Training yourself and risk

[max_usted]

Hi all,

I've been trading with small stakes on football in-play - it's been ok/quite good. However I have a problem.

Basically when I make judgments on what to do while looking at games, I've noticed that my brain is not at all risk averse when time decay works in my favour (e.g. backing u2.5 goals), but far too risk averse where it does not (i.e. laying unders, etc).

I feel if I can overcome this hurdle somehow, then I will become more free - I don't chase losses - I've generally cut out revenge trades,, and I think I have good judgment. But I have this ridiculous tendency to back in favour of time delay, even when I come to the market with the intent of doing the opposite. For example, I traded a game yesterday - with 10 minutes left I thought there'd be another goal, and so was going to lay, but ended up *backing unders* (I told myself I'd scalp a few ticks to give myself a buffer before laying). There were in fact two goals in the last eight minutes, and I was caught out - was seriously, seriously pissed off with myself, i can tell you.

I've watched Peter talk about it gradually becoming less risk averse in his videos and it's just something I'm going to have to work on (hard), but does anyone have any techniques they tried to help themselves?

Thanks,

[Yasmingrace]

HI max_usted. I would think everyone is different. If I trade a football match I start to think about getting out after 60 min if it's going my way. If it isn't I will let it go to 70-80 min but will be thinking about getting out with some money. I know the result may change in the last 10 minutes but it also may not and the old addage of "live to fight another day" comes in for myself. It is better to lose a little than a lot. Personally, I would never enter a football trade after 80 minutes played as for me that is gambling on there being something happening. If you enter a trade earlier in the match you have plenty of time to think your strategy. I could say losing money make me risk averse but sometimes it is a gut feeling. If I try to enter a trade on horse racing on Bet Angel and the market goes against me a few times I just leave the race alone and think "Its not meant to be". There will be another race along soon after and you start again.

I'm no expert on trading and this is not a criticism of you but you said you were using small stakes yet you wanted to scalp a few ticks. Surely you are putting yourself under pressure. All profit is good no matter how small but sometimes just watching and doing nothing can be beneficial for what you learn from it.

[Daisy221]

Hello there! I am newbie here and fully satisfied to your opinions .

[Euler]

I've watched Peter talk about it gradually becoming less risk averse in his videos and it's just something I'm going to have to work on (hard), but does anyone have any techniques they tried to help themselves?

I learnt to take risk by figuring out that is where most of the money is. I experimented with many things to test the edge of the market and my own flawed reaction to it. By repeating experiments consistently over time you see things for what they really are so that gives you the strength to execute them ruthlessly.

[xitian]

Although I generally hate watching Deal or No Deal because so many contestants get caught up in their superstitions, it sometimes does throw up some genuinely difficult decisions.

For example, Peter, what would you do with the decision of two boxes left, winning either 1p or £250,000 - or dealing and taking a guaranteed £88,000?

Of course gambling with the 1p/£250k has positive expectation over the £88k, but is positive expectation worth less when it's a sample of 1? What if it were 1p/£250k and a £10k offer? Or a £124k offer? Would anyone gamble with a £150k offer?! At what point do you close a trade, and when do you gamble taking advantage of a higher expectation? Everyone would have a difference price they'd be willing to deal at, and although there seems like an easy logical answer to the question mathematically I'm not sure there's a definitive "right" answer since it probably depends on circumstances, character, etc...

What I've found is that in recent years I've become accustomed to taking larger risks for larger returns, but only because I know I have many attempts. Even then there are times when I decide I have to scale back the volatility of returns.

So back to the question! What would you do with a 1p/£250k and £88k offer?

[Euler]

You would get different answers from different people. As £88k wouldn't make any difference to me I would have to gamble with the expectation that the game is fair. But I would imagine most people would take the money al la prospect theory.

[LeTiss]

£88k wouldn't make any difference to me

Do have any idea how arrogant that makes you sound?

[Euler]

Maybe I should have used the word much. I think I was really trying to say I'd be up for gambling that!

[LeTiss]

I'm pulling your leg mate!

[Euler]

I know, but others may not.

Hoping Saints don't get the Theresa may of football management.

[max_usted]

I've watched Peter talk about it gradually becoming less risk averse in his videos and it's just something I'm going to have to work on (hard), but does anyone have any techniques they tried to help themselves?

I learnt to take risk by figuring out that is where most of the money is. I experimented with many things to test the edge of the market and my own flawed reaction to it. By repeating experiments consistently over time you see things for what they really are so that gives you the strength to execute them ruthlessly.

Ok thanks very much. So I can get there through building familiarity over time, and conditioning my mind/becoming truly familiar with (and expectant of) the risk in any situation.

I traded yesterday - I had about five times in a row when I was going to enter a position, but I froze/procrastinated. Very frustrating. But your response suggests it's possible to overcome.