During this little sabbatical away from Betfair and trading, I’ve obviously been thinking about where things are going and what I’ve learnt from the first 5 months of trading. There were also a few questions from Stan I dodged in my last post, so I need to answer them. I’m going to discuss 5 topics in 5 different posts:
1). What do I want from trading? Is it a possible career or just a hobby?
2). Can I trade effectively with my knowledge of horse-racing and form? For example, is having an opinion on every race a positive or a negative?
3). Can I learn to lose ‘better’?
4). Trading v Gambling
5). Tipsters – a few people have mentioned this in comments recently – what is my view?
1). I think the first point I need to make is that I didn’t spend all my time at school and university working my ass off to sit in the house and trade every day for a living. I have decent career prospects and I’m still fairly young at 26, so I would be crazy to think about throwing away a good career with guaranteed future income to try my hand at trading in the next few years.
However, am I as passionate about my work and career as I am about horse-racing and gambling? Clearly not I would say and therefore, I’d love to be able to trade/gamble full time to make my living. I always think that footballers are lucky in the sense that they get paid for doing something they love doing every day. Well, if I could ever make enough to allow me to trade/gamble full-time, I’d consider myself very lucky also and I’d jump at the chance.
So, trading/gambling is a definite possible career for me but not when I only have 5 months experience and not when I have a decent job. Being honest, to give up my career to switch to full-time trading/gambling, I would have to be 99% certain that I could make £50k+ a year from doing it. Obviously, this is more than I earn at the moment in my role but I’m obviously going to work my way up over time here and I have a guaranteed pension and future benefits and most importantly, guaranteed future income for the next 34+ years if I want it. People with my qualifications and experience don’t end up on the dole very often!
Clearly, trading/gambling is a hobby for me. If this hobby ever starts to earn me a consistent income stream and I can increase this by scaling it up, I would definitely look to do this. So much of gambling and trading is to do with scale. I’m not daft enough to believe that it is easy to scale it up but one thing I have said on here is that I want my final trading strategy to be scalable.
I know there are traders out there who trade using £1k stakes and manage to make £10-£20 profit on a race. I can make this profit with £50-£100 stakes on a race quite easily, so I have an advantage over most scalpers already.
When I generate a £300 riskfree bet on a race with £100 trading stakes and I turn that into a £150 profit on the race when my horse romps home, imagine the damage I could do with £1k stakes! Obviously, damage would be the appropriate word as I’d probably bankrupt myself with that size of stake at the moment but over time, this is what I would be aiming to achieve.
I think that answers this question. In summary, it’s a hobby for me and always will be a hobby until it reaches a point where I can earn consistent profits and an opportunity exists to scale it up to earn much larger profits. I’m still nowhere near the first point yet, so until I master that, no point in worrying about scale!