Betfair trading for beginners - Part 2 Mindset

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JollyGreen
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This is a reply to both Paul and Steven in relation to brain function. Thanks for the input guys I am pleased to have your thoughts.

I have not read the book in question but it sounds good. I would say to be cautious at this stage because you might, I reiterate, might, get side-tracked.

I am going to write a section on brain function and how best to deal with emotions. The method is simple, you do not need a degree in psychology to understand it but once you read about it you will start to see a few traits of your own in a different light.
Iron
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I think we are talking at cross purposes here. :)

I'm not advocating worrying about the possibility of loss.

All I'm saying is that one shouldn't let one's over-optimism cause one to over-stake. The fact that you haven't ever lost 10% of your bank tells me that you don't go in for kamazake-style over-staking. :)

'Two basic rules: (1) if you don't bet, you can't win. (2) If you lose all your chips, you can't
bet.'

Larry Hite
JollyGreen wrote: As for it being 10% of my bank, I can honestly say I have never experienced a spike so large that it threatened that much of my bank.
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JollyGreen
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Tradertrician wrote:
Here's a question or two for JG, Steven or any other profitable trader, considering the above, would it be fair to assume, once the mindset has been retrained, would it then be much much easier to spot opportunities in a market when it has been moved by the power of emotion? hence the line I have read multiple times 'it sometimes pays to go against the crowd'.

Paul
If I am reading your question correctly, this is something of a myth in my humble opinion. Let me explain. I will cover this in more detail in a later post but for now here is my answer.

You cannot go against the crowd where the "crowd" is the market and the movement associated with it. For example, a horse is drifting or steaming as the "crowd" moves the price. There is no profitable way I know of where you can go against this "crowd" as that way lies pain and empty pockets! What you can do is to lurk and let the "crowd" disperse to the extent where a moves breaks down and then go back the other way.

Please do not try to go against a trend, money talks and if a price is going up or down you will not be able to go against it....unless you like pain!
Iron
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Do you wait for the market to go in the opposite direction of the trend before going counter-trend, or would you use WOM to gauge when the market may be about to reverse?

Jeff
JollyGreen wrote: There is no profitable way I know of where you can go against this "crowd" as that way lies pain and empty pockets! What you can do is to lurk and let the "crowd" disperse to the extent where a moves breaks down and then go back the other way.
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JollyGreen
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Ferru123 wrote:Do you wait for the market to go in the opposite direction of the trend before going counter-trend, or would you use WOM to gauge when the market may be about to reverse?

Jeff
Neither
Tradertrician
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What you can do is to lurk and let the "crowd" disperse to the extent where a moves breaks down and then go back the other way.
Yes this is what I was partly getting at really, didn't explain myself properly. So lets say a heavily supported football team is very heavily backed week in week out by their fans and each time they force the price past the true chance of winning.

I assume an experienced trader would spot this immediately, ride the price down, get off, then go against the crowds opinion by laying as it's become a value bet, which is pretty much what you have stated above.

The other part was does it become easier to spot when your mindset is different from the punters you are up against or is it simply a case of the more experience you have with seeing these trends the easier it becomes?

I would imagine its mainly the latter
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JollyGreen
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Paul

When you have the correct mindset you will be seeing the market and its signals. When you have the incorrect mindset you will be looking at the market but missing the signals, seeing potential problems or both.

EDIT: Let me rephrase that. You will have the potential to see more and then you can learn and improve. I don't want to imply the correct mindset will make you successful overnight rather it will offer you the potential to learn and grow as a trader.
Tradertrician
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Thanks JG

Obviously I have read all over the internet that mindset was probably the main thing that makes or breaks a trader but to honest I'm starting to think it's much deeper than I had thought which really fascinates me.

I got about 25% of the way through the book trading in the zone but stopped reading it due to events happening outside of trading back in June, I keep meaning to get back on it, think I will get reading that again over the weekend.

Paul
Iron
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Care to elaborate? :)
JollyGreen wrote:
Ferru123 wrote:Do you wait for the market to go in the opposite direction of the trend before going counter-trend, or would you use WOM to gauge when the market may be about to reverse?

Jeff
Neither
steven1976
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JG,
Can you not just seriously offer one tip per week and we all follow?

I want to be your sheep. :D

:lol:
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JollyGreen
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steven1976 wrote:JG,
Can you not just seriously offer one tip per week and we all follow?

I want to be your sheep. :D

:lol:
Do you mean a horse to oppose or to trade a move on?
steven1976
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A pre race lay on a horse where you think the price is to low, like you occasionally post up. I always seem to either be away or see your posts too late. I realize you don't have a magic wand but be interesting to see if when jolly talks the markets move. The Nick Leeson of bf! :D I rarely play for a swing trade but I'd be willing to stay in a trade a little longer if I had the slightest idea of a donkey!
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JollyGreen
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I will try and do that if possible. I do look at the markets each day but circumstances often dictate I don't have the time to study them fully and then write a post. I am just looking at a race for today but it won't be for a drift.
Zenyatta
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JollyGreen wrote: Once your position is open you assess constantly and if it goes your way you take as much profit as possible. If it goes wrong then you close out and regroup. Simples!!
If only it were indeed 'simples!!' Jolly, but as me and no doubt hundreds of others have discovered after trying and losing for months on end, it's anything but 'simples!!' ;)

After 3 years of trying, I find that about the only races I can win on trading are big feature races. All the rest are just too hard. It seems I simply don't have the skill to assess when a position has 'gone wrong', and after 3 years of trying and failing, I'm unlikely to ever be able to acquire these skills.

All the low grade races exhibit big price spikes and 'whip-saw' effects, where the price gets pushed in and out by a big number of ticks. As an example, on the last race I traded (which was way back in Dec, '12!), I placed a back bet on something and the price spiked out by an amazing 24 ticks! (Yes, the price literally doubled!). At this point I was simply ignoring this nonsense, and sure enough, soon the price crashed all the way back down by a huge number of ticks. I gave up trading in disgust at that point, because I had lost thousands stopping-out on these price spikes. In Dec, '12 this was happening nearly every day!

Forgive me for saying so, but it certainly looks to me that traders are deliberately batting the price back and forth to generate artificial volatility - in my view, these constant 'whip-saws' and 'price spikes' would make it near impossible for most people to judge whether a position has really 'gone wrong' or not, except for a very few races where everyone can clearly see what's happening (i.e., big feature races).
Iron
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Zenyatta wrote: If only it were indeed 'simples!!' Jolly, but as me and no doubt hundreds of others have discovered after trying and losing for months on end, it's anything but 'simples!!' ;)
Maybe that's because you're over-complicating it. :)

The logic of 'I found it hard, therefore it is hard' doesn't really stack up...

Jeff
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