I think you have answered your own problem. You can clearly make profits but you seem unable to accept a loss and think you can get it back inplay.
Cut out the inplay stuff and I think you will see you soon become a hell of a lot more profitable.
It is clearly a discipline issue that you need to tackle and there is only one person who can do that you.
One way to avoid going inplay would be to set your orders to take SP. Then get up and walk away from the PC while the race is on or better still turn to the next market.
Going inplay is one of the main reasons people fail, sort out this area and you can then move onto improving your trading more.
To have lost £20 and £30 using £2 stakes is frankly crazy. I wouldn't expect many losses of that degree using a four figure bank.
The big step forward I made in my trading a long time ago was to learn to accept losses as part of trading and move on and not get mad with it. I remember from that day forward my trading immediately improved.
As I said there is only one person that can do that though, you!
light bulb moment in betfair trading career
I think it's very easy to make excuses when you're faced with the decision of whether to close for a loss that you're not happy about, or to risk it becoming even bigger. Therefore, maybe the solution is to think the situation through before you start trading.
Take, for example, a situation where you have a choice of losing 50 pounds for sure, or possibly losing 200 pounds by going in play. In the past, I've thought things like 'The odds move about a lot in play, so I'll be OK', or 'This horse has been steaming due to market hype. It's bound to drift in play when it emerges that it's not as good as everyone thinks it is'.
But in reality, you're betting 200 pounds to avoid losing 50 pounds. It's a bit like putting a 200 pound bet on a horse, in the hope of winning 50 pounds. I don't know about you guys, but before I placed that bet, I'd need to be pretty damn sure that I wasn't about to lose 200 quid! So I'd say that the best solution in that situation is to take the 50 quid loss on the chin, and grin and bear it!
Jeff
Take, for example, a situation where you have a choice of losing 50 pounds for sure, or possibly losing 200 pounds by going in play. In the past, I've thought things like 'The odds move about a lot in play, so I'll be OK', or 'This horse has been steaming due to market hype. It's bound to drift in play when it emerges that it's not as good as everyone thinks it is'.
But in reality, you're betting 200 pounds to avoid losing 50 pounds. It's a bit like putting a 200 pound bet on a horse, in the hope of winning 50 pounds. I don't know about you guys, but before I placed that bet, I'd need to be pretty damn sure that I wasn't about to lose 200 quid! So I'd say that the best solution in that situation is to take the 50 quid loss on the chin, and grin and bear it!
Jeff
andyfuller wrote:
The big step forward I made in my trading a long time ago was to learn to accept losses as part of trading and move on and not get mad with it. I remember from that day forward my trading immediately improved.
As I said there is only one person that can do that though, you!
Last edited by Iron on Wed Apr 14, 2010 11:41 am, edited 1 time in total.
Andy, I hoped you would join the thread. I remember reading your blog and it seemed you were at the same stage as lots of traders and were about to give up but you came out the otherside and seem to be doing really well now. Was it just accepting losses that did it?
I was going to post up a few things, but it seems a good discussion is well underway anyhow. I've offered both posters the opportunity to review their trading. Hopefully I can help pinpoint if there are any fundamental errors, or whether my view of the market is radically different for any reason.
When I first started trading I just assumed it was all random and traded as such. The next stage was to examine every cock up I made and try and not repeat it. The market is generally not wildly negative when trading at random, so I knew that by cutting out mistakes and trying to maximise good trades I should be able to tip it positive. That's how I started and progressed and that's how I suggest others approach the market as well. It wasn't long before I began to spot situations that tend to cause me losses.
When I first started trading I just assumed it was all random and traded as such. The next stage was to examine every cock up I made and try and not repeat it. The market is generally not wildly negative when trading at random, so I knew that by cutting out mistakes and trying to maximise good trades I should be able to tip it positive. That's how I started and progressed and that's how I suggest others approach the market as well. It wasn't long before I began to spot situations that tend to cause me losses.
