Saturday, 31 October 2009

Racing weekend

Had a little go on the Aussie racing this morning and the liquidity was really good on the big races. I had no idea what to expect from these markets and started out with the impression they would be similar to the UK ones. This was a mistake that actually ended up costing me as I had a lay order stuck in a poor liquidity race that was not going in running and the market suspended. I lost about £6 on that one race. Lesson learnt and after speaking to Peter and Andy on the BA forum they gave me some much appreciated guidance on which races were worthwhile and on connection settings. The loss didn't really bother me at all as I knew it was something out of my control and would not happen again now  that I know which races to be extra careful in. I actually felt really confident I could make a fair chunk of it back, and didn't feel like increasing stakes or chasing it. This was a great feeling and it signified for me that I had truly accepted the loss and had just moved on calmly - a skill I have been battling to summon at will for quite some time. I stuck to the higher liquidity races and managed to keep profiting and reduce some of that earlier loss. Was really handy having someone to talk to inbetween the races, it helped ground myself more than anything. 

After some sleep I got up at about 1pm and following a little snack I was back on my PC again to catch some of these UK markets. I  think my confidence has reached a good level these past couple of days. Although I'm very careful of not being overconfident and careless. I went through a darker time recently and could not on occasions find the energy or motivation to trade. In almost stark contrast I now cannot get enough of it. I have this hunger for market experience and each and every market I trade is proving to be very enjoyable (doesn't feel like work at all). It really is a great feeling and although I know there will be many more ups and downs I think the attitude I've got at the moment is spot on for my development. It's hard to tell when your training yourself and this is where being part of the forum / blog community really helps. So I'd also like to take this opportunity to say thank you to everyone who has offered advice or comments, they have all contributed good or bad to where I am today. 

Deep down I now have this belief that despite what happens in each individual market I have an edge to profit in the long run, and that is a great feeling, one I must say I did not have before. I don't fear the markets as I used to and approach them much more positively than before. 

The operating system debacle
I've been really impressed with the OS changes, the dilemma I have now is which one do I prefer! Without a doubt Vista comes last but between XP and 7 I'm not so sure which one is better for my trading.  XP is lighting fast and looks really old school after I stripped it down to the bare minimum. However 7 is equally fast and looks / feels impressive. The main issue I have though is that XP only recognizes 4 of my 8GBs of RAM. For this reason alone I thought I should lose XP and just simply dual boot 7, keeping one for trading. It's hard to tell whether having 4 or 8 GBs ia actually making any difference though, and if anything XP still looks faster despite recognising less RAM. I will keep experimenting with them both for now and can only expect 7 to get slower as it gets more cluttered. Haven't got around to installing Linux yet but I will do as soon as I find some time. 

My trading screen is feeling more comfortable, I have made a slight addition of just below my ladders. This did come in handy today and it gave me a more objective view as to where punters and traders money is likely to go. Here is a picture of the screen layout, notice the old school WinXP/2000 look! 

I think I have reached a point now where I can start increasing stakes gradually with both the racing and football, and that 10% of my bank is adequate for trading purposes. I'm still a little shy of my 20 pound racing bank after the Aussie racing incident, so when I hit 20 after each session it will be adjusted accordingly. Doing it race by race would be better but it does makes things unnecessarily complicated, particularly if I'm trading a busy card. 

Won't be trading tomorrow as I'm due to be working. My schedule at work has now changed again but it's not so bad as it gives me random weekdays off where I look forward to trading more UK racing markets.  

Thursday, 29 October 2009


First day back trading the horses for a while with mixed feelings in regards to my performance. The profitability was good however my new rigid set of rules were not fully met. I will need a few more sessions to get back into things before I would consider myself ready to start increasing stakes. I also felt my focus often wavering mid session and dropping considerably towards the end. My new rules are much more specific and when I was applying them quickly early on things were running very smoothly. The longer the session went on the more I noticed my bad habits creeping in, which is why I decided to not trade the full afternoon card and take some time to relax instead. I actually came back from a trip to Denmark late last night and feel that I was still a bit tired from that. I'm glad I gave it a go though, as the new approach is looking promising. Particularly as a couple of bias' I am trying to reduce (scalp and back orientated) were noticeably less frequent. I managed a couple of drifting swing trades that I found quite satisfying.

