Worst downswing

Trading is often about how to take the appropriate risk without exposing yourself to very human flaws.
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rik
Posts: 1583
Joined: Sat Jan 25, 2014 5:16 am
Location: London

Was wondering what was everyones worst downswing and was it a significant percentage of your capital?
sa7med
Posts: 800
Joined: Thu May 18, 2017 8:01 am

I've been having a downswing as of late for a variety of reasons. Some unforced errors (such as the crash the other day), the lack of sports to trade and some new strategies i've trying out that seem to have a high variance. It's not significant relative to my bank because of bankroll management but it's probably the worst downswing I've suffered. This week I paid 104% in PC :roll:

EDIT: keep in mind im mostly automated
EDIT: I mean 104% commission not PC
Last edited by sa7med on Sat Apr 11, 2020 6:12 pm, edited 2 times in total.
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ShaunWhite
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When I started back in 06 my worst downswing was the whole farm. After that I didn't even log onto Betfair for 10 yrs. Since coming back to it my worst has only been a fraction of my capital because I started from a stronger position. I'm glad you said capital and not Betfair bank. What people have as a Betfair bank is totally irrelevant as its what proportion of your wealth you're investing in the project that's important. If you've said you're going to throw say 10grand at the venture then you wouldn't want or need all 10 in your Betfair account at one time.

To give you more of an answer you want though, I don't remember being down by more than about an average week's wages in the last 18 months or so. Mind you I trade over 900 selections a day (5 per race?) but only about 500 since the UK lockdown, so things aren't very volatile and down days are quite unusual.

It all totally depends on your style though I guess, your PLs with the massive fluctuations would freak me out, my is more like +2, +8, +6, - 1, +3 etc and I have very little drama. If I had a significant downswing then it would indicate that something was very wrong indeed.
rik
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ShaunWhite wrote:
Sat Apr 11, 2020 6:05 pm

It all totally depends on your style though I guess, your PLs with the massive fluctuations would freak me out, my is more like +2, +8, +6, - 1, +3 etc and I have very little drama. If I had a significant downswing then it would indicate that something was very wrong indeed.
yes i lost my bankroll many times but just reload so capital what matters really
you wouldnt make more overall if you increased stakes or your strike rate worsen too much?
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Derek27
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rik wrote:
Sat Apr 11, 2020 6:49 pm
ShaunWhite wrote:
Sat Apr 11, 2020 6:05 pm

It all totally depends on your style though I guess, your PLs with the massive fluctuations would freak me out, my is more like +2, +8, +6, - 1, +3 etc and I have very little drama. If I had a significant downswing then it would indicate that something was very wrong indeed.
yes i lost my bankroll many times but just reload so capital what matters really
you wouldnt make more overall if you increased stakes or your strike rate worsen too much?
What is the maximum % of your bankroll that your risk, or do you risk a large % of it on one market?

Sounds like you're over-staking. Have you taken more profits out than the amount you reinvest, so you're profitable overall?
rik
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Derek27 wrote:
Sat Apr 11, 2020 7:27 pm

What is the maximum % of your bankroll that your risk, or do you risk a large % of it on one market?
last few months ive been reloading/paying out to 15k whenever i dropped to around 10 or went over 20, cheltenham i needed more as bigger amount tied up, generally i just bet market to market hardly anything on the long term markets.
thats the amount id be willing to bet otherwise wouldnt reload to that but in reality only happens once or twice a week and then im looking to balance out quickly whenever sensible, say there was a big jump in price for what i think the price is wrong and likely will correct again i would take all of it or on tennis i could have 10k on low odds. makes sense only to have in your account what your willing to use i think eventually you might have "fat finger" or some malfunctioning
Derek27 wrote:
Sat Apr 11, 2020 7:27 pm
Sounds like you're over-staking. Have you taken more profits out than the amount you reinvest, so you're profitable overall?
Ive had the biggest downswings always after ive been doing well as result of overestimating my edge, trying to maximise. i think what can be underestimated is how easily can lose your edge when staking bigger. Start of last year I killed it on the greyhounds for a couple of weeks which looking back i was running fantastic. Then had a big downswing the following 5,6 weeks where i staked too big and lost my advantage as a result of that and didnt do well that period on the horses either.
Also last autumn i was relatively new to the Australian Racing and traded the Flemington Cup for the first time, I done very well on the races leading up and thought "this Australian racing is too easy i should go for it" went on to lose 28k on the "feature day". After that i had taken a more steady approach for a while, still now i need to be more sure of my edge to take big positions.
Even on the tennis I had my biggest losses following my best results, never the opposite. chase mentality obviously a disaster.
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Derek27
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Sounds like you're getting complacent after a good patch that leads to recklessness. I used to have that problem when I was inexperienced but managed to nip it in the bud while I was still on fairly small stakes.