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JollyGreen
- Posts: 2047
- Joined: Sat Mar 21, 2009 10:06 am
There have been some good replies already and the last one from Andy pretty much covered it.
I just wanted to add my 2 pennies worth in the hope it may also help.
The inability to take a loss is in all of us, quite simply it is a learned behaviour created throughout the history of man. Let's face it who wants to admit they are wrong? Everyone makes mistakes and most of them will never require us to hold our hand up and say "Oops, that was my mistake..sorry!" Of course we will do that if it helps someone else to feel better because there is a positive side to it; it's called ingratiation. If you remove the third party it becomes much harder to perform because a little voice inside your head says "nobody will know" or "you'll be alright". I call it the "gambling monster" and I am ready to admit it still gets a grip of me on the odd occasion. It's not so much the gambling these days but occasionally I push too hard and simply compound my loss. I never knowingly allow a trade to turn in play anymore - I still get caught by silly errors that I am responsible for.
You need a certain temperament to perform well at trading and most people either lack it or are unwilling to change. It all boils down to fear of failure IMHO. Everyone sees all these wonderful totals achieved by other traders and so a loss makes people feel bad. I make losses, sometimes large ones and I simply cringe when I look at my P&L. I actually find it helpful to talk about them with other traders and poke fun at myself. It removes that stigma and simply shows I am human.
Back to learned behaviour. As a child it is not normal for you to own up - not if you think keeping quiet will save your skin. That's normal behaviour but add in some evidence or testimony from A N Other who says "yep, it was definitely him/her" then suddenly we're in a different situation and we have to own up. This is quite cathartic for most people and they move on in life. Trading can be the same way but in order to move on and progress you have to rid yourself of the demons and for this to happen you have to experience something positive. Andy hit the nail on the head when he said he learned to accept losses. Basically the loss is a brick wall that stops you moving forward and once you accept the loss and move on you will improve. The next loss will be another wall to climb but once you move on it becomes normal. Then you check the P&L and realise the loss was not that significant after all. However if you don't get past that first wall of accepting losses then you cannot experience the positive feeling associated with the insignificance of the losses.
That first wall is the highest and the hardest to climb but if you conquer that one the rest of them get smaller and smaller.
I'm sorry if this sounds like mumbo jumbo or somehow derogatory, it is not meant to be. We are dealing with normal human behaviour and the sooner anyone can accept that the sooner they will progress.
I just wanted to add my 2 pennies worth in the hope it may also help.
The inability to take a loss is in all of us, quite simply it is a learned behaviour created throughout the history of man. Let's face it who wants to admit they are wrong? Everyone makes mistakes and most of them will never require us to hold our hand up and say "Oops, that was my mistake..sorry!" Of course we will do that if it helps someone else to feel better because there is a positive side to it; it's called ingratiation. If you remove the third party it becomes much harder to perform because a little voice inside your head says "nobody will know" or "you'll be alright". I call it the "gambling monster" and I am ready to admit it still gets a grip of me on the odd occasion. It's not so much the gambling these days but occasionally I push too hard and simply compound my loss. I never knowingly allow a trade to turn in play anymore - I still get caught by silly errors that I am responsible for.
You need a certain temperament to perform well at trading and most people either lack it or are unwilling to change. It all boils down to fear of failure IMHO. Everyone sees all these wonderful totals achieved by other traders and so a loss makes people feel bad. I make losses, sometimes large ones and I simply cringe when I look at my P&L. I actually find it helpful to talk about them with other traders and poke fun at myself. It removes that stigma and simply shows I am human.
Back to learned behaviour. As a child it is not normal for you to own up - not if you think keeping quiet will save your skin. That's normal behaviour but add in some evidence or testimony from A N Other who says "yep, it was definitely him/her" then suddenly we're in a different situation and we have to own up. This is quite cathartic for most people and they move on in life. Trading can be the same way but in order to move on and progress you have to rid yourself of the demons and for this to happen you have to experience something positive. Andy hit the nail on the head when he said he learned to accept losses. Basically the loss is a brick wall that stops you moving forward and once you accept the loss and move on you will improve. The next loss will be another wall to climb but once you move on it becomes normal. Then you check the P&L and realise the loss was not that significant after all. However if you don't get past that first wall of accepting losses then you cannot experience the positive feeling associated with the insignificance of the losses.
