Sunday, 6 September 2009

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.

7 comments:

The Millionaire Fund said...

"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."

Basically that's trading in nutshell, there aren't any easy routes to win at trading. Too many novice traders waste time looking for some easy 1-2-3 step strategy to win thinking trading is like some form of system betting and once they know the system everything else will fall into place. It just isn't like that , sure there are techniques and this to look out for to predict the direction of the market but it generally comes down to hard work and the experience you gain trading hundreds if not thousands of markets.

You should also be aware there is a limit to your own trading as to how much you'll ever take from the markets. Eventually you'll hit that % and trying to force a higher return from the same money will only lead to problems. The only way you'll be able to earn more, once that level is achieved, will be to churn more money through the markets.

Looking at your screenshots it's hard to tell where you are as although you state you're trading in £2-£6's it doesn't show how many of those trades you've stuck through the markets. If those 22 winning trades have been achieved by only a few of your £2/4 trades that'd be getting on for an ROI of 5% which is a very healthy return indeed and you certainly won't ever improve on that.

I make a decent living operating just over 1% ROI, if we look at Adam Heathcotes figures it's probably as low as 0.2% ! If you're managing a consistent 5% trading the front 3 in the market your strategy is scaleable and now would be the time to up your stakes rather than wasting time thinking you can improve that % return.

JS said...

Thanks a lot for your reply. It helps to get some perspective from someone other than myself! I will start to calculate ROI even at this early stage out of curiosity from now on, my initial target and only monetary one to date is to reach £100 with minimal stakes. Once I have proved to myself that I can achieve this I will start to increase my staking gradually, probably something like %5 of my bank per trade, using a similar weighting system. Thanks again for your comments, much appreciated.

JS said...

ROI for Saturday was 1.03%. Thanks again for your post, it's given me some more confidence in what I am doing here.

O2G2 said...

Nice blog.....have enjoyed reading it.....I started trading on Betfair in 2007 and have come a long way since but my trading has been focused on cricket and golf primarily. Am currently expanding my portfolio to include preoff horse racing and tennis. And it feels like starting from scratch. But since I have been successful in the other sports I don't see any reason why I shouldn't be able to succeed at horse racing as well.
I like your idea of recording your trading sessions and reviewing them. It'll definately speed up the learning curve. So I have decided to do the same. Could you tell me which program you are using to do this and if you have a 2 screen setup, how are you recording both the screens?
Thanks in advance and good luck on your journey.

JS said...

Thanks for the kind words O2G2. The recording is all completed with Camtasia Studio 6. The recording area can be customised, so if you are using a multiple screen setup, you can drag the recording area over to cover all the screens. When playing it back in my media player, instead of playing fullscreen, I resize the player manually to cover both screens. I would advise using a powerful PC as the software is resource hungry whilst recording, particularly when covering more than one monitor. It's a great piece of software which allows you to encode directly as avi files, I encode to ffdshow, which I have now configured to give me about 5hrs per 1GB. I'd say you have a great chance of succeeding in the prerace markets, as your prior trading experience should have given you the mindset and money management skills. What you need now is the edge which I'm sure you can find if you're willing to work for it. Good luck!

kevinray said...

JS, this is a great blog and of great help. I literally started trading this week after 4 weeks of constant research. Its good to read a blog like this where we are talking in £1's instead of the 'big play' traders who talk in £1000's. This blog keeps it real and takes your head out of the clouds (for now..until 'we' are in the 'big play' bracket too lol).

Keep it going JS, its great!

JS said...

Thanks alot Kevin! Quite looking forward to my trading session this week. Best of luck with it all mate.

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