ROI

[WelshMage]

Since joining BA, I have traded many football games; over 200. My starting bank as a fairly experienced trader was £3000. My current bank is £3131.87, a ROI of 4%.

I watched one of Peter's videos on trading and bank roll but there is not much discussion on building a bank or ROI, unless I have missed it.

Is the 4% ROI that I currently have good? Bad? About right? My strike rate is 56% win, 44% loss. I am aiming to get this to 60% win rate and keep it there if possible with controlled trade management in-play. I only trade football for now.

I would be interested to know the journey of successful traders and how they built their bank over time.

[ShaunWhite]

4% (net / ((sum back stakes) + (sum lay stakes)) sounds reasonable.

As for "building a bank", that's just being profitable, not something you do until you've made money to do something else. I wouldn't take much notice of anyone who uses that phrases personally.

"strike rate" is pretty meaningless unless your losses and gains are the same size. You can make money on 2% SR or lose it on 98%.

[WelshMage]

Thanks Shaun

[Anbell]

4% (net / ((sum back stakes) + (sum lay stakes)) sounds reasonable.

As for "building a bank", that's just being profitable, not something you do until you've made money to do something else. I wouldn't take much notice of anyone who uses that phrases personally.

"strike rate" is pretty meaningless unless your losses and gains are the same size. You can make money on 2% SR or lose it on 98%.

I've been puzzling about this term a lot too ("building a bank") - it's so weird to me. e.g "arbing is a a good way to build a bank"

[jamesedwards]

I've been puzzling about this term a lot too ("building a bank") - it's so weird to me. e.g "arbing is a a good way to build a bank"

It's all-too easy to underestimate the impact of stake on ROI% when trading on an exchange. It's much easier to put 2% on a £10 'bank' than it is to put 2% on a £10,000 'bank' but people don't realise this until they try.

[Derek27]

4% (net / ((sum back stakes) + (sum lay stakes)) sounds reasonable.

As for "building a bank", that's just being profitable, not something you do until you've made money to do something else. I wouldn't take much notice of anyone who uses that phrases personally.

"strike rate" is pretty meaningless unless your losses and gains are the same size. You can make money on 2% SR or lose it on 98%.

I've been puzzling about this term a lot too ("building a bank") - it's so weird to me. e.g "arbing is a a good way to build a bank"

I think the idea is you build your bank through arbing and then lose it through betting or trading.

[Anbell]

4% (net / ((sum back stakes) + (sum lay stakes)) sounds reasonable.

As for "building a bank", that's just being profitable, not something you do until you've made money to do something else. I wouldn't take much notice of anyone who uses that phrases personally.

"strike rate" is pretty meaningless unless your losses and gains are the same size. You can make money on 2% SR or lose it on 98%.

I've been puzzling about this term a lot too ("building a bank") - it's so weird to me. e.g "arbing is a a good way to build a bank"

I think the idea is you build your bank through arbing and then lose it through betting or trading.

I can see clearly now, thanks

[WelshMage]

After an exceptionally good weekend, my £3000 starting bank now stands at £3397.54, a 13% ROI.

I understand the points made but after doing this for 4 years, bank management along with discipline is extremely important.

Anbell makes a fantastic point. As your bank increases, if you stick with staking 3% of your bank on any trade, it is much harder to do when that stake looks high. My spreadsheet tells me now that I should be staking £101 (3% of my current bank) on my next trade. I will do it because I know it is the only way to consistently make money if you have a proven system and believe in it in the long run. But Anbell is so right, putting over £100 on a trade seems crazy. However, I made just shy of £4k last year following my rules (those which I have learned from experienced traders over the last 4 years and have soaked into me as if I were a sponge).

Of course, we traders are in control of our trades. We are not handing over money to a bookie and hoping for the best. So, I absolutely know I won't be losing all of my stake if the trade is going wrong. I may lose a maximum of 60%. But when a trade is going well, I am often certain of getting a profit 80% or even bigger than 100% if the odds exceed 2.0. But I will confess now, because the stake is so high, I often exit a trade early if I am in green and fail to maximise my profit.

To help with this flaw of mine I am reading the famous trading psychology book. Trading in the zone!!

[ShaunWhite]

Don't push the stake if its having a negative effect. I wouldn't increase it just because some random amount you happen to have in your account dictates it, increase your stake when you feel like your current stake isn't making you focus enough.

It just comes down to confidence in your ability and with experience. It won't be long before 100 feels like tenners did, and eventually you'll probably stake 000s not being especially bothered being up or down by a few hundred. Stake enough to care, but not so much you care too much. Let it grow organically rather than being forced.

... But your % of bank just shows a problem I have with that word too, what is a "bank"? Is it an amount you allow yourself to spend a month, the most you plan to invest in the venture before quitting, or your entire net wealth. For most its just a random figure that they'll probably top up anyway. Stake according to how you feel not what you've saddled yourself with.

Last bit There isn't a word of the above that isn't basic common sense you probably knew already, but we hear "Pro Traders" use words like bank or bank builder and people assume it makes sense because they're supposed to know what they're talking about. But let's face it Welch, most aren't exactly going to appear on Mastermind so always have the faith in your own common sense and question everything they say forensically. Like WTF is a "bank" when it means different things to different people?

[ShaunWhite]

As your bank increases, if you stick with staking 3% of your bank on any trade, it is much harder to do when that stake looks high.

Presumably a max of 3%. You don't approach every situation with the same degree of confidence so some might be 1/2% and a max confidence trade might be 3%. But isn't the 3% supposed to be the max risk not the stake? You might stake 25% of your bank but only plan to lose 3 max or stake 10% and plan to lose 3 max too.

[Crazyskier]

I've been puzzling about this term a lot too ("building a bank") - it's so weird to me. e.g "arbing is a a good way to build a bank"

It's all-too easy to underestimate the impact of stake on ROI% when trading on an exchange. It's much easier to put 2% on a £10 'bank' than it is to put 2% on a £10,000 'bank' but people don't realise this until they try.

Wise words.

Many times I have had supposed 'eureka!' moments with my penny-pinching strategies, only to find that they simply will not scale, for a variety of reasons.But I'm still trying!

CS

[Anbell]

After an exceptionally good weekend, my £3000 starting bank now stands at £3397.54, a 13% ROI.

I understand the points made but after doing this for 4 years, bank management along with discipline is extremely important.

Anbell makes a fantastic point. As your bank increases, if you stick with staking 3% of your bank on any trade, it is much harder to do when that stake looks high. My spreadsheet tells me now that I should be staking £101 (3% of my current bank) on my next trade. I will do it because I know it is the only way to consistently make money if you have a proven system and believe in it in the long run. But Anbell is so right, putting over £100 on a trade seems crazy. However, I made just shy of £4k last year following my rules (those which I have learned from experienced traders over the last 4 years and have soaked into me as if I were a sponge).

Of course, we traders are in control of our trades. We are not handing over money to a bookie and hoping for the best. So, I absolutely know I won't be losing all of my stake if the trade is going wrong. I may lose a maximum of 60%. But when a trade is going well, I am often certain of getting a profit 80% or even bigger than 100% if the odds exceed 2.0. But I will confess now, because the stake is so high, I often exit a trade early if I am in green and fail to maximise my profit.

To help with this flaw of mine I am reading the famous trading psychology book. Trading in the zone!!

I probably didnt

[WelshMage]

All very sound advice. Many thanks.