

Stage 6 is my last preoff opportunity to get out, and although will leave me with a large red figure on my P&L, if I get to this stage I have to close out no matter what. Messing around with placing my net stake closures and clicking on ‘Take SP All’ I feel is not helping and just wasting time. If I get this far down the spiral my only option has to be click on current close.

Needless to say stage 7 should never happen unless some technical issue has forced me IR. If I find myself in this position I need to hit current close at whatever price available.

I think I am going to print off a small list of this spiral and have it on display next to my monitors when trading. If I ever find myself in one of these stages I expect it will help prompt me to react in the correct way.

Methods for increasing my mental stamina
I think it is a bit ignorant or perhaps even arrogant for me to think I can match the concentration, discipline and focus of fulltime traders straight away. What I have been trying to do upto now is trade for a whole day (like what I would do if I was fulltime) and then take a six day break. This is far from ideal when I am trying to drill in new, demanding and strenuous disciplines, for two main reasons.

The first is the single long trading session is too long for somebody with my experience. The quality of my decisions disintegrate until the errors pile up and negatively affect my P&L. Obviously the aim is to trade for this long eventually, but to try to do it immediately is just not being realistic. As with other aspects, such as staking, this will need to be built up gradually.

The second is the 6 day break, this gives me plenty of time to forget what I have learnt, and allows me to re-establish the old bad habits. My learning process although very analytical, is not very practical. Ideally to learn something efficiently I would need to do it repeatedly throughout the week as opposed to many hours on only one day of each week.

Working fulltime Mon-Fri makes trading daily harder to arrange. However I do have options as we have evening racing each week from Weds to Sat at the moment. I will need to incorporate this as much as possible into my schedule. I will have a word with my boss to see if I can finish work at 5 on these days, this will allow me to be home by 6 and wikk give me about 5 races or so a day on Weds, Thurs and Fri. I will keep trading Saturday but not all day. Will trade for two hour sessions, with long breaks inbetween sessions. Once I can prove to myself I can handle 2 hours without my concentration diminishing I will increase these Saturday sessions gradually. By implementing this I now have at least four trading sessions a week on at least four different days.

In short this will not only allow me to build up my mental stamina, but also learn more effectively due to the repetition on four days a week as opposed to just one.

My analysis of the footage will continue as I feel this is helping me build up market experience. Instead of waiting around for 30 minutes inbetween races during the evening meetings, I will try to use this time to instantly review each race straight after it has gone off. I'm hoping this will save me time as I will not need to make time to analyse them later.

Right I think that's it for now, I will report back roughly in about a week.

Goodnight out there, whatever you are!

Reflections

Much improved results again for Saturday. My new default stake is now £4 and I use a weighting system to mirror how strongly I feel about the trade. For instance £2 for a new idea or speculative trade, £4 for most trades and £6 for trades I feel strongly about (more swing orientated). I also use the closing in parts method I highlighted in my previous post whenever possible. At this stage I will not increase stakes again above £6 until I feel it is warranted. I felt the markets were a bit sluggish on quite a few occasions, but the more I trade the more I notice this seems to be a weekend thing, most likely due to the increase in people logged in at these times. I was tempted to pack it in on a couple of occasions, but am glad that I didn't in the end as I had a good day.

The video analysis although about as intersting as watching paint dry is really making a huge difference. I now breakdown every race and make notes on each one in regards to the price movements, my trading performance and additional notes on how the market should of ideally been traded. I then highlight key areas of my performance for a quick summary with all other races for that session. I intend to keep these brief notes to cross reference later when I analyse similar traded races in the future. This should make me trade them better having analysed the errors the first time, and if not I will highlight the errors again, making them stand out as repeating errors.

My discipline is much improved however I still need to kick myself every so often as the bad habits are still very much there, and I suspect will remain there until I have many more hours of good trading experiences under my belt. It's a shame I do not have more time to spend trading but as I analyse everything now, this means that roughly for every hour spent trading I need about 2 hours for analysis. Although this might seem like a tad overkill for some, it is evidently accelerating my learning process and I feel that by simply trading for the 3 hours, I would improve at a much slower rate whilst repeating many of the errors without addressing them properly.

I keep needing to remind myself that patience is a virtue. Breaking it down if I trade one day a week for a whole year that would make about 52 days. If I was a full time trader, assuming I was trading 5 days a week, this equates to only about 10 weeks or if you include a 2 month annual holiday approximately a quarter of a year. Now I gather that people who crack this game trade for an average of 1-2 years fulltime, so relatively speaking at my rate (assuming all analysis is completed each week) I'm looking at 4-8 years partime!

Realistically speaking I feel with accelerated learning and good discipline this can be reduced considerably but I do need to keep reminding myself to look at the bigger picture and maintain my patience. I've just started this marathon. Natuarally we all want to push through and master our skills quickly but I feel going through these motions now as effectively as possbile will ultimately get me there faster. The more I trade the more I realise the secret to success is that there is no secret, and it really is as simple as the harder you work the more profitable you will become.

Should also note that I did finally experiment with using 3 ladders towards the end of the session, and wished that I had done it earlier. It made trading much easier, particularly to nip in and out of trades on the 2nd and 3rd favs. I found that on a couple of markets I actually made more on doing this then just sticking to the fav.