My definitive guide to trading as a Newbie. By a Newbie...

[Halliday]

Very well written piece Tom, and written in a style .that is easy to digest and understand .

I like to keep things simple, and think sometimes there is a tendency to over complicate the basics of trading, and make it seem more difficult then it actually is.
The most important thing is to enjoy what your doing, as I'm sure for many on here we look at trading as a means of escaping from the drudge of a "9-5 " job .

Trading can be quite lonely , so chose a sport that you have an interest in , if your trading manually , learn the basics of the ladder and set it up the way that suits you .

Start with a small bank , and only put in what you can afford to write off.

Always "green up " and never chase your loses.

Keep a record of your trades,and put as much or as little information on as you think you need I use a spreadsheet, and include matched back and lay stakes/ odds .. +/- difference in tick size , race type and highlight loses etc

Don't over complicate things or Spend too much time thinking about your trades . You will find eventually that the best trades come intuitively. You don't need to spend hours prepping your trading day

Don't put extra pressure on yourself by setting daily targets , or posting P/L

Don't let it be all consuming and take over your life

But as Tom says the two most important things are ...

1. Executing your trade, which will only come with experience ( and probably losses !!)

2. Confidence and belief in what your doing. It's amazing if you've had a run of successful trades, how easier the next one is . You'll find you'll almost execut it without thinking !!

I'm an optimist and believe anyone can do anything if they really want it . And I genuinely think there are so many other things in life more difficulty than trading sports markets .

Take things slowly and get good at the basics before moving in to different strategies , And if you can can find someone likeminded to share your journey and have some fun along the way all the better .

Be your own man , and pick and choose the advice you take

Finally going back to something I always say . Enjoy it .. if you have to pour your heart out on here and are full of angst . Then no matter how much you want it . It's not for you .

I've been using BetAngel since June ( roughly 7 months ), when I was made redundant, spent a couple of weeks getting to know the functions etc ( with the help of Dallas and others ) , and just use it in ladder mode .

And I can honestly say there hasn't been a day when I haven't enjoyed it

So to all new traders .. Enjoy !! Enjoy !!. And err well Enjoy !!

[Geordie]

I would add ... "don't be afraid to walk away for the day."

Yesterday for instance, I didn't feel my head was right (not fully focused), so after 4 races I stopped trading.

I will return today more focused and trade better.

Wise words right there. Not to be confused with having a run of bad trades though. Probability suggests you could have 4 losing races in a row but if those trades were well managed and your head was still in the game then there's no reason not to carry on.

Spot on, Tom, and thanks for putting my point across better than me

[Yorkshire Pud]

Very well done Mr Tom. You can write really well. I would have benefitted massively when I stated out from this.

Cheers mate. I proof read it and thought to myself "wow! It actually looks like I know what I'm talking about!".

My eBook comes out next week if anyone is interested? Discount on pre-orders...

Good post though mate. I sat next to you on the LTT course.
It sounds like your trading is going better than mine but that won't be difficult .

And I sat across from both of you!!

[macawboy]

Wow, that is one hell of a post Tom.
Any one starting out will benefit tremendously by reading it.
Wish you had been around to post this when i started out.

[Trader_Tom]

Wow, that is one hell of a post Tom.
Any one starting out will benefit tremendously by reading it.
Wish you had been around to post this when i started out.

You can tell the shops quiet can't you haha. It's nice to see some positivity on here. Everyone in the market looks to be ready to hang themselves!

[Halliday]

Tom .. I'm sure your musings will make people approach trading with less trepidation. A lot of the posts on here while helpful do tend to give the impression that trading is very very difficult , and make it sound complicated , when really I believe it isn't

Whilst accepting that few will make a comfortable living out of it , I still think that it's possible to make a profit and work towards it being your main source of income.

Any post that simplies things and the approach to trading .. Discipline, confidence and being able to execute your positions and your well on your way to making a success of it .. keep it simple !!

[Trader_Tom]

[/quote]And I sat across from both of you!![/quote]

My memory is shocking

[Trader_Tom]

Enjoyed that Tom, I just wanted to comment on the edges part also. I think it comes down to semantics and definition mostly. I think effectively you are suggesting taking a journey, doing plenty of decent things along the way, where you then arrive at your destination having an edge. And it is possible, to develop an edge, difficult, but doable.

There's some downside though, and that is, if you don't get an understanding of what an edge is, when you are winning (hopefully) over time, you might not understand why - and that is important for when things don't go so well. I do think there's some mystification about edge, but it is no secret and it's easy to understand.

