Success psychology

[ruthlessimon]

How is the arb created? From Exchange price shortening?

True - you've caught me there I've never really thought about it like that tbh. Cos yeah if I'm arbing early I'm not really interested in whether the exchnage price shortened, only that an inefficient price is being offered

[jamesedwards]

How is the arb created? From Exchange price shortening?

True - you've caught me there I've never really thought about it like that tbh. Cos yeah if I'm arbing I'm not really interested in whether the exchnage price shortened, only that an inefficient price is being offered

It's possible that bookies reposition prices at certain times of the day, eg perhaps when their offer or early price promo periods end.

Most likely though is that it's exchange driven. If so then you need to be looking at why people are backing horses at that time. What new info enters the market at that moment? Media tipsters? Going info? Trainer updates? Weather forecasts? So many things to consider.

[csewell1987]

Thanks for all the responses, a lot of info there haha. Sounds like I am approaching this wrong. I didn't want to automate until I had an edge to do that with as it seems a faster way to the poor house. My current setup is judging horse form and where the market may not have it right. This could have been ran in the morning daily (on a cron job or something) and would form my selections for the day to be placed via the API or another tool. That was my angle to try beat BSP which sounds like its not the done way based on what has been said here. Sounds like I need to approach it more from a betting pattern view? So tracking what can make markets move in the latter phases, where form has been already accounted for?

[ShaunWhite]

. That was my angle to try beat BSP which sounds like its not the done way based on what has been said here.

Everyone's trying to beat sp either consciously or via multiple bets (structural EV). If you're green at the start of the race then you've got a net position which is a value bet.

The only difference is the methods used to do it, trying to use form (fundamental analysis) to calculate your own 'correct' price and bet when you see value is hard. And it's a ton of work every day, on every runner (favs are the most efficency prices selection as there's more eyes on them). A more std way is for people to use order flow (aka supply and demend) to gain an edge by using the change in people's opinion over time rather having to know if any specific price (or participant) is right or not. A simple example of that would be how a horse behaves in the ring or going down. You might have worked out it's chances to n decimal places but if it's playing up then people will start laying it, you see that on the ladder order flow, and you profit from the drift with a quick lay and back. The accuracy of the price it was, and the price is moves to, are irrelevant.

Form etc is very much a punters' view of the world, as traders we're just providing a service to punters, offering money for them to bet against now, with the expectation that the price will be be higher or lower at some point in the future. That might be a seconds or minutes, but doing that is much easier than trying to predict if the price will eventually be 1.01 or 1000.

All that said there's a lot of different ways people do this, and we each find our own, so all the best deciding how to tackle the puzzle.

[stueytrader]

e.g. how do you deal with building a bank that is bigger than you have ever had before?

Once you get start to get consistent results, figure out how much capital you need to operate, the largest likely drawdown (and double it), leave that amount in the bank and withdraw the rest. It's really more about just doing your best each month and drawing the wages rather than building an ever bigger bank.

In my early years "psychology" became a bit of a catch-all term to describe what I felt was basically just an insecurity about ability, because once you achieve a consistent level of performance the 'psychological' baggage evaporates and it becomes just a job like any other. You just need to get to the point where daily gains or losses genuinely have no effect on you, because you 100% know for certain that over a month or a year you'll be in profit. I don't think anyone who's had long term success would say that have to consciously control their mind or need a yoga session before they sit down to work.

I suppose this issue also depends partly on where and how your wider finance situation sits.

For me personally, I have had periods in my life with less than 0 (i.e. debt) and other times with 0 debt and plenty in the bank left over. But in more recent years I've managed to see general growth in what I have in total (i.e. my total overall bank I suppose).

In addition, I have projections from all of my finance looking forwards over the months, eventually that would be years even. I do not earn everything from trading or betting and have employed income. I can see that I am slightly off what has previously been a 'high' level of overall bank. That was partly trading losses and partly external events e.g. buying my current house was a fair lump out, and still is every month!

I suppose it is a little Mr Crabs (SpongeBob reference) to keep looking at building bigger piles you own, but that habit is in me probably from times when I had nothing in the bank. Seeing it grow and having it there is feeling of security and accomplishment. I have 3 decent pensions I have not yet touched either, again a security as a general feeling.

The psychology aspect is reflected in some of those thoughts above I think. And the question of how it might directly affect trading and performance is another area, that is fundamental to us I suppose.

So, I do get your 'steady eddie' type of view of this, but personally I probably don't operate that way, and am still striving to keep building that background bank, and appreciating it!

[jamesedwards]

If you live in the UK and rely predominantly on trading for income then you also need to very carefully manage a consistent trading balance.

Those with no other streams of income are typically blocked from any significant deposit these days, no matter how successful they are or what assets they hold.