That first wall is the highest and the hardest to climb but if you conquer that one the rest of them get smaller and smaller.
I'm sorry if this sounds like mumbo jumbo or somehow derogatory, it is not meant to be. We are dealing with normal human behaviour and the sooner anyone can accept that the sooner they will progress.
Hi JollyGreen
I think another way of reducing the sting that comes with thinking you've screwed up is meditation. It reduces unhelpful emotional reactions, and helps you to avoid making self-sabotaging negative thoughts like: 'You idiot! Can't you do anything right? That was a schoolboy error!'.
Jeff
I think another way of reducing the sting that comes with thinking you've screwed up is meditation. It reduces unhelpful emotional reactions, and helps you to avoid making self-sabotaging negative thoughts like: 'You idiot! Can't you do anything right? That was a schoolboy error!'.
Jeff
JollyGreen wrote:
I make losses, sometimes large ones and I simply cringe when I look at my P&L. I actually find it helpful to talk about them with other traders and poke fun at myself. It removes that stigma and simply shows I am human.
Was googling and found this, not directly related but very interesting as it talks about dealing with losses.
http://www.emotionalcompetency.com/blame.htm
http://www.emotionalcompetency.com/blame.htm
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andyfuller
- Posts: 4619
- Joined: Wed Mar 25, 2009 12:23 pm
The time when I was close to giving up was during the winter of 08/09. I let a lot of things get to me during this period.Mug wrote:Andy, I hoped you would join the thread. I remember reading your blog and it seemed you were at the same stage as lots of traders and were about to give up but you came out the otherside and seem to be doing really well now. Was it just accepting losses that did it?
I used to get very mad when I had a loss, but those losses were never inplay losses as I never let trades go inplay from the very start of my trading as has been said above, I do not like betting at odds as in the above example of 1/4 on something I have no idea about. Give my the loss everytime as you can then come and fight another race.
I remember once very early in my trading when I lost £20 on the last race of the day when I was caught by a spike of what would have been a bookmaker. I was mad! £20 was what I had made in the day so I was fuming I had wasted a whole day. I banged the table, several times, let out a lot of expletives and was in a bad mood even the next day and it effected my trading the next day.
This would happen whenever virtually whenever I had a loss. I had no control of my emotions and thought the market was against me.
However, I took some time out and had a chat to myself. I realised that getting mad was clouding my judgement and I was compounding the issue with my bad mood effecting my next lot of trades. So I thought about what I could do. So to avoid the TILT mindset I would then get up and make a cup of tea or go to the toilet, put the rubbish out, just something to get me away from the computer which meant I couldn't trade the next race and I would calm down and clear my head. This progressed to the point where I could sit there and just watch the next market. Then it moved on eventually where I could just trade the next market and put the previous loss to the back of my mind.
I had learnt to control my emotion. I won't lie I still get mad from time to time but I can recognise that and I take action, i.e. I walk away for a race or two.
I also learnt to improve my trading ofcourse which meant I lost less and less but the key to allowing me to do that was learning to accept the loss and move on quickly. If I couldn't move on quickly I walked away and came back when I had.
Other things that I let get to me during that period were all the cancellations. I was looking at them as missed opportunities. This year I looked at them as time off to relax and enjoy myself. There is no point getting mad with yourself when there is nothing you can do about the situation.
IMO trading is more about you and your mindset than anything else at all. If you can learn to control yourself you are 90% of the way there.
Something else to bear in mind with these situations when people let trades go inplay is that they tend to fully realise the losses but don't fully realise the gains. I.e. they cut out for the scratch when it goes right but when it goes wrong they lose the lot so there is no evening out of the situation.