I decided to make a few changes to my PC in the evening as my free Windows 7 upgrade arrived this morning. I created a couple of partitions, one for Win 7 and the other for Win XP, whilst still keeping the Vista partition as is for backup. The plan is to use a stripped down version of XP solely for trading, and 7 for everything else for a couple of weeks. If all goes well Vista will go and I will also install a Linux OS on anoher partition. This would be just for my interest as I've read much about it over the past couple of years and would like to give it a go. From what I gather Vista is the most resource hungry OS so I'm expecting the changes to optimise my system. Let's see how it goes.

Sunday, 25 October 2009

Football Sunday

Have used today to focus on some football tactics I've been developing recently. I've decided to setup a separate £20 bank for the footy and intend to keep it separated from the racing from now on. The staking plan will be increased similar to the racing, although I feel that the footy account will grow faster judging by today’s performance and where I'm at with the racing. It will be interesting for me to see which sport is in the lead in say 6 months and 12 months time having both started on equal banks.

It was a rather odd day as although I profited and did not lose on any match, I did not feel particularly comfortable with some of the risk involved. I recycled my £2 stakes many times and used a combination of prematch and inrunning scalping tactics on all of the matches. I felt like I got the balance of when to be passive and aggressive much better today.

The inrunning stuff, although calculated and well worked, was where I felt most uncomfortable. I was using a lay to back tactic on the winning team trying to catch the resistance, this worked quite well and by offsetting my bets I could even leave the PC at times and come back to find I've been matched. The risk here was minimal and I managed to profit on every match, but the profit was not great. We're talking 1 tick scalps plus the odd time when I did not get filled I scratched or took a 1 tick loss, collectively the green was there but not a great ROT. I liked the scalability aspect as I could of easily used £100s or even £1000s in most of these markets without standing out.

I then experimented with back to lay scalping on the winning team, which was of course more risky and profitable. The market is moving in your direction which is a big appeal, but a goal from the trailing team would knock you back quite significantly so you have to pick your times very carefully. As it turned out my cautious approach paid off and I managed to only get caught out twice, however on both of those matches I found good scalping opportunities later which managed to get me into the green. I'm still undecided on this tactic as if I was using larger stakes I do not feel it would be worth the risk, and on a different day I could have had many more goals causing large dents in my P&L. Do not think this is a trading style I feel will pay off in the long run so I will stick to the lay to back lower risk style for now.

The prematch scalping is where I feel most comfirtable. I can see myself raising stakes here sooner as I now have a larger sample size and it all looks good to me so far. This is the only footy tactic so far I feel I will definitely be sticking with although I am looking at testing out others. I like trading tactics where an opinion on the teams ability is not necessary, although being a big footy fan and knowing a fair bit about most teams I'm trading forming an opinion is almost automatic. I think looking at so many matches and knowing the results later is starting to give me a better idea of whether the prematch odds are value or not. I feel the better I get at this, the more it will benefit the prematch scalping, as I could use this as a factor in determining whether a team's price will come in or not. 

Here is a quick screenshot of the footy trading screen. It is similar to the racing screen but I have replaced the charting with a browser displaying livescores and some other info:

Thursday, 22 October 2009

New approach

The learning process is progressing well. I'm on my fifth and final book covering trading psychology, which is Brett Steenbarger's 'The Daily Trading Coach'. I must say so far this book has been the most useful for me, not so much for the theories and ideas, but more so in a practical sense (in regards to applying techniques to introduce and sustain reconditioning). It is arranged in a lesson format which is great for separating and focussing on developing specific skills.

My trading time has suffered somewhat as I am trying to get through all of the material first. I think by now I have learnt from the mistake of just trading for the sake of it, without having specific aims for each session. If I kept doing that I would almost certainly repeat all the bad habits without addressing them properly or even acknowledging them at all. Approaching the close of the year, with the racing cards reduced in both quality and quantity, it's not such a bad time to be focusing on establishing a good learning process. Although I will be trading in order to build up market experience, I can only expect it to take some time to digest and apply what I am currently learning.