It's where the trades/bets you place have a positive expectancy (+EV). "value" to use a popular term. Most people understand this in betting terms. In trading terms, especially your guide/style and much pre race trading/scalping, you are describing a gradual optimisation of your actions in the market, where, when they are aggregated, the points at which you open, close and stop out trades have on average a risk/return profile that is beating their implied probability. You are curating your bets basically, with a variety of constraints and time dependencies, so that they end up having value. You are as good as your decision making process in this regard. If you make money, you have an edge, if you don't, you don't...but I think understanding this is a decent idea.

Best of luck, fwiw I think you have a decent attitude for this and I enjoyed the guide. I've done this myself a long time ago, but I'm not sure I would succeed in doing so today, but I'm older and heavily battle worn!

Your definition of an edge in my opinion is spot on. What I am finding though is most peoples definition of one isn't realistic and they blame their lack of success on not knowing "that one weird trick!" that they believe everyone profitable is keeping from them. Realistically, as far as manual trading goes. Your edge is made up of lots of smaller edges that form the bigger picture.

You hit the nail on the head when you said is that you have to have an understanding of WHY you are winning and even more importantly, why you're LOSING. If you're losing then you are probably succumbing to multiple other peoples edge in the market whether that be by having a poor opinion on price direction or whether you suck balls at executing your trades. The fastest way to succeed in most things in life is to eliminate our weaknesses as best we can. If you're honest with yourself when you ask the question "Is my execution and position management good? Am I following my rules?" and the answer is yes but you are still losing then it makes sense to try taking the opposing opinion on those types of losing trades.

[Trader_Tom]

Tom .. I'm sure your musings will make people approach trading with less trepidation. A lot of the posts on here while helpful do tend to give the impression that trading is very very difficult , and make it sound complicated , when really I believe it isn't

Whilst accepting that few will make a comfortable living out of it , I still think that it's possible to make a profit and work towards it being your main source of income.

Any post that simplies things and the approach to trading .. Discipline, confidence and being able to execute your positions and your well on your way to making a success of it .. keep it simple !!

Cheers mate. One thing that's amazing is I haven't come under fire yet! I was prepared for a barrage of abuse

[felixbrown]

I'm new to trading having come from a Matched Betting background two months ago and think this post is spot on. I took my biggest ever loss on a days trading yesterday -£150 which was 10% of my bank which is pretty much the maximum i am willing to risk.

If i could add anything to this thread its that i feel its important to quit while your suitably ahead. A few times over the last few weeks (and twice this week!) ive quickly found myself fourty or fifty quid up early in the day and instead of being satisfied with that ive ended up pushing for more and taking unnecessary risk just to hit a target of £80 or £100 that i didnt even have at the start of the day! From a matched betting point of view, picking up fourty quid profit on a weekday would be a job well done and I'd go do something else with the rest of my day and i think thats something i shuould be carrying forward with me, ive always preached the benefits of slow and steady consistent profits and ive completely ignored that this week and its cost me heavily.

Dealing with such a big loss was also a new experience for me and has left me quite rightly taking a much closer look at my whole approach to trading and ive taken today off completely from trading just to take break from it avoid the temptation to go chasing losses and risk losing more - even though i was dying to get stuck into the Under market on the city game this afternoon!

Anyway probably stated the obvious to the vast majority of you but either way thanks for a great post mate

[Bluesky]

Good post felix, if you read some of the posts by the pros on here such as LeTiss, they always say that dealing with the psychology of all this is far more difficult than learning the mechanics of trading as such.

A good example of this is contained in your post, its a shock to lose 10% of your trading bank in one day, and I think you did well not to chase that loss and trade again today. I suspect a very large percentage of new traders would either have tried to get their money back yesterday or today, and as a consequence go on to lose even more.

I think you made a good decision to get your head back on straight before venturing back into the markets, confidence is extremely important when trading, and your confidence is bound to be a bit low at the moment.

[felixbrown]

Good post felix, if you read some of the posts by the pros on here such as LeTiss, they always say that dealing with the psychology of all this is far more difficult than learning the mechanics of trading as such.

A good example of this is contained in your post, its a shock to lose 10% of your trading bank in one day, and I think you did well not to chase that loss and trade again today. I suspect a very large percentage of new traders would either have tried to get their money back yesterday or today, and as a consequence go on to lose even more.

I think you made a good decision to get your head back on straight before venturing back into the markets, confidence is extremely important when trading, and your confidence is bound to be a bit low at the moment.

Yeah definitely VERY low right now, but when i look back at all my trading over the last two months if anything id become a bit over confident very quickly. Im not doing much in the way of trading today either but will be getting on the NFL later as that is by far my favourite and most lucrative sport to trade on, hopefully a good run of trades tonight will ease me back in to it!

[Trader_Tom]

I'm new to trading having come from a Matched Betting background two months ago and think this post is spot on. I took my biggest ever loss on a days trading yesterday -£150 which was 10% of my bank which is pretty much the maximum i am willing to risk.

