Sunday, 3 August 2008

I've lost my trading bank!

As the title states, I’ve lost my trading bank. Everyone can breathe easily though. I haven’t gambled it away!

Denise and I have been discussing whether we could afford to have a holiday this year. As I’ve said previously, my overdraft had become my trading bank on Betfair and therefore, a holiday seemed impossible. Therefore, I had a decision to make…..

I’m sure this is linked to the fact I’ve just finished reading ‘Reminiscences of a Stock Operator’ but I’ve decided to withdraw my whole balance from Betfair and spend it on a holiday for us!

For anyone who’s interested, we’re having a week’s break in Alcudia (Majorca) all inclusive at a 4 star hotel! We leave in 3 weeks time.

Now, this is obviously going to cause a bit of a problem for me on Betfair. I haven’t heard of many gamblers who can win money without having a bank to start with! However, I have a plan……….

This is probably becoming a bit bemusing to anyone who reads this blog but I’m changing strategy again! I’m even laughing myself now as I said I was sticking to my previous plan only last week but I’ve changed my mind (again!).

As I hinted at above, I’ve finished reading my first trading book. Before I started The Experiment, I’d read lots of material on trading but being honest, I was wasting my time. I’ve learnt more from reading Reminiscences of a Stock Operator than from anything else I’ve read. Thanks to Matt, Nick and Steve for recommending the book to me. I’d therefore recommend the book to everyone else who trades or is starting to trade.

You can maybe guess where this is going…..

I want to learn to trade properly! We all know how much difficulty I have had with reading the markets and I always end up in arguments since I find it hard to ignore the fact that certain horses are the wrong price on Betfair. However, one point I have made on numerous occasions is that if you were to build a trader from scratch, you would choose most attributes that I have!

Obviously, the one attribute I don’t have enough of is discipline but as I’ve read so many times now, this can be learned over time. I have much more discipline now than I had 5 months ago. I admit I’m still not totally disciplined but that’s just a part of me!

If we ignore the discipline point, my full-time job is a pricing analyst. I have a very analytical brain and I am better at mathematics than most people who trade. I also have a good knowledge of how markets work and how to look for trends and how trends on graphs work. I have a first class degree in financial economics and one of my courses was financial economic analysis which was based on the stock market. Lastly, I have a great knowledge of horse-racing.

On paper, I must be a dream trader! However, as I’ve shown so many times in the past though, I can’t trade. I’ve admitted it on here many times and lots of people have commented likewise over the months.

What’s changed now?

Basically, I want to learn. I remember saying during some of my early posts that I hated the fact that Betfair trading was just numbers. This is bullshit. My 9-5 job is just numbers and I love it. I sit and analyse numbers and trends everyday of my working life. It’s what I enjoy doing.

What I didn’t like at the start was that I couldn’t understand why the numbers move the way they do. After 5 months of watching the Betfair, I can safely say that no one knows why the numbers move as they do. Traders don’t need to understand why the numbers move. They just need to follow them.

Reading the book has brought back lots of things I learnt in my final year at university and it’s got my competitiveness drive going within me again. I haven’t spoken too much about my education on here but I’ve never failed an exam in my life. I had the best grades at my school, I won the prize for the best economics student in my 4 years at university and I was the only one in my class to get a first class honours degree. Since I started work, I’ve passed every one of my professional qualification exams and I’ve achieved an outperforming rating at work for the last 2 years.

Basically, I’ve never failed anything in my life. I’ve always been the best at everything I do. However, for some reason, I gave up on learning to trade very quickly when I started on Betfair.

Looking back now, it’s easy to see why I gave up so quickly. When I started The Experiment, I was desperate to win some money. After a few weeks of trying to scalp and losing, I was forced to find another way to win money. My natural reaction was to use my horse-racing knowledge and make some money from my knowledge. This has worked great and has given me some great highs and lows over the past few months. I’ve also had an amazing amount of fun bouncing ideas around with Andrew but when I started out on this adventure, I wanted to learn to trade.

After reading that book, something inside me has clicked and I now want to learn to trade again. I obviously know much more about Betfair now and how it works. When I was scalping before, I was trying to use BA Pro but only using the one click function. For example, I didn’t even try to use the laddering function or graphs function since I was still really trying to learn how Betfair worked.