One aspect of my new approach is implementing an effective feedback process where I go over each trade and learn from the process regardless of the result. The most valuable trades would be the unprofitable ones, as this is where I can focus on why it did not go well and bring to light a solution next time I am in a similar scenario. Previously I had a poor feedback process which involved watching videos and making detailed notes (too detailed), it was ineffective as I soon ran out of time to do this for each trade and effectively compromised the analysis to the extent it was not achieving its purpose. As a result I have refined the process and am also gathering information for each type of market scenario I encounter using the favs SP as a primary key. Overtime I am expecting to build up a database which will help me identify potential scenarios for each market I encounter.

The more I learn about this game the more scientific and less mysterious the whole process seems. Having said that though, and having faced my fare share of challenges in life, trading is one of the most challenging tasks I have ever committed myself to, with my motivation to succeed growing as I evolve.

Thursday, 15 October 2009

Reprogramming the mind

It's been an interesting week or so.

Whenever I have had spare time after work instead of trading or market analysis, I have been learning an awful lot about the psychology of trading and myself. I have been looking for answers to many questions in regards to my behaviour and responses to certain scenarios. My learning has mainly revolved around two authors, Brett Steenbarger ( and Mark Douglas ( who have both written extensively on the subject. Their books have been a real eye-opener for me and I find that going through them once just is not enough to take in all of the information.

As you can imagine with so much material to get through, I have tried new ways of learning over just reading for hours on end. I thought back to a learning styles course I went on with work a couple of months ago where I was, surprisingly to me, told my preferred learning style is auditory, followed by logical, visual and kinetic methods. I then looked for ways to adopt material to learn more effectively. I found a very useful website for converting pdf or doc (or any text files) to audio mp3s ( I have now converted over four books and many short articles in this way and have found it to be nothing short of excellent for me. At times when it is difficult to concentrate on reading or even carrying a book around all I need to do is whack in my earbuds and I automatically start to focus and learn within seconds. I have found it particularly useful on my train journeys to work (about 2 hours a day) which was previously occupied with listening to music. I now use this time to go over material. The robotic style voice can be a bit odd at first but I got used to it pretty quickly, unexpectedly its unique tone is now starting to have a positive effect on my focus. I plan to use this to my advantage by making an mp3 of all my rules and listening to them before a trading session to get me into the right mindset.

I almost feel like I am brainwashing myself at times and I have noticed a difference already in a few situations in my day to day life, for instance my reaction to making a mistake or when somebody else makes one, I think has changed forever. My attitude towards taking a loss is where I am placing emphasis at the moment and although I haven't tested this in a trading environment yet I do feel much more objective when looking at the market and my results, and am not just agreeing that it is about the bigger picture but actually believing it. A large component is the fear factor and it will be interesting to see how all the material I have gone over in regards to this has made a positive impact yet. I am quite a confident chap and consciously never felt like fear was a factor, however I have realised that this is obviously not the case, as subconsciously I must be fearful in some degree, if for no other reason my inexperience is more than enough to trigger this.

I plan to start trading again this weekend onwards and feel that although the break was important it is also important not to leave it too long as I need to be building up my market experience. I will also resume the evening sessions so all in all I plan to be trading about 3 sessions a week depending on how the week pans out.

I will leave you with a link to an article I found amusing earlier this week on a YouTube method to predict the current X-factor winner. Happy trading everybody and I'll see you in the markets soon!

Monday, 5 October 2009

Disapointing Week

I was hoping to make some headway since my last post as things seemed to be getting better. I was even entertaining the possbility of upping my stakes, perhaps even as soon as next month. In those seven days I actually managed to make a loss of 66p. I felt rather disappointed at first but on reflection I have learnt so much from these sessions, and if somebody had told me on Monday last week that for 66p I could learn so much, I would have bitten their hand off.  

I'll start with the football as it is much simpler. This is the first P & L where I have been using my new rule of close @ KO no matter what. And sure enough the first match I traded (Man. City Vs West Ham), Tevez scored in the first 5 minutes, they could have been 2 or 3 up by then to be honest. If I had held on to my position IR I would have lost a large percentage of my stake. I was happy to see my new rule justify itself so quickly and can't actually believe I was so silly as to not have implemented it sooner.