If i could add anything to this thread its that i feel its important to quit while your suitably ahead. A few times over the last few weeks (and twice this week!) ive quickly found myself fourty or fifty quid up early in the day and instead of being satisfied with that ive ended up pushing for more and taking unnecessary risk just to hit a target of £80 or £100 that i didnt even have at the start of the day! From a matched betting point of view, picking up fourty quid profit on a weekday would be a job well done and I'd go do something else with the rest of my day and i think thats something i shuould be carrying forward with me, ive always preached the benefits of slow and steady consistent profits and ive completely ignored that this week and its cost me heavily.

Dealing with such a big loss was also a new experience for me and has left me quite rightly taking a much closer look at my whole approach to trading and ive taken today off completely from trading just to take break from it avoid the temptation to go chasing losses and risk losing more - even though i was dying to get stuck into the Under market on the city game this afternoon!

Anyway probably stated the obvious to the vast majority of you but either way thanks for a great post mate

You're welcome pal.

Confidence is very important but so is viewing your trading in probabilistic terms. You have to remember that every trade is a completely separate scenario that is in no way attached to the previous, or the next trade. By cutting your day short after a win you are technically missing out on the future opportunities if you do indeed have an edge in the market. On the flip side, if this is what you feel is needed to help you build confidence and move on to the next day happy and content with your trading then it may be the way forward for now.

In the long term, ideally you would like to finish a day knowing that you took every opportunity and everything that the market had to offer, whether it be an odd loss or win at the end of the day or even a string of them.

My approach would be to try and see if your poorer results are a result of overconfidence from the good start you had to the day. If this is the case, slow yourself down and be aware of how you are acting in the market. If you can honestly say you're still trading with a level head then there's no reason why you should call it a day as from a probabilistic viewpoint, you're no more likely to win or lose than you were before. The same goes for losing. Try to detach your emotions from wins/losses and you'll see things much much clearer.

I am aware though that this is easier said than done. Especially after a particularly large win/loss.

One thing I would like to say though is that at 2 months in it is unlikely that you are profitable. I'd advise reducing your stakes right down until you have a good idea of where you are in regards to profitability. Use the auto staking tool within Bet Angel or decided what size stakes you are going to use for each tick size and stick with it. This will give you a good idea of where you stand without losing too much money. Focus on improvement and learning for now and the money will follow later. This should take the pain out of trading and allow you to take a realistic view on the market.

[Nero Tulip]

I'm new to trading having come from a Matched Betting background two months ago and think this post is spot on. I took my biggest ever loss on a days trading yesterday -£150 which was 10% of my bank which is pretty much the maximum i am willing to risk.

If i could add anything to this thread its that i feel its important to quit while your suitably ahead. A few times over the last few weeks (and twice this week!) ive quickly found myself fourty or fifty quid up early in the day and instead of being satisfied with that ive ended up pushing for more and taking unnecessary risk just to hit a target of £80 or £100 that i didnt even have at the start of the day! From a matched betting point of view, picking up fourty quid profit on a weekday would be a job well done and I'd go do something else with the rest of my day and i think thats something i shuould be carrying forward with me, ive always preached the benefits of slow and steady consistent profits and ive completely ignored that this week and its cost me heavily.

Dealing with such a big loss was also a new experience for me and has left me quite rightly taking a much closer look at my whole approach to trading and ive taken today off completely from trading just to take break from it avoid the temptation to go chasing losses and risk losing more - even though i was dying to get stuck into the Under market on the city game this afternoon!

Anyway probably stated the obvious to the vast majority of you but either way thanks for a great post mate

The culprits here were the targets you set. Targets in trading are never a good idea, as your decision making process becomes controlled by them, rather than the market signals you base your normal process on.

Yes, quitting ahead can actually be sensible - but only if you are aware that your focus has changed from process to rewards (and you are a discretionary trader basing decisions on what you see), or you are tired. Other than that, each trade is best seen as a tiny point on a continuous very long line where you make a repetitive judgement for each new point on the end of it. The line ends when you retire, or run out of money...hopefully retire! Imagine the line to be drawn smoothly as you make each execution well. Thus, your actual target becomes adding to your (smooth) line of well executed trades a bit each day, rather than an amount of profit. Wins and losses will occur along the way, that is part of the process.

I don't work to targets, I just bet until I'm tired each day, or my algos have run out of races to bet on! When I was more reliant on discretionary trading, I would pause when I began to pay too much attention to my P/L figures, trying to squeeze more out of them for no good reason. "Manage your money, or it will manage you".

---
Edit - more content as I re read the post and saw more stuff.