I now want to get back to using BA Pro and trying to learn to use the laddering function to trade and learning how the graphs work etc. For example, I want to look for lines of least resistance to exploit like I learnt about at university and which I have read about in the book. I should be using my degree and analytical skills to my advantage.

I’ll do a post during the week concerning the book and some things I’ve learnt.

Obviously, if I’m learning to trade from scratch, I don’t need a large trading bank. I don’t have to win money at the moment so much, so I can relax and just learn to trade. I can play with £2 stakes and build up from there as my trading experience grows. Hence, I don’t need a large trading bank, so I can afford the holiday and still trade on Betfair.

That’s what you call a plan!

24 comments:

Iranian Giraffe said...

Hi Graeme,

nice to see your gonna give trading a go as like you said you really don't need a large bank to trade at all (especially if you back a selection first).
Like yourself I'm shite a scalping the market so I've only ever traded the prices and gone for ticks here and there which normally last a few mins, I must admit I was suprised when you said you never used your BetAngel anymore but then I suppose the way you were placing your bets on Betfair you didn't need to.
Many people find the graph option within BetAngel helpful although since I'm used to trading with a more detailed graphs (as I come from trading the forex markets) I find them a little basic but when I do eventually find time to start trading again on the horse markets I'm going to try to use the graphs myself as it should give a advantage over people who don't use it.
The "bookmaking" option within BetAngel is very good as well as it allows you to lay the whole market at prices you think you can get and then gives you your potential profit if all these odds/prices get matched, I've currently used this for Big Brother and I'm at least £1 up on everyone £180-500 up on a few and because of the market with Big Brother as I've layed the current entire market anyone else who goes into the house I'm automatically up on them for instance someone entered the house a few days ago and because I had layed everyone else for £60 total I was straight away £60 up on her and it says on the Betfair rules that they will be adding anyone else into the market that enters the house and also "any other" will be added at a later date so I will be up on that as well (currently layed everyone for a combined total of £180 now so anyone who enters the market I will be up £180 on them).
Anyway if I don't get to message before your hols have a good one and I look forward to see you trading the way most people do.

cheers
Mike

Anonymous said...

u're such a piece of crapola..enough with the stupid self analysis..just trade and make it work..all talk and no action!! what a waste of reading time!!!

Mark Iverson said...

Hi Graeme,

From reading your blog it seems that patience will be your biggest enemy.

There's a lot of people out there who have the attributes to be very successful at trading/gambling but unfortunately for them, they're in too much of a rush to get to the destination.

You may feel that you're wasting your time to begin with (18 months ago I was making £10 for 3 hours work) but if you stick with it and build gradually you can do it.

One note of caution though - don't blindly believe that because you've been successful before it will automatically happen in future - it will take time and hard work.

All the best and good luck,

Mark

Graeme Dand said...

Hi Mike.

Thanks for the comment. As Andrew said to me this morning, my posts are all becoming too familiar i.e. “full of enthusiasm and a change of direction!”

I love your quote that we are “shite at scalping”. lol

I agree that I am shit at the moment but this is what I’ve got to learn. No matter what strategy I want to use on Betfair long-term, I’m starting to think I can’t do it effectively without understanding how to scalp.

On Saturday, I wanted to back a horse but because it was backed from 23 to 13, I didn’t back it as I didn’t think it was much value at 13. If I could have understood the market better, I could have hopped on the gamble at some stage but as I’ve said before many times, I can’t read the market properly.

I agree that BA Pro does have many great features built into it which I need to start looking to use. I read the BA Pro manual last night which was enlightening considering I have had the subscription for 6 months already and never looked at the manual!

I’ve sort of been forced into this corner now due to my lack of a trading bank but it won’t do me any harm to learn trading for a few months. It’s just another chapter in The Experiment!

Cheers,

Graeme

Graeme Dand said...

LOL Anonymous!

I couldn’t agree more if I’m being honest……

I love the quote “just trade and make it work”. What the fuck have I been trying to do for the past 5 months!

“All talk and no action”. My blog isn’t meant to be an enjoyable read where I do my bollocks every time I trade.

“What a waste of reading time”. lol – As I’ve said before on here, if you don’t like the blog, don’t read it!

