How to exit a trade (betangel video)

[LucyLoo]

I have just seen Peter’s great trading video about losses, for those who haven’t seen it (https://youtu.be/QvFTWD8I92g)

However, I don’t quite understand a couple of the points made in that video. I was hoping someone might be able to clear these up for me, it would be very welcomed

“Don’t start chasing a position”. I was slightly confused by this, was Peter’s entry at 2.1 a chase? How do we define chase?

“The longer term trend is coming down, I’ve probably made a mistake”, “Historical volume carries little influence”. I’m a bit confused, could someone please explain what Peter means? 

Thanks for reading. Lucy

[Derek27]

Hi Lucy,

By not chasing a position, he means, if a price shoots up quickly, don't blindly lay it and assume it will continue upwards - it might snap back down.

The longer term trend is the Betfair graph which records the price over the long term.

Historical volume is the volume of money that's been placed on the selection for each individual price, which you will see on the ladder. He's basically saying that where money was being place an hour ago and recorded in the historical volume is less important than where the money is being place right now, or in the last few minutes.

Hope this helps,

Derek

Edit: I should just add, welcome to the forum new member.

[Iron]

“The longer term trend is coming down, I’ve probably made a mistake”, “Historical volume carries little influence”. I’m a bit confused, could someone please explain what Peter means? 

Hi Lucy

I have to admit this one got me scratching my head too!

I imagine it comes down to what he meant by 'longer term' and 'historical'. Maybe the historical volume he was talking about was volume from literally hours ago, whereas the longer term term trend was the trend over the past 10 minutes.

Hopefully Peter will clarify.

Jeff

Edit: I would also like to welcome the new forum member!

[ruthlessimon]

“Don’t start chasing a position”. I was slightly confused by this, was Peter’s entry at 2.1 a chase? How do we define chase?

I’d have thought Peter meant if the price is ‘well gone’ (i.e. when it was 2.20+, & far away from the safety of 2.0) & as Derek mentions, certainly is wise to be very careful after a large spike.

[Euler]

Volume matched hours ago has very little significance compare to activity in the last ten minutes. Money talks.

[Iron]

Define 'chase', 'well gone' and 'far away'.

The above might sound flippant, but it makes an important point - when using terms, it's important to define them in a manner such that two people could see the phenomenon on a chart or ladder and recognise it.

An analogy.

If I use the word 'chair', you will know what I'm referring to, even though chairs come in all shapes and sizes. If you see a chair, you'll know it's a chair. If I say that the price has wandered far away from another price on Betfair, that begs the question 'far relative to what?'. Is 3 ticks far? 5 ticks? Ten ticks? Or are we talking movement in percentage terms? It borders on being meaningless.

Jeff

“Don’t start chasing a position”. I was slightly confused by this, was Peter’s entry at 2.1 a chase? How do we define chase?

I’d have thought Peter meant if the price is ‘well gone’ (i.e. when it was 2.20+, & far away from the safety of 2.0) & as Derek mentions, certainly is wise to be very careful after a large spike.

[Iron]

So would you advocate disregarding everything that's happened in a market prior to the last ten minutes?

Jeff

Volume matched hours ago has very little significance compare to activity in the last ten minutes. Money talks.

[LucyLoo]

Thank you for all the kind words Derek & Jeff.

This will really help with my racing journal. Being a stay-at-home, I need something to do all day! Trading fills that gap nicely.

[ShaunWhite]

“Don’t start chasing a position”. I was slightly confused by this, was Peter’s entry at 2.1 a chase? How do we define chase?

I’d have thought Peter meant if the price is ‘well gone’ (i.e. when it was 2.20+, & far away from the safety of 2.0) & as Derek mentions, certainly is wise to be very careful after a large spike.

Lucy, in more genral terms, I define a chase as when you temporarily get blinkered to the overall market conditions and become focused purely on catching the tail of the tiger.

You see a break....the price surges and you want to get on, so you put higher and higher (or lower and lower) bids in rapidly, desperately hoping to get matched, without realising that the offers you are making are starting to lose track of the fundamentals. The market suddenly runs out of steam, and it turns round and bites you.

[Iron]

Hi Shaun

Surely jumping aboard a strong trend can be a profitable strategy, as Peter illustrates in this video: https://www.youtube.com/watch?v=_TKeoraX_YU -

So the question is: Under what circumstances is it wise to do so, and under what circumstances are you likely to get bit in the arse by the market for your troubles?

Jeff

You see a break....the price surges and you want to get on, so you put higher and higher (or lower and lower) bids in rapidly, desperately hoping to get matched, without realising that the offers you are making are starting to lose track of the fundamentals. The market suddenly runs out of steam, and it turns round and bites you.

[ruthlessimon]

Define 'chase', 'well gone' and 'far away'.

This is what makes it hard - & why I think Lucy couldn't quite see Peter's meaning. What people consider a chase is certainly personal, which is hard to replicate: (i.e. for a trader that trades lows, his stoploss would have been 1.92 - seeing peter entering @ 2.0 he would have seen as a "chase", but Peter's edge must have seen it differently, & a good exit was higher, i.e. 2.0)

[Derek27]

Define 'chase', 'well gone' and 'far away'.

I thought 'chase' meant running after something that's moving away from you, whether it's close or far away.

The important thing though, and Peter mentioned it in his psychology video, is to pause for a brief moment and give yourself time to think before a knee-jerk reaction to a change in the market. Easier said than done, but whenever I do it I find there may be a better trade elsewhere, even if it's in the next race.

[Iron]

It doesn't have to mean running after something that's running away from you. It could just mean running after something.

But isn't chasing part of trading?

The price is at 6. I put in a speculative order at 5, hoping it will drop. Is that chasing?

I laid at 3.0. The price is now at 2.0. Am I chasing the market if I close my trade for a loss? If it's risen to 4.0, am I chasing if I close for a profit?

The price has just broken upwards out of a range. Am I chasing if I place a lay?

The price has just reached an all time low, as happened in Peter's video that I posted a link to in this thread. Was Peter chasing by backing when that happened?

When a swing trader lays after the market has been steaming and shows signs of reversing, is that chasing?

And aren't we all chasing moves in the favour of our trend, all the time?

If something more specific is being referred to, it would be good to clarify that.

Jeff

Define 'chase', 'well gone' and 'far away'.

I thought 'chase' meant running after something that's moving away from you, whether it's close or far away.

[Derek27]

It doesn't have to mean running after something that's running away from you. It could just mean running after something.

I don't mean to be petty, but if it's not moving away from you, you're not chasing it - you're moving towards it.

I don't think chasing has a precise meaning, but I consider it as persisting with trading a selection where your previous trade as gone against you.

Placing a back and lay bet and moving one or both isn't chasing the market, that's just trading. Matching them both and placing them again nearer to where the market has moved may be considered chasing.

[ShaunWhite]

'Chasing the market' / 'Chasing your loses'... surely the same context of 'chase' and implies a breakdown of logical thinking?

Trying to catch a move isn't 'chasing' in the context of this topic, so long as the fundamentals of what you're trying to achieve remain intact.

ateotd, I think there are probably two types of chasing, rational chasing (chasing the bus to get on while it's still moving) and irrational chasing (chasing it all the way to the depot).