The other match that stands out was the U20 USA Vs Cameroon where I profited with 67p by KO, there were so many gaps in the market here and I just kept putting in value orders at the front of the queue and got matched pretty quickly. The other matches were simple scalping efforts, as you can see I had a couple of scratch markets where at KO I just closed any open orders.

The racing was not quite as straightforward. As you can see I made an overall loss of £1.74. Taking a closer look at the P&L I actually profited on every race except one, and surprisingly this one race was not the race I was most disappointed with. The relatively massive loss of £7.95 was due to me having an open lay order in the market when the API temporarily lost connection about a minute before the off. Regrettably having no backup close strategy yet, I was helpless until I had been reconnected to Belfair. After a couple of attempts to log back in with Bet Angel I received a message stating that the API was having trouble and that I should try to connect with another connection mode. I decided to try to close with my browser but by the time I logged in and got to the race it was already over (7f). Although I knew it was bad luck that this sequence of events all seemed to happen together, It did bother me more than it should of and I felt deflated. I was amazed at how one event like this can change your whole perspective and I just couldn't find the strength to focus and trade well after that. I stopped trading and felt like I would try again later depending on how I felt, after a couple of hours I resumed and made a consistant profit on 6 consecutive markets. I was then forced to stop as I was planning to go out for the evening.

I know I would never be in such a desperate situation if I was using larger stakes. I would not only have adequate funds in a Betdaq and /or WBX account to hedge, but also have the option to close over the phone as my bets would not be under the minimum permitted. In addition a laptop with a 3G Internet connection would also be available in case my ISP was at fault. With minimum stakes I do not feel this is necessary but it was good to experience my first API crash as I did not realise how jutified it is to have a sound backup . As Leon has mentioned, having a laminated information sheet is a great idea, as that minute passed so quickly, every second saved counts.

Now onto the biggest disappointment of them all. I started to trade Sunday and things were going very well indeed, in fact looking at the P&L you would notice a clean sweep. Normally this would be great but what the P&L doesn't tell you is that I closed one of these races IR!! - Uttoxeter 15:05. I could not believe what I had done and within 10 seconds I was lucky and got matched. I then traded the Prix de L'Arc de Triomphe as I had been looking forward to this race all day. While I was glancing at slow motion replays of Sea the Stars' magnificent performance, I found a moment to reflect and felt truly shocked and decided to stop trading for the day, at that point the card had almost finished anyway. My mindset had somehow clicked into a routine I thought was finally starting to fade.

Last time I closed a race IR I went a bit militant and repeatedly analysed my videos until I came up with what I called the escalating downward spiral, and a solution for each stage of the spiral. I feel that other factors were present this time that were not considered previously. In particular the large loss from yesterday was still somehow bothering me;  and also the fact that I knew I was not ahead for the weekend was always on the back of my mind. Psychologically I did not accept the loss on this market, as I would usually do, and before I knew it, I was getting matched IR. It's almost incredible how easily these traits dominated my decision making process so quickly having been dormant for so long.

I have therefore decided to devote sometime to work only on my mindset, and as a reward I will trade when I feel ready. There are quite a few exercises and other techniques I have come across whilst reading up on the subject which I will now structure into some kind of lesson plan. Had not tried many of them as I felt it was not necessary at the time, but after this weekends performance I will be be looking to use whatever is effective for me.

Ten-pound Trader
Peter's little experiment has been a real eye-opener for me. At the moment I'm averaging roughly 20p a market whilst using predominantly £2 stakes. In terms of ROT it works out to just over 1%. I felt this was good but should be improved before increasing stakes. It seems I was wrong about this. After 2 sessions he was averaging 11p per race with £10 and £11.76 stakes. Granted he was also trading with large stakes on another account and probably wasn't trying too hard, but even taking this into account my ROT is actually quite healthy and I should not be wasting too much energy on trying to improve this. I also had another experienced full-time trader comment on my Relections post about this. Collectively I can see that once I feel my discipline and mindset are better I should start to increase my stakes gradually. This will be done incrementally, something like 5% of my bank and will also go down if I have a losing day.

So in summary more work on my mindset is necessary before I feel I can progress. I started reading Mark Douglas' first book 'The Disciplined Trader' today and am finding it very good so far. After that I will implement some techniques gathered from a few different sources and review my progress before I start trading again.
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