Anyway, glad you are enjoying the blog and keep reading. I may actually trade sometime in the near future or then again, I may not! Whatever happens, you can read about it on here.

Mr Crapola

Graeme Dand said...

Cheers Mark.

It’s nice to get a good comment after the last comment!

One thing I have shown everyone and myself over the last few months is a massive lack of patience. Part of it at the start was driven from the need to win money quickly but now, this need is no longer there to a great extent.

I now feel with little pressure to win money and with a little bit of patience, I can hopefully learn myself to trade the horseracing markets properly.

One thing I have shown throughout my Betfair experience thus far is a willingness to learn new things and to work hard to succeed at it.

I think I’m probably just going through what most people went through with Betfair in the beginning. I’m sure lots of traders tried millions of different things on their first few months on Betfair to try to find a strategy. I’m basically just doing the same.

I think the thing that annoys some readers is that they read other blogs (like your excellent blog for example) where traders are making large sums and it all looks so easy. When they read mines, they must have nightmares! lol

As you say though, when I read back at your early months, it was slow going. Same comment applies to Leon’s blog. I couldn’t really start at this level when I started out a few months ago but circumstances have changed, so I can maybe take a few steps backwards in order to fill in some gaps in my knowledge of Betfair.

Thanks for the comment and for dropping by!

Graeme

Anonymous said...

Hi Graeme,

LOL Crapola, as Boycott would say, a one post wonder without the wonder although it did make me laugh. Reading the title of the post I thought you were going to get another pep talk from your regulars!!

Good luck with your new approach, paraphrasing NN Taleb - Stone Age man didn't predict the invention of the wheel, because if he had it would already exist, it just happened by accident through trial and error. Maybe you should take the oppurtunity to play around with the form stuff separately and have singles and e/w and see how you get on.

Cheers, Nick.

Graeme Dand said...

Hi Nick.

Like you, I too laughed at Crapola’s comment!

I like that analogy you use. One thing I’ve always said is that I have no strategy. 5 months into The Experiment, and I still have no definitive strategy!

I do plan to continue to play around with gambling but this is basically what I did before I started The Experiment, so it didn’t feel right to turn this blog into a gamblers’ blog since at the outset, I wanted to learn to trade.

Thanks for dropping by and I appreciate you writing a comment. I was sad to read that another blog was stopping because of some abusive comments they have been receiving regularly. I think that was more to do with the great profits the guy was making. No chance of me receiving abuse on here for that! lol

Graeme

Anonymous said...

Yeah I've dipped into that blog a few times, got the impression he got a bit bored of it toward the end - just became a roll call of profits and losses. Maybe he should have posted less frequently and themed his post's a bit more. Hard to know what the abuse was but I suppose it's the name of the game, making 5k in a month sound like shelling peas probably annoys people who've done their bollocks on Betfair. Having said that I wouldn't do a blog as I'd be nervous of giving away my edges, so "respect due" for doing yours,

Good luck, Nick

Graeme Dand said...

lol...

If I had an 'edge' mate, I wouldn't have a blog either!

G

Anonymous said...

Hi mate - it seems you have a new direction each time i read the blog. lol!

As Mark says I think patience is going to be a hard thing for you though i hope not.

Again I echo what Mark says about starting slowly. I spent a good while trading just using £2 stakes. So many people seem to rush in with a big bank and before you know it you are losing it and fast. As Peter Webb has said numerous times, at first just try not to lose. I still am doing that! If you can trade with £2 stakes and get it right you will soon build up a good size bank. But if you can't trade and are using a £1,000 bank it wont be long till it is all gone.

The advantage I found of building my bank up from small beginings was that I did not have the added pressure when I got a trade wrong of losing a tenner which to me is a lot of money! Though to be honest I was as mad about losing 30p on a race back then as I was about losing £30 in a race on Saturday.

I remember telling someone back at the start I had had a nightmare race and lost £2 on a race. They said why are you wasting your time? Now they want to know how I can win £100 from 3 hours work when they dont get that from 8 hours!

When are you going to be trading as I guess you will still be at work? Will it just be the weekends?