Personally, if I had a bad run and lost 20% of my capital I would just reduce stakes by 20% instead of refunding. The big problem with reinvesting, particularly if you do it frequently and know you can reinvest if you lose a lot, is that it has the same effect of not having trading capital at all and simply trading out of your personal funds, without limit.
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ShaunWhite
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Derek27 wrote:
Sat Apr 11, 2020 10:01 pm
Personally, if I had a bad run and lost 20% of my capital I would just reduce stakes by 20% instead of refunding.
+1. When I started the second time I decided £nK was my limit (like any business idea you should always have a budget) and if it hadn't worked when that was gone then that was it, move on. So you can be damn sure I never got even close to -£nK because that would have been game over. So like Derek says when my capital dropped so did my stake. But actually I was only staking 5s and 10s for ages, if you can't do it with that for a year and make money there's no point going any bigger. My problem the first time round was thinking everything would turn out fine and my working capital was basically everything i had and it evaporated in little topups to quickly make mistakes go away.

Jeez rik you must have some deep pockets or be in a big rush to earn big money, chucking 5 figures around while you're still wrestling with issues like this seems crazy to me. 28 grand down the first time you trade a meeting, wow. There's just so many variables to consider, like how big your edge actually is, how likely you are to have x amount of drawdown, and the big one, what's the %age chance you're right about the other two.

Everything has a limit to how far it can scale and it's often not very much, and tbf two weeks or even two months doing well doesn't mean people even have an edge. What happens then is that people scale up after a good spell, just in time for the dreaded mean reversion. Smaller ups than downs.

Finally re risk, you really need to plan for 2 or 3 total losses a year, rapid comms over the internet isn't exactly the lowest risk way to do business so expect shit to happen. And if it doesn't then that's a bonus at the end of the year. That's why as well as the usual say 2% max liability, people shouldn't really be putting a big percentage of their bank down to do it. It's easy to get lulled into thinking I'll cut my losses at 2% only to find the internet glitches and 50% of your capital has gone down the Suwannee.
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ShaunWhite
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sorry rik I just noticed you joined in 2014, I'm teaching my granny to suck eggs by telling you all that I'm sure.
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gazuty
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rik wrote:
Sat Apr 11, 2020 5:43 pm
Was wondering what was everyones worst downswing and was it a significant percentage of your capital?
Worst downswing for me was Trump republican nomination - a five figure mistake, about 10% of that years profits. Thought it was a value lay at 10.0. Wrong.
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Derek27
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gazuty wrote:
Sun Apr 12, 2020 3:57 am
rik wrote:
Sat Apr 11, 2020 5:43 pm
Was wondering what was everyones worst downswing and was it a significant percentage of your capital?
Worst downswing for me was Trump republican nomination - a five figure mistake, about 10% of that years profits. Thought it was a value lay at 10.0. Wrong.
I would have risked my life for a beer that Trump would not get elected as president. Four years on and still can't believe it happened. :?
rik
Posts: 1583
Joined: Sat Jan 25, 2014 5:16 am
Location: London

ShaunWhite wrote:
Sun Apr 12, 2020 2:45 am
sorry rik I just noticed you joined in 2014, I'm teaching my granny to suck eggs by telling you all that I'm sure.
no worries ive been betting on and off for 10 years
i just dropped out of the 40% charge last year from forcing a lot of commission and having average results, since november my graph has been steady so I notice my risk tolerance has been going up again lol
rik
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Location: London

gazuty wrote:
Sun Apr 12, 2020 3:57 am
rik wrote:
Sat Apr 11, 2020 5:43 pm
Was wondering what was everyones worst downswing and was it a significant percentage of your capital?
Worst downswing for me was Trump republican nomination - a five figure mistake, about 10% of that years profits. Thought it was a value lay at 10.0. Wrong.
oh dear, was thinking to take a position based on him handling the virus situation poorly but his supporters seem immune to facts it hasnt mattered in the past that hes just lying constantly.
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ShaunWhite
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rik wrote:
Sun Apr 12, 2020 4:23 am
oh dear, was thinking to take a position based on him handling the virus situation poorly but his supporters seem immune to facts it hasnt mattered in the past that hes just lying constantly.
I think it was Trump himself that said he could walk into the street and shoot someone and it wouldn't make a difference, probably the only thing he's ever been right about.

The way to play this one was to realise he'd handle it poorly (a 100% chance if ever there was one) and lay him in early January. I think the situation all round is too well known now for there to be much value to be had, and he's actually shortened a hair again now the laying frenzy has slowed down.
Anbell
Posts: 2007
Joined: Fri Apr 05, 2019 2:31 am

I never bet out of my lane, but I laid Trump at 1.76 on March 5th. I thought it was incredible value.
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