It is plain and simple, do not go inplay unless you have a good reason to, i.e. that was the plan all along. If you assessed the market wrongly in the first place why will you have suddenly got it right now? Get out, take the loss and re-evaluate.
This winter 09/10 I have broken each month my best ever month achieving totals I could only dream of previously. The main reason is not using a big bank (in fact I am currently using less than I was last year) but learning to control myself and the mind games involved in trading.
This is an interesting discussion. The psychology of trading is often taken for granted but it is very much the key to success. Most people believe that traders trade for financial reward only but there is also a strong urge to be proved right. This urge leads the novice trader to be believe that they can somehow outwit or control the market. This ultimately results in big losses because the market eventually wins. The more experienced trader learns that when the market is against them, then the best policy is generally to cut with a small loss.
I found this article on FX trading which explains the four stages to becoming a successful trader. Although it is written for the FX markets, the same principles apply to any form of trading. I wonder how many on here have reached stage 4.
http://news.forexdistrict.com/2009/colu ... itability/
I found this article on FX trading which explains the four stages to becoming a successful trader. Although it is written for the FX markets, the same principles apply to any form of trading. I wonder how many on here have reached stage 4.
http://news.forexdistrict.com/2009/colu ... itability/
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Crackerpot
- Posts: 8
- Joined: Thu Apr 16, 2009 11:04 am
Got to agree with everything that Andy has said in his post. I can feel every emotion he speaks about.
I posted a couple of weeks ago that "Betfair owed me nothing" and the day after that I made a dumb mistake. It cost me £150 red across the board. I knew I should have got out of the market and accepted a £10 loss, but I stayed in, they scored a goal and there you go a big fat loss.
I was as mad as you can imagine. The loss wasn't massive but it was a fundamental mistake, I took a risk everything would be ok and it wasn't. I banged the desk so hard with my hand (steady there ) that I nearly broke my hand.
How was I going to get that back..... well four days later I had that loss back and I'm now £240 up for the month.
These are not massive figures but it shows that:-
1) Find something that works for you. if you lose money on horses then try football, or tennis or some market where you can find an edge.
2) Stick to the principles and don't worry about individual losses. Small losses are much easier to get back than big ones!!!!
3) See the big picture, and take what the market gives you. A small profit is better than a big loss.
4) The markets can work for you. It took me the best part of 4 years to get my losses and software costs back. But I have done it, and trust me if I can any idiot can
Steve
I posted a couple of weeks ago that "Betfair owed me nothing" and the day after that I made a dumb mistake. It cost me £150 red across the board. I knew I should have got out of the market and accepted a £10 loss, but I stayed in, they scored a goal and there you go a big fat loss.
I was as mad as you can imagine. The loss wasn't massive but it was a fundamental mistake, I took a risk everything would be ok and it wasn't. I banged the desk so hard with my hand (steady there
) that I nearly broke my hand.How was I going to get that back..... well four days later I had that loss back and I'm now £240 up for the month.
These are not massive figures but it shows that:-
1) Find something that works for you. if you lose money on horses then try football, or tennis or some market where you can find an edge.
2) Stick to the principles and don't worry about individual losses. Small losses are much easier to get back than big ones!!!!
3) See the big picture, and take what the market gives you. A small profit is better than a big loss.
4) The markets can work for you. It took me the best part of 4 years to get my losses and software costs back. But I have done it, and trust me if I can any idiot can
Steve
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andyfuller
- Posts: 4619
- Joined: Wed Mar 25, 2009 12:23 pm
That is true but as peter has often stated the line between making money and not is very small. I believe it is the mindset etc that is what takes you over that line and into profit. It allows you to free up your mind and look for opportunities etc.hgodden wrote:I don't doubt in any way the importance of psychology in trading, but you do need to have a clear edge in the market with what you're doing, regardless of how good a minset you may have
One good way of learning to not go inplay is trade markets that don't let you go inplay for example Greyhounds or US Racing. That way you can't be tempted to go inplay and it should help remove that part of trading from your overall trading game plan.