BA Pro has heaps of features I don't use though I know I should look into them. I went to the Active Investors Conference last winter and Peter was saying then that you can use lots of different stratergies over a course of an afternoons racing. Unfortunatly I am still just using the one but as I get better at my trading which I think I am doing I plan to start looking at other areas such as the bookmaking and trading the fav and sing the graphs to look for trends.

You may also fiind the excel function of use - i never use it but I know others do.

Right time to order that book from Amazon!

All the best with the latest venture!

Leonthefixer

Graeme Dand said...

Hi Leon.

Cheers for the comment. As you have picked up on, I seem to have a new strategy every day! As I said above in a comment, when I started out, I needed to win some money quickly to ease pressure in another part of my life but circumstances have changed slightly now, so I can afford to relax and try to learn to trade in my own time now.

As you say, starting with small stakes is the way to go. Being honest, I’m not really interested in how much I make at the moment. Last night, I sat and watched a few races on BA Pro with the ladder and I quite enjoyed it. I could sort of see some trends and what was happening but it will take time before I fully get to grips with it. I didn’t even have to place a bet to learn a few things.

I’m only going to get a chance to trade at weekends and the odd day’s holiday off work as the evening racing will be ending soon. I’m happy to spend 2 months not winning anything as long as I feel like I am learning.

I read the BA Pro manual on Sunday night which was the first time I’d read it. The most interesting aspect for me was the Excel function. As I’ve said before, I have fairly decent Excel skills but my Visual Basic isn’t great, so I won’t be writing robots!

I think I may try to use Excel to graph my own trends. Not sure how easy it is to do but it’s something I’d like to look into for sure. Obviously, I need to learn to walk before I can run but it does look interesting…..

I’m amazed you haven’t read that book. I would highly recommend it. It was recommended to me by a few readers on here and I’m really glad I purchased it. Some of the quotes in the book hit home so clearly for Betfair and I’m planning on going through the book and pulling out all the quotes that relate to me. There are quite a few!

Thanks for the support. As I’ve said before, you’re blog was an inspiration for mines and still is!

Graeme

Anonymous said...

Does anyone know where I can find information on how to read the betangel graphs or is my only option to sign up to a course?

leonthefixer said...

Me again - I have been meaning to read the book for ages, I had been recommended it time and again but for some reason always ended up buying some other trading book. I had a look on Amazon and there seems to be a heap of different versions of the same book. Any chance you could let us know the one you read, there seems to be one that was published just recently????

I read your reply to my comment on an entry a few days ago - I plan do do a load of research into my performance starting next week when I have a bit more time inspired by your comment and reading Marks entries on his blogs.

With regards to the comment about readign the graphs from someone - I don't think there is anywhere that tells you how to read the graphs, I think it is for you to learn to read them and find out what they mean for you.

Mind Games said...

Hi Graeme,

Great post, for what it's worth I think you're doing the right thing spending your hard-earned profits on a holiday. If it means that you also have a strong motivation to learn how to trade well afterwards then that's a double bonus. Be sure to let me know if you find the panacea to trading woes!

I decided that I've had enough of my inconsistent results and I've booked onto Peter Webb's training course, so hopefully I can learn some proven techniques. I'm hoping that combined with the other pieces of the trading jigsaw I've been working on (such as dealing with losses) and reading blogs such as yours I'll actually come out the other end with some success.

Have a great holiday!

MG

Graeme Dand said...

Hi There.

I'm going through the same process at the moment.

I haven't found much material on the net to be honest. I've read the manual which didn't help a great deal either. I have been playing about with them and just concentration on one line at a time and tracking that. I've also been slowing down the refresh rate so I can see what is happening a bit clearer.

As you know, I'm still learning myself at the moment, so I can't really help too much.

As I learn more, I'll post up thoughts on the blog as I go. I've only had 1 night of practice though, so it will take time before I really understand how they work.

If you do manage to find some things out, drop me a note....

G

Graeme Dand said...

Leon,

I bought mines off Amazon also. My version was 2002 I think but I don't have the book to hand as I'm at my work.

I can't imagine it makes that much difference to be honest which publication you read.

I think your stats would be a great read for every upcoming trader. One thing that's clear to me is that you started out by trying to not lose and that's still clear in everything you do. Controling your losses is key to your performance.

When I was trading, my target was always to win more than I lose since I knew I'd suffer losses.

