Monday, 28 July 2008

Review of July 2008

I usually start each monthly review stating whether or not I met my monthly target I set myself but as you know, I stated my target for the month when I did my last monthly review at the end of June.

I quote, “For July, my first target is to break through the £3k profit barrier (I need another £180 profit). Hopefully, assuming I make this £180 profit target, my next target would be to break the £1,000 profit barrier in the month.”

Well, as we all know, I didn’t even come close to breaking the first target and at the moment, £1,000 profit a month seems like a mile away if I’m honest! As the month progressed, my targets changed somewhat and overall, I’m not too disappointed with the month.

I’m disappointed with the loss in the month and I’m obviously disappointed with my loss of discipline but in many ways, I feel like I traded better than I ever have. If I had traded poorly throughout the month, my losses would have been in four-figures and I would have been really annoyed with myself.

There are lots of amazing stats from the month that can be used to show how good or bad I traded in the month. I think the one stat that shocked me the most is that I lost £1,900 on lost trades in the month. That really is amazing. When you take into account that is more than my whole trading bank and some, it is actually quite shocking if I’m honest.

I suppose the plus side would be the fact that I had just less than £1,600 in winning trades. As I mentioned to Andrew a few times during the month, I traded very well when I was heavily down for the day. On 4 separate occasions, I was at least £200 down for the day after a few races. I don’t care how good a trader you are, no one can cope with losing over 20% of their trading bank and trying to win it back all the time.

Another plus point would be the way I traded after a heavy loss. I’ve read lots about traders losing the plot and going on tilt. Luckily, my attitude is to get my head down and try to trade the best I can and in most days, this worked great. However, I think this is not sustainable and last week, the losses finally got to me a bit and I lost my discipline towards the end.

Last Tuesday probably summed up my month. I lost £380 on the 3rd race but apart from that, had 12 wins from 12 races and finished £162 down on the day. Losing £380 on a race is difficult to believe and it makes me annoyed even thinking about it. What the hell was I doing?

Here is a graph of my P&L this month:

This doesn’t make pretty reading and being honest, it’s an ‘ugly’ graph. As I’ve said previously, I always felt like I was chasing the whole month and you can sort of see why from this graph. A point that Matt and a few other traders rightly make is that I shouldn’t be paying so much attention to my P&L as it will lead me to chase losses.

I agree with this in principle but due to the fact that I was always down at the start of most days, this ‘chasing instinct’ was automatically kicking in. However, it didn’t affect my trading too much and I don’t think I chased losses too often. One thing that did affect me though was always being down every day. In the end, this is what beat me.

I think most traders who trade horse-racing would struggle to cope with the number of large losses I experienced at the start of many days. It nearly became the ‘norm’ to be £300 down before I started trading well and no one can sustain this sort of thing.

Here’s my overall P&L for The Experiment:

As usual, there are lots of other interesting stats from this month. Interestingly, I spent more time trading this month than the previous two months combined. I think the reason for this was the fact I was disappointed with the way I traded at the beginning of the month and I wanted to work harder in the second half of the month to redeem myself. Overall though, I probably should have realised it wasn’t my best month and not thrown myself into it so much towards the end of the month as this resulted in silly losses.

Amazingly, I traded 185 races in the month. This is compared to 76 races in June and 59 races in May. This can be attributed to two main reasons. As stated previously, I spent more time trading this month, so my output increased. However, I also traded far too many races that were not flat handicaps. I was attempting to trade every kind of race and this is probably my downfall this month.

Another interesting fact is the fact that I lost in 25% of the races I traded this month. This is up from 15% and 16% the last 2 months. This is a combination of trading too many races and trading too many races that are non-handicaps. I need to aim to reduce this figure to around the 10% mark over time to be really sucessful.

Whatever way you analyse the last month, it doesn’t make nice reading for me. To lose £1,900 trading races is criminal and the fact I only ended up £350 down is due to the fact I traded very well for the remainder of the month. That is what I must take from the month.

In summary, I need to find a way of stopping myself from losing £50+ on races when I read the market wrong whereby at the same time not diluting my riskfree bets by using smaller stakes.

Without pre-empting where I feel I should go from here, I think the time may be right to introduce some discipline into my trading. I need a robust staking strategy and an exit strategy when things don’t go my way. At the moment, I have neither…….


Anonymous said...

Two comments: firstly, the important graph is the one that shows how you've done over the last 5 months - it looks good ! Sure July was a blip - but view it as that. You have a tendancy to get hung up over a month; a week; a day or even a race (!) and put yourself under a huge amount of pressure. Let them go - it's only the long-term that matters... Secondly, find some way to get that discipline. If you need rules, limits etc. impose them - and stick to them. Once you have these and the confidence that they work, the next race, day, week or month won't matter - because you'll know that in the long run, everything will turn out fine...

Graeme Dand said...


I agree I heap huge amounts of pressure on myself every time I trade. Even this blog does that! However, I’m going to stop getting so hung up on how I do in the short-term so much and try to look longer-term. Obviously, this is easier said than done but I’ll try my best!

I need to install some discipline in my trading. I find punting easier as you just decide how much you want to risk and that’s it. When I’m trading, I sometimes use £5 stakes in a race and then I’m up at £100 stakes in the following race. I need to define some rules to follow.

Also, as discussed in your email, I need to decide how I deal with drifters. I want to define some rules. I need to limit my exposure to a set amount on every race as at the moment, my max exposure has become my whole bank! I need to decide when I continue to back drifters but after X amount, it becomes a punt at lower odds with lower stake as I lay off pre-race and take some money in running.

Obviously, the easiest thing for both of us would be to stop backing bloody drifters all the time but it’s not our fault the market never agrees with us. lol

I know everything will turn out great in the end as I have an edge…..just need to learn how to use it better!