Sometimes less is more!

[JollyGreen]

This week saw me visiting Euler for a catch up. We like to discuss trading, training, future plans over a curry and a beer. Sadly my health has meant the beer is kept to a minimum as I am dizzy enough without it!

My forte is UK horse race trading and the form of horse racing. Euler knows every bit of data for the markets upside down and inside out so we form a good team. He showed me some amazing data which he didn't quite understand as it was related to horse racing. That is not a suggestion that I am better than him, I see things different to him and my knowledge of racing helps. I suggested something about the data and sure enough it made sense. Euler ran the data again and filtered it using my observation and bingo it made sense! There was a big anomaly with one of the courses but I have no doubt he will get to the bottom of that. I could not have compiled that data without Euler but I could "see" what it was offering in terms of profit and loss.

Our belief is that two sets of eyes are better than one and this proved to be the case. I don't really use data as such, I am blessed or sometimes cursed with a brain that can "see" what is happening but would not have the first clue on how to compile the data. So I am fortunate to have Euler as my team mate!

So why is less more?

I believe in Occams's Razor and Euler is the same. We tend to make a judgement and work with it. Should there be an issue we can investigate but there is no point worrying about "what if" especially if it doesn't happen!

It made me think that sometimes new traders tend to react too quickly to a market when it appears to be moving against them. I am NOT saying ignore it and let a loss build but perhaps try reducing the refresh rate to 1 second and try and relax more. It is highly unlikely the market will run away and kill you if you use a 1s refresh but it may just prevent you from reacting too hastily to a position. Why not try it with small stakes or practice mode to see if it helps you to relax a bit more and prevents unnecessary reaction to a move.

Let me know how you get on should you decide to try it.

[JayBee]

I believe in Occams's Razor and Euler is the same. We tend to make a judgement and work with it. Should there be an issue we can investigate but there is no point worrying about "what if" especially if it doesn't happen!

It made me think that sometimes new traders tend to react too quickly to a market when it appears to be moving against them. I am NOT saying ignore it and let a loss build but perhaps try reducing the refresh rate to 1 second and try and relax more. It is highly unlikely the market will run away and kill you if you use a 1s refresh but it may just prevent you from reacting too hastily to a position. Why not try it with small stakes or practice mode to see if it helps you to relax a bit more and prevents unnecessary reaction to a move.

Let me know how you get on should you decide to try it.

In agreement 100%. Simple rules are more generalised, fire more often and are easier to evaluate when things go wrong.

I have always used a 1 sec refresh rate, even for bots. In itself the refresh rate is a form of moving average and smooths out the chaos of a dynamic market.

[Zenyatta]

It made me think that sometimes new traders tend to react too quickly to a market when it appears to be moving against them.

Understatement of the century. I've lost thousands stopping-out too quickly, in fact, I often did worse than chance using stop-loss. It makes no sense to have a fixed rule, because every market and situation is different.

The stop-loss is a complex instrument, with which, I believe, newbies are shooting their own feet off. It does amount to trend-following (price chasing), and, just with any sort of trend following, unless people know exactly what indicators to look for, people will actually do worse than chance.

[redtra]

It made me think that sometimes new traders tend to react too quickly to a market when it appears to be moving against them.

Understatement of the century. I've lost thousands stopping-out too quickly, in fact, I often did worse than chance using stop-loss. It makes no sense to have a fixed rule, because every market and situation is different.

The stop-loss is a complex instrument, with which, I believe, newbies are shooting their own feet off. It does amount to trend-following (price chasing), and, just with any sort of trend following, unless people know exactly what indicators to look for, people will actually do worse than chance.

I don't use the auto stop loss, I find it easier to have in my mind the price at which it's time to take a loss. This is because ive noticed, as you say Zenyatta, each market is different and some jump around a lot whereas others are more steady. Keeping stakes small is also very useful for understanding the worth of money...if the stake is too big, as ive discovered, it becomes a number.

[nizzy99]

I also dont use stop loss as I have in my head what im willing to accept as a loss I stick to it, but then im playing with £10 just now so that i can understand the markets more and learn how to use Bet Angel until such time i will continue with my small stakes.

[Zenyatta]

The principle of 'Keep It Simple Stupid' is also why I much prefer long-term swing trades/punts, where I am simply holding until the off and taking SP.

The introduction of stop-loss (whether auto or manual) adds complexity, and, in general, extra complexity is always going to make things harder.

[redtra]

where I am simply holding until the off and taking SP.

Do you think it's better to take the sp rather than whatever price is available before the off?

[Zenyatta]

where I am simply holding until the off and taking SP.

Do you think it's better to take the sp rather than whatever price is available before the off?

Not unless you're a form student and you know how the horse runs In-Play. The SP price is actually the price you get after a few seconds In-Play. I can do that because I know horse racing. Normal traders shouldn't take SP though.