Having The Courage Of One's Convictions

My trading this week has been disappointingly poor. As a result, I found it quite difficult to motivate myself. This morning was spent trading the greyhound market, as usual, but I found it hard going. I only made £11 in the two hours before lunch. I added a bit more late afternoon to finish with £20.

At the start of the week, I began to see some progress with my horse trading, but the losses I incurred on Wednesday and Thursday have somewhat dented my fledgling confidence. Consequently, I only traded one race today, scalping just over £1 in profit.

My problem lies in the fact that I am trying to identify significant swings - specifically, horses that are shortening in price. In actual fact, I'm quite successful at doing so. However, I am continually in conflict with a scalping mentality where I cannot help myself getting out when the general 'noise' on the trend temporarily takes the market against me. As a result, I am missing out on significant moves, many of which are over 10 ticks.

This failure to hold true to my convictions is costing me money, and I'm finding it quite frustrating.

One of the issues here is that these moves can take 3-5 mins, if not longer. Of course, I'm used to the frenetic last 60 secs of the greyhound markets where I'm in and out again within seconds. The mental strength needed to hold one's position just isn't there yet.

Also, there's an argument for NOT watching the market after placing my opening position. As the market jumps around the underlying trend, I am continually fooled into thinking that it's going to go against me big time. I'm beginning to wonder if I should walk away from the computer for a couple of minutes if for no other reason than to avoid the conflict between swing trader and scalper.

While trying to learn how to consistently identify runners that will shorten over the past few weeks, I'm been amazed how my picks consistently come in once the race is under way. Since I wasn't in the mood to trade this afternoon, I took the opportunity to monitor this. All bar one of my picks shortened by at least 50% in-running and the one that failed missed out by 1 tick.

This has been the case throughout the past few weeks. I haven't been recording the data as I go, but from memory, I think that more than 80% of my picks have halved in price in-running. Many of them have gone on to win. Granted, it is a pretty small sample in the grand scheme of things but clearly, there are trading opportunities there.

I'll continue to monitor for a few days, but I'm looking at setting up a separate bank, £200 say, where I will back 5% of it on selections I think will shorten, with a view to getting out with a 50%-100% profit in-running. This will likely start some time next week.

In the meantime, I'll see if Dorothy can find me some courage.

2 comments:

PhilipH said...

Yet another thoughtful and interesting post Alistair. Strangely enough, I was going to be busy preparing a meal whilst the 6.50 at Wolver was on so I placed another "fun" punt about 6.30 p.m. on Betdaq. I staked just a £1 "back" on Lucayan Dancer at 28 and set a £1 "lay" at 20 and just left it to run. I had a quick look a few seconds prior to the off - and I had a nice risk free bet running for me, at good odds. OK, the horse was way down the field but it just goes to show how the swings and roundabouts go wild at times!

BTW, my birthday is 19 Jan, so I too am a Capricorn. I am said to be a somewhat pessimistic type by those who know me closely. I do not argue against their view; I think it is fairly accurate. Are you a "glass half-full or half-empty" chap? I'm defo half-empty! In more ways than one...
Cheers, Phil

Alistair said...

Hi You Old Goat! :-)

Thanks for the comment. Early days so I don't know if anything will come of it.

I'm definitely a glass half-empty man. I'm in a constant battle with my depressive demons. Must be something to do with being born in the darkness of a damp and miserable British winter.