Please don't take any of this personally, it's written to add, hopefully to what is a good thread started by Tom for everyone. I don't know you or what/how you are trading, take it or leave it as a couple of pennies in the pot from an experienced campaigner.

Your two posts on this thread Felix mention "profit" quite a few times, as it is your focus (which is fine, we are all here for that), but don't forget, you are not owed this profit. If you happen upon good trading habits, and are thoroughly systematic about execution and learning, then you might eventually arrive at them. But along the way (and also after you find profitable strategies) you are going to have to deal with the random path your P/L will take, and trust me, it can be unbelievably random (I'm jesting, but you get my point). Losses are a fact of life, like Tom says, stake sensibly, because they have to happen, and they'll go on for terrible runs far longer than you might think is sensible, despite doing the right things. Maybe do some googling on monte carlo simulations of trading profits, and watch the twisted nature of your potential returns to imagine how much of a test this could be to your bank roll and your mentality, I'm not sure it ever gets easier. Good luck.

[Trader_Tom]

I'm new to trading having come from a Matched Betting background two months ago and think this post is spot on. I took my biggest ever loss on a days trading yesterday -£150 which was 10% of my bank which is pretty much the maximum i am willing to risk.

If i could add anything to this thread its that i feel its important to quit while your suitably ahead. A few times over the last few weeks (and twice this week!) ive quickly found myself fourty or fifty quid up early in the day and instead of being satisfied with that ive ended up pushing for more and taking unnecessary risk just to hit a target of £80 or £100 that i didnt even have at the start of the day! From a matched betting point of view, picking up fourty quid profit on a weekday would be a job well done and I'd go do something else with the rest of my day and i think thats something i shuould be carrying forward with me, ive always preached the benefits of slow and steady consistent profits and ive completely ignored that this week and its cost me heavily.

Dealing with such a big loss was also a new experience for me and has left me quite rightly taking a much closer look at my whole approach to trading and ive taken today off completely from trading just to take break from it avoid the temptation to go chasing losses and risk losing more - even though i was dying to get stuck into the Under market on the city game this afternoon!

Anyway probably stated the obvious to the vast majority of you but either way thanks for a great post mate

The culprits here were the targets you set. Targets in trading are never a good idea, as your decision making process becomes controlled by them, rather than the market signals you base your normal process on.

Yes, quitting ahead can actually be sensible - but only if you are aware that your focus has changed from process to rewards (and you are a discretionary trader basing decisions on what you see), or you are tired. Other than that, each trade is best seen as a tiny point on a continuous very long line where you make a repetitive judgement for each new point on the end of it. The line ends when you retire, or run out of money...hopefully retire! Imagine the line to be drawn smoothly as you make each execution well. Thus, your actual target becomes adding to your (smooth) line of well executed trades a bit each day, rather than an amount of profit. Wins and losses will occur along the way, that is part of the process.

I don't work to targets, I just bet until I'm tired each day, or my algos have run out of races to bet on! When I was more reliant on discretionary trading, I would pause when I began to pay too much attention to my P/L figures, trying to squeeze more out of them for no good reason. "Manage your money, or it will manage you".

100% agree. Targets, in most cases are bad news especially for new traders. Seasoned traders can set themselves targets but they have to be for the right reasons. You have to take what the market gives you and you simply cannot put a target on that. I know a trader who is notoriously lazy. He trades and earns what he needs and then spends the rest of his time dossing about. That's not the kind of guy he wants to be so he sets himself realistic targets to stop the laziness.

While I have never set myself daily targets. I did experience a loss because of a "mini target". It was a while ago and I was looking at closing out my first £10 trade. Small I know but at the time it was a new milestone. I put my exiting position where I wanted it to be watched as the price came down to it. The steam "ran out of steam" and was 1 tick away from my exiting position but showing signs of a possible reversal. Everything was telling me to exit the trade but I hung on to it. Shortly after, it drifted like a barge and put me back at a scratch. If I had taken a smaller green then I'd be almost £10 up right now.

Last week, I was looking at making my first £100 trade. A huge milestone for me. As the price came down to meet my closing position of £101 I watched in awe only to be met with the very familiar feeling of my last trade. I instantly closed out at £97 profit without any hesitation. Soon after I removed my "Round numbers are not your friend" post-it note from my monitor.

The point I'm trying to make it everyone is going to make roughly the same mistakes over the course of their trading "journey". What separates the good from the bad traders (to a degree) is the ability to recognise these mistakes and act upon them, usually by never letting them happen again. You have to put your pride in your ability to trade effectively above any financial win/loss as your ability to trade effectively is what is going to earn you money in the long run. That £101 green wouldn't have made me a better trader but hanging on for it most definitely would have made me a poorer one, both financially and otherwise.

As usual. I appear to have gone on a bit of a ramble