Interestingly, even after 1 night of playing about with BA Pro, I see how much of a disadvantage I was at with using the normal BF interface. It's not surprising I got caught on a few drifters as everytime I tried to close a trade, I was having to key everything in and the price had moved!

Agree with your comments re. graphs. I intend to spend time trying to get to grips with these myself over the next few weeks.

G

Graeme Dand said...

Mind Games,

I'd be really keen to hear how the course goes. When I started out, I thought about doing something like this but I didn't even know how Betfair worked, so I wouldn't have got enough from the course to make it worthwhile.

6 months on, I'm still not sure I'd get enough out of it as I haven't really spent any time trying to trade in the conventional manner yet!

I remember reading that Leon attended a seminar and found it very worthwhile, so I'd suggest you have a read of his blog posts to try to pick up some hints and tips.

Good luck with it though and I look forward to hearing how it goes.

If you can pass me any tips for trading, drop me a note!

Graeme

Anonymous said...

I think my favourite quote from Reminiscences is:-

"A loss never bothers me after I take it. I forget it overnight. But being wrong - not taking the loss - that is what does damage to the pocketbook and to the soul."

Ouch we can all relate to that one.....Nick

Graeme Dand said...

Nick,

There were so many quotes that related to me in the book, it was like a biography of my 5 months Betfair trading!

I was laughing when he was discussing throwing good money after bad and why this would never work. My whole trading strategy was built upon the principle of throwing good money after bad and averaging the loss as much as I can!

Arguing with the market was another common theme and I chuckled to myself a few times concerning this also. I’d have saved myself a few hundred pounds last month by not arguing so much with the market but I’m sure I’ve learned from it.

I’d like to go back through the book and pull out all the best quotes and do a post but as usual, time will be the enemy…..

I’ll try though!

G

Matt said...

Ruddy hell, you leave a blogger alone for a few minutes to let them settle and you come back to find a massive switch up and 20 comments!

Well, I like your decision, I liked anonymous' post (naughty but nice!) and I liked Nicks suggestion about tinkering, as NNT says stuff is discovered by tinkering and experimentation.

I read 30 pages of Reminiscences this evening, I must have read this book 5 times but it never fails to inspire and educate.

Make sure you hit the Market Wizards books next, you get a doubling of knowledge from those, they work well together.

As time goes by, I can't help but feel your understanding of what Livingstone means about being right and wrong will develop to new levels as you trade. I know the way I view what he says is different now to how it used to be. Right and wrong relates to direction of the market in a general sense for me these days... it's sentiment, it's not arguing with the market! Get it onside and you will have plenty of people helping you out for free..

Best of luck with the trading G, if I can help you out drop me an email..

Matt
Punt.com

Graeme Dand said...

Cheers Matt.

I’ve also been surprised by the amount of activity the blog has had recently but it really makes the blog worthwhile when you get such great advice and support. I also like the bit of banter you get and it helps keep me amused at work!

I’m going to spend a little bit of time re-reading bits of Reminiscences and trying to take out bits to remember and allow it time to sink in fully. The “sentiment” point you make is fully understood by yours truly now, so I’m hoping the arguing with the market has stopped! lol

I’m actually quite excited with this next chapter of The Experiment and I’m looking forward to learning something brand new. As I’ve said, I should be suited to a more technical approach to trading but it’s not necessarily the case that I should be good at it!

I’ve noticed the new post on your blog but as is usually the case with your posts, I need time to read it fully to understand it!

G

paul said...

hi graeme,

i recognise your thoughts from my own epxeriences.

you want to 'learn to trade'. is that enough? perhaps if you can understand why you want to learn to trade the plan may become clearer for you?

good luck!
Paul.

Graeme Dand said...

Hi Paul.

Thanks for the comment.

I nearly didn't see it!

Good question. I sort of hinted at this presviously on a post but at the moment, trading is just a hobby. However, I'd love to be able to take it further and make a living from it.

In order for this to happen or even get close to happening, I'd have to be earning a consistent profit from a strategy that was nearly bullet-proof (or at least was as close to riskfree as possible).

That's what I'm aiming for. I'm still not sure scalping is where I'll end up but I'm sure it's a skill that is worth learning.

Cheers for the comment and nice to see a comment from another reader.

Graeme