Financials....eye opener?
If you look at index's, FX (currency pairs), and many others over very short timeframes, say 1 minute charts you can see movement that is somewhat like the pre market on horse racing. I would be very interested to know if those who trade horse racing would see that.
Hi
I think there are many transferable skills between financials and sports trading.
I had a dabble a couple of years ago and followed a very simple strategy. I opened a dummy account and traded FX pairs (GBP/CHF and GBP/USD). I didn't trade it every day (about 6?) and had a very good strike rate - see attached. (I had never done anything like this before). You will notice that my strike rate got better towards the end?
Why did I stop?
Well I already have a day job (work from home) and manage to squeeze sports trading in too, I just didn't have the band width to do all three!
Although it doesn't show in the P&L I actually lost it all in one trade )I just got complacent and as it was a dummy account I took risks that I would normally have taken).
The key point for me was that when betfair markets turn against you it is always manageable..and they dont drift too far. On the financials the swings are HUGE and too scary for me..
Nevertheless, with the approach and patience I think it could be achieved?
Have any other Betfair traders made the transition successfully??
Regards
Peter
I think there are many transferable skills between financials and sports trading.
I had a dabble a couple of years ago and followed a very simple strategy. I opened a dummy account and traded FX pairs (GBP/CHF and GBP/USD). I didn't trade it every day (about 6?) and had a very good strike rate - see attached. (I had never done anything like this before). You will notice that my strike rate got better towards the end?
Why did I stop?
Well I already have a day job (work from home) and manage to squeeze sports trading in too, I just didn't have the band width to do all three!
Although it doesn't show in the P&L I actually lost it all in one trade )I just got complacent and as it was a dummy account I took risks that I would normally have taken).
The key point for me was that when betfair markets turn against you it is always manageable..and they dont drift too far. On the financials the swings are HUGE and too scary for me..
Nevertheless, with the approach and patience I think it could be achieved?
Have any other Betfair traders made the transition successfully??
Regards
Peter
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Will Sharpe
- Posts: 68
- Joined: Thu Jul 14, 2011 9:02 am
I have traded US equities and options for a long period. I like to trade short to very short time frames. The discussion on time frames is interesting as I find that the one of the best things with racing is the fact the every day presents a pre-defined number of trading windows.
One of my biggest issues with financials is that if you trade for many years you will notice that there are long periods where the markets are fairly stable. If, like me, you are depending on volatility these periods become challenging. Of course there are always stocks that have large intraday moves but not all stocks are priced in a range you want to trade or have sufficient liquidity. During these low volatility periods I find that I take a large number of unwarranted trades and unprofitable trades.
Why do I do this? I think the answer is twofold.
A) It's boring to sit and wait for action, it's easy to jump in on trades that doesn't fit your trading plan. This is of course a sign of lack of disciplin.
B) When you get a signal that meet your entry criteria it is easy to plan the exit based on a higher volatility scenario but in this low vol period you can't expect the same move. So you will either miss out completely because the trade may turn on you before you get out or a winning trade pay's a lot less than before.
This is a bigger problem than you might think because it requires modification of your stop loss levels as well. Basically what it boils down to is that you need to be able to adapt to these natural swings in the market. Even though it is pretty easy to detect the change in the market it isn't that easy to change your style of trading.
For me part of the appeal with sports trading is the well defind time frames. I know I may be in a trade between 3 minutes before the off until the off. Then I can take a cup of coffe, make som calls,or what ever. If for some reason I' m not finished by the time of the next race it doesn't t really matter. I'll sit that one out.
When trading financials I might have to sit and wait for action to happen for hours or even day's. That's why I like racing, I actually find it less stressful in that way.
Potential wise financials certainly offers a bigger upside but also a bigger down side. Competition wise I would also argue that it is tougher in the financial markets, that is not to say that competition isn't tough in racing. It is.
One of my biggest issues with financials is that if you trade for many years you will notice that there are long periods where the markets are fairly stable. If, like me, you are depending on volatility these periods become challenging. Of course there are always stocks that have large intraday moves but not all stocks are priced in a range you want to trade or have sufficient liquidity. During these low volatility periods I find that I take a large number of unwarranted trades and unprofitable trades.
Why do I do this? I think the answer is twofold.
A) It's boring to sit and wait for action, it's easy to jump in on trades that doesn't fit your trading plan. This is of course a sign of lack of disciplin.
B) When you get a signal that meet your entry criteria it is easy to plan the exit based on a higher volatility scenario but in this low vol period you can't expect the same move. So you will either miss out completely because the trade may turn on you before you get out or a winning trade pay's a lot less than before.
This is a bigger problem than you might think because it requires modification of your stop loss levels as well. Basically what it boils down to is that you need to be able to adapt to these natural swings in the market. Even though it is pretty easy to detect the change in the market it isn't that easy to change your style of trading.
For me part of the appeal with sports trading is the well defind time frames. I know I may be in a trade between 3 minutes before the off until the off. Then I can take a cup of coffe, make som calls,or what ever. If for some reason I' m not finished by the time of the next race it doesn't t really matter. I'll sit that one out.
When trading financials I might have to sit and wait for action to happen for hours or even day's. That's why I like racing, I actually find it less stressful in that way.
Potential wise financials certainly offers a bigger upside but also a bigger down side. Competition wise I would also argue that it is tougher in the financial markets, that is not to say that competition isn't tough in racing. It is.
just keeping this topic turning over......trading this morning total charges 15 euros.
....disclaimer....this was still using a sim account and is just for a comparison insight although I doubt I could make that on a betfair sim.
....disclaimer....this was still using a sim account and is just for a comparison insight although I doubt I could make that on a betfair sim.
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The big limiting factor with sports markets is there scale. This is where I think Betfair got something quite wrong. If they would push the trading side of things a bit more and position them as a risk / spread betting market then the markets would effectively become a derivative of the underlying betting market and would probably start growing again. I traded for them at some financial shows in 2006 and there was huge interest, but Betfair never really followed up.
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superfrank
- Posts: 2762
- Joined: Fri Aug 14, 2009 8:28 pm
i assume you're trading the DAX looking at those prices.
very good effort.
i saved this link ages ago from an ex-bank trader who was trading crude for himself. the results at the bottom of the page show what is possible for those that know what they're doing!
http://www.informedtrades.com/197150-89-tick-chart.html
i've just started to look again at financials after a few months off.
very good effort.
i saved this link ages ago from an ex-bank trader who was trading crude for himself. the results at the bottom of the page show what is possible for those that know what they're doing!
http://www.informedtrades.com/197150-89-tick-chart.html
i've just started to look again at financials after a few months off.
you know how I like the dax 
Like a Kempton Park mid winter wednesday night market......lovely!!!
Market has been a bit strange recently. Had 2 weeks where volume was down to about a third and was impossible to trade. Since this week though its picked right back up and been like christmas! Now is a good time to get right back into it!
Like a Kempton Park mid winter wednesday night market......lovely!!!Market has been a bit strange recently. Had 2 weeks where volume was down to about a third and was impossible to trade. Since this week though its picked right back up and been like christmas! Now is a good time to get right back into it!