Where's My Pocket Money?

I wasn't going to trade today because I'm really struggling to pick up any momentum as I discussed yesterday. However, having reached £1000 I'd agreed with my daughter that she could have 5% of my weekly winnings as pocket money. With my trading being so bad this week, she was in line for the staggering sum of 7.5 pence! Consequently, I felt obliged to try and get her some more.

Well, I lost £5.99 so she owes me pocket money! LOL!

Today didn't get off to a good start. I was immediately down over £6 after the first race and this just set me off. I was super hesitant in the next few races and didn't get involved. I managed to claw £1 back then I lost over £8 in the 3rd race I entered. £13 down within the hour! Given my state of mind and my lack of enthusiasm, I was never going to get all that back.

I skipped from race to race, unable to spot anything and when I did, I was unable or unwilling to get involved. I lost a further £5 in another two races and I was getting to the point where I was past caring.

I did manage to pull a fair bit back, not through trading, but by backing the odd runner to place using some pre-race trading profit. This served to more than double my winnings in those races.

I even tried the win markets again, this time taking Leon's advice and not getting involved until 2-3 mins before the off. I won on two and lost one so for once I was in profit in those markets, but I cannot say I enjoyed the experience.

So an end to an extremely difficult week and one which I'm glad to see the back off. The trouble is, the whole of July has been difficult so I cannot say I'm holding out much hope for next week.


Graeme Dand said...

Hi Alistair.

Apologies for the lack of comments recently. I’ve had a few things to say but not had the time to write them!

I’ve been reading with interest your struggles in the win markets. You appear to be very similar to me in the sense trying to look for 1 or 2 tick profits is very difficult.

When I started out, I tried my best to scalp like Leon and I found it too difficult. Without going over old ground, I think what Leon does is amazing and getting in and out of the market in a few seconds is great as it is very, very low risk. If you only hold an open position in the market for a few seconds, you can’t really lose that much since the market can’t move too much in such a small space of time.

Obviously, Leon only enters the market when he sees a sure-fire winner so to speak and when he is wrong (which isn’t often), he exits the bet quickly. I think that’s a great skill and one that I’m quite envious of!

However, there are other ways to make money from scalping. You have developed a strategy from scratch for the place markets. You don’t copy Leon there and yet you have developed a strategy from scratch which enables you to win money. Therefore, you now need to develop your own strategy for the win markets.

One thing that makes me chuckle when I read Leon’s blog and your blog at times is the fact that you guys don’t like randomness in the market and big swings in price. Leon uses £900 stakes though, so I can really understand why he doesn’t like randomness! He is forced to wait for the market to settle down until a few minutes to the off and then trade on very small price movements.

I’m the complete opposite to Leon. I play on the 10 minute pre-race bit when you get massive price swings and randomness. Obviously, if I was using £900 stakes, I wouldn’t be so keen but with £100 stakes, I like big swings as this equals big profits.

I think you too are better positioned in this market since your stakes won’t get lost in amongst the massive stakes that occur within the few minutes to post time. I like trading horses with not that much liquidity as we can have more control over what happens. Trading horses with £5k liquidity is difficult and we are just guessing what way the market goes.

At the moment, every thing you do, the opposite happens. Well, without sounding smart, reduce your stakes and start doing the opposite to what you think. This will stop the losses in the short-term at least and buy you some time. I did this when I was struggling and it bought me some time to think.

One thing you haven’t discussed on here too much is how you actually trade. I have managed to read between the lines though and I’ve a fair idea I think. One big difference between the place markets and the win markets is the fact that the win markets allow traders to manipulate the market much more since they are always so efficient.

In the place markets, you could spot obvious moves in prices easier due to the fact that there is less liquidity and the market was much less efficient pre-race. Anytime there was spoof money in the place markets, it stands out like a sore thumb.

In the win markets, there is spoof money everywhere as traders are trying to manipulate the market like I do. For example, if I can see a horse that is likely to drift, I’ll try to make it look strong for a few seconds on Betfair without trying to get caught out. Other traders (maybe yourself) see it looks strong, push down the price by backing it, I then lay low and remove my cash waiting to back it. It then jumps through the original price and I then back it and I have my riskfree bet.

This sort of thing is so common in the win markets, it’s unreal. I still see myself as a novice to a great extent but I have acquired these sorts of basic skills. At the moment, I think you maybe lack these sorts of basic skills and you need to watch the market more and try to understand what is happening. You need to develop your own skills as the other traders out there will eat you for breakfast!

There are ‘real’ trends in the win market and there are ‘pretend’ trends. Leon appears to have mastered the art of separating the two and every trader that makes an income from trading on Betfair is good at separating the two of these things. I’m still learning but unlike Leon in many aspects, I’m trying to go a step further and learn the skills to create ‘pretend’ trends and by using oddschecker, try to find ‘real’ trends before the Betfair market spots them.

As you know, I’m less experienced than you on Betfair, so you can take what I’m saying with a pinch of salt but I wanted to share a few thoughts. You appear to be in the same position as I was at a few months ago where you are searching around for a strategy and I wanted to put a different light on things for you.

Anyway, whatever happens, good luck from here mate. I think you can make it trading the win markets but you need to open up your mind to new ideas and realise that you have a lot to learn. As this month has shown and as I keep saying, I’m learning everyday I trade at the moment. Some people may see this month as my worst month (I’m still in deficit!), but in the long-run, this will definitely go down as a great month for me as I have learnt so much and I’ll be a much better trader in the long-run for it.


Alistair said...

Thanks for the comprehensive and, as usual, very constructive comment Graeme.

You're right in that the strategy I use for the place markets relies on the very jumpiness to be found there. Or at least it used to.

As my stakes have increased, I have found it more and more necessary to take an active lead in the market, rather than sitting and waiting for a spike to come and get me. The larger the sum I place in wait, the greater the chance of someone moving to wait in front of me. This results in the spike stopping at them and not reaching me.

That said, I have a much better understanding of the place markets now than I did 3 months ago and can, usually, adjust my strategy depending on the market.

As I was saying to Leon the other day, I don't particularly want to look to 1 tick scalping as my means of winning in the win markets. This means much larger stakes to make it worthwhile - which I'm not prepared to do at this stage.

In the place markets, I frequently take upwards of 10 ticks and more. That's the type of trading I would like to be able to do in the win markets for little or no increase in stakes.

Given that I actually quite like the volatility of the place markets, it seems to me that an equally jumpy win market would suit me. What I need to do however, and haven't managed it as yet, is to learn how a jumpy win market behaves just like I've learned the place markets.

As you say, it is easy to identify 'spoof' money in the place market. Indeed, I specifically go looking for it as more often than not, I will take it on. Perhaps I need to do the same thing in the win markets.

The other thing that is frustrating me at the moment is that each trip to the win market generally sees me lose any gains I've made in the place markets.

Although this months has proved difficult for me, having got to the stage where I'm regularly winning in those markets, I'm finding it hard to justify spending the time necessary to learn the win markets as it inevitably means I'm not winning in the place markets. Having got to the stage where some reasonable amounts cash is coming in, I am loathe to have to start again - though I know I must.

Fortunately, my daughter is going away for nearly 3 weeks so I'll be able to completely focus on my trading without any distractions - assuming I can get my tax return done in the mornings.

Thanks again for the feedback.