Excellent replies - i am glad to have provoke such a response. I have questions:
Andy yes its me again- you said you should walk away from the screen pre race and not to watch in play - remember me? i am the one person who did this (i have discipline) only for a horse to withdraw at the off which could not be applied until the race was over - Betfair then stung me with a £30 post race reduction factor! Yuor advice then was to watch the races. Again i was only playing at £2 stake levels - this £30 on £2 stakes is crazy especially if there is nothing you can do about it - it knocked the wind out of my sails. And I know your response - its a rare event.
I hate going over this point because I want to be a successful trader and any advice you give is much appreciated. but people need to be aware that is a danger and can happen.
Andy yes its me again- you said you should walk away from the screen pre race and not to watch in play - remember me? i am the one person who did this (i have discipline) only for a horse to withdraw at the off which could not be applied until the race was over - Betfair then stung me with a £30 post race reduction factor! Yuor advice then was to watch the races. Again i was only playing at £2 stake levels - this £30 on £2 stakes is crazy especially if there is nothing you can do about it - it knocked the wind out of my sails. And I know your response - its a rare event.
I hate going over this point because I want to be a successful trader and any advice you give is much appreciated. but people need to be aware that is a danger and can happen.
Next question: everybody agrees (?) that winning at 1/5 odds is not going to be profitable (in fact 1/4 was quoted as not being any good).
So as scalpers do you scratch trades or take only a 1 tick loss per trade - as this must be the case if you are aiming for 1 tick?
So it is no good to set the stop loss on BetAngel to five ticks if you are aiming for 1 tick - the odds are against you. I have tried this and losses rapidly mounted - everytime I enter a trade i am always in a lossing position and so by definition it must be closed immediately.
How do you manage the stop loss? I often feel we small traders are plankton and there is often a big whale out there ready to gubble up 10 ticks or more in one mouthful. Again it feels to me it is down to luck if you happen to be in the wrong place at the wrong time and a big move gubbles you up and you just have to take the big loss as there is nothing you can do about it.
So as scalpers do you scratch trades or take only a 1 tick loss per trade - as this must be the case if you are aiming for 1 tick?
So it is no good to set the stop loss on BetAngel to five ticks if you are aiming for 1 tick - the odds are against you. I have tried this and losses rapidly mounted - everytime I enter a trade i am always in a lossing position and so by definition it must be closed immediately.
How do you manage the stop loss? I often feel we small traders are plankton and there is often a big whale out there ready to gubble up 10 ticks or more in one mouthful. Again it feels to me it is down to luck if you happen to be in the wrong place at the wrong time and a big move gubbles you up and you just have to take the big loss as there is nothing you can do about it.
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andyfuller
- Posts: 4619
- Joined: Wed Mar 25, 2009 12:23 pm
My response wouldn't be it is a rare event, it would be:ba1000 wrote:Andy yes its me again- you said you should walk away from the screen pre race and not to watch in play - remember me? i am the one person who did this (i have discipline) only for a horse to withdraw at the off which could not be applied until the race was over - Betfair then stung me with a £30 post race reduction factor! Yuor advice then was to watch the races. Again i was only playing at £2 stake levels - this £30 on £2 stakes is crazy especially if there is nothing you can do about it - it knocked the wind out of my sails. And I know your response - its a rare event.
I hate going over this point because I want to be a successful trader and any advice you give is much appreciated. but people need to be aware that is a danger and can happen.
What I was saying was walk away once you have closed out your positions, don't walk away before you have done that. You should be closing out before the off unless it is part of your stratergy to close out inplay but what I have been suggesting is close out pre race and then walk away.
Then if a Withdrawal happens you will not be affected as both your backs and lays will be reduced by the reduction factor.
What happened in the case you referred to was that you closed out inplay and therefore your closing order was not reduced by the reduction factor and led to your loss.
It is important to understand how the reduction factor effects your positions, if you are doing stuff inplay a RF will not be applied.