First small red month – is this normal?

[sudek]

I’ve been trading full-time for years, mostly on the pre-race horse markets. I once had a losing month back then, but it was at a time when my edge was fading and I was making mistakes (chasing losses, etc.).

Since December I’ve switched to in-play horse racing with GPS data and have averaged about €4k/month profit. Now, for the first time since then, I’m seeing a red month over the last 30 days.

Question: Is it normal for long-term professional traders to have a losing month, or at least for one specific strategy to finish a month negative—especially a more betting-style in-play GPS strategy? Markets don’t feel different to me; it just seems like a run of more bad days than good. How do you treat this—variance or a sign to downsize/tweak?

Thanks for any insights.

[Kai]

I'd be concerned

But not much point in asking others, only you know what your potential variance is and whether you're impacted by seasonality

[sionascaig]

Question: Is it normal for long-term professional traders to have a losing month, or at least for one specific strategy to finish a month negative—especially a more betting-style in-play GPS strategy? Markets don’t feel different to me; it just seems like a run of more bad days than good. How do you treat this—variance or a sign to downsize/tweak?

Thanks for any insights.

My worst run was for 4 months in a row for a profitable strategy.

The occasional 1 month loss I wouldn't really blink at, especially if, as you say it was small relative to your wins.

Risk should be correlated to returns so if you aren't making the odd loss probably not an optimised strategy?

Anyhow, if you have not done it already, download your bet history and breakdown your data to try & get an insight where it is occurring - maybe its all Maiden races at Newton Stewart & sorted !

If you identify a particular scenario can always exclude or reduce stakes for that. I'd recommend the later as will continue to collect data on what could just be a blip..

I don't have any particular insights for the GPS stuff as not yet graduated to that level )

[jamesedwards]

I’ve been trading full-time for years, mostly on the pre-race horse markets. I once had a losing month back then, but it was at a time when my edge was fading and I was making mistakes (chasing losses, etc.).

Since December I’ve switched to in-play horse racing with GPS data and have averaged about €4k/month profit. Now, for the first time since then, I’m seeing a red month over the last 30 days.

Question: Is it normal for long-term professional traders to have a losing month, or at least for one specific strategy to finish a month negative—especially a more betting-style in-play GPS strategy? Markets don’t feel different to me; it just seems like a run of more bad days than good. How do you treat this—variance or a sign to downsize/tweak?

Thanks for any insights.

I've had one losing month in the last six years which was due to a single big loss in a US race where TPD transponders had been swapped.

Have you been playing at RMG tracks? What is the difference between your profitability of ARC track vs RMG track races? TPD recently switched back on RMG data because it remains very useful despite the coordinate data remaining unreliable. But if your automation relies on good quality coordinate data then you might be better off removing RMG tracks until the issue is resolved.

[ANGELS15]

I’ve been trading full-time for years, mostly on the pre-race horse markets. I once had a losing month back then, but it was at a time when my edge was fading and I was making mistakes (chasing losses, etc.).

Since December I’ve switched to in-play horse racing with GPS data and have averaged about €4k/month profit. Now, for the first time since then, I’m seeing a red month over the last 30 days.

Question: Is it normal for long-term professional traders to have a losing month, or at least for one specific strategy to finish a month negative—especially a more betting-style in-play GPS strategy? Markets don’t feel different to me; it just seems like a run of more bad days than good. How do you treat this—variance or a sign to downsize/tweak?

Thanks for any insights.

I do a lot of DOBBING and back to lays throughout the year (since 2016) and it has been profitable. However I find Septembers have been losing months (only small losses but in the red). The best I've managed in a September is to break even.

I put it down to seasonality in the horse racing season.

[sudek]

Thank you very much for all your answers, guys.
I should have phrased my original question a bit better – not about reducing volume (since no one here knows exactly what I do and how I do it), but rather simply about whether it’s normal to have the occasional losing month with a more betting-style in-play horse strategy using the GPS platform.

It’s hard to find many discussions about this on forums – I guess because people don’t like to share their losses. So reading about your experiences was really helpful.

For context: just before this red month, I had my two best months of the year (around €6,000–7,000 each), so maybe this is just a natural correction. Your answers have more or less reassured me that this is nothing unusual, which is good to know.

By the way, I don’t do RMG, and when I used to trade pre-race horses I wasn’t really used to seeing this kind of variance – that’s why I was especially curious about the perspective of betting-style in-play professionals.

Thanks again!

[ShaunWhite]

So long as your 3/6 months aren't showing a gradual decline then if you've got a biggish daily variance then I wouldn't worry about a small lossy month. I probably have one a year on avg.

Do you measure your result stats with any recognisable metric, p-value, t-statistic etc. They factor in your varience so might be some comfort/concern.

Good months/bad months..... Yeah randomness does play tricks on you sometimes but the averages always have their way in the end.