Endless education - upping the stakes.

[tweebie1999]

I live in Ukraine which is a fairly cheap country to live in, so making a few quid a day from trading has been enough to provide a local living. My trading strategy is to scalp the stable handicaps with £50 stakes getting out before the crazy last two minutes.

Yesterday however I upped the stakes to £200 and £500 and the odd £1000. I would like to think this was in the name of experimentation. If I am honest it was greed.

I lost £250 on the day. My reasoning deserted me and I found myself chasing losses. Something I wasn't prone to do with smaller stakes. I know a lot of people have lost much bigger figures but it was stil an expensive day's education.

I started off great (thinking wow this is easy) but after 3 races I chose a race that was a bit too volatile and off went the price. If that happens with £50 stakes it,s usually quite easy to scratch or get out for a small loss. Not with £200 or £500. You try to get out but the stake size just seems to force the price still further away.

TBH it has shaken my confidence somewhat. Maybe my reasoning that you need larger stakes to make more isn't correct. Maybe just more turns through the market would be better, however it seems to be getting increasingly difficult to get more turns through the market in an accurate manner. Or a change of strategy looking for swings instead.

I can of course stick to my £50 startegy and keep on taking a local wage but I had more ambitions for my trading.

Advice , ideas , experiences very welcome.

[LeTiss]

Join a long queue of people who have suffered the same fate, tweebie

It's this very reason (going off point slightly) why I advise people to get away from the practice mode ASAP, because when there's real money on the table you react different

The balance between risk and reward is not always easy to get right. I've been there many times when trying to squeeze more money out of markets

[tweebie1999]

Thanks Le Tiss. Your're correct. Having large stakes in the market makes you act completely differently. This game really is 90% psychological.

[Archangel]

I have seen traders who can trade with small stakes very effectively, but hopelessly when the stakes go up. Now, logic would dictate that it should be the exact same process (unless at larger stakes running into issues of getting matched) but really, its the same market. If i can be profitable trading £10 stakes, why cant I be profitable trading £100 stakes
I think you are correct in saying its really a mindset issue. I honestly believe that traders who successfully trade large stakes (500-1000) + are able to trade them as effectively as they were with £10...... the fear factor doesnt affect them as much !

[oscar123]

The main problem with using larger stakes is that if you are going to be wrong, you will be matched, in full , every time.

A lot of the time, when you are right about a trade, you will only be part matched, or not matched at all. As in order to be right, there will be other people backing or laying the same selection, pushing the market in the direction you want it to go.

The second problem with using large stakes it that when you are wrong, the market will move very quickly against you, and trying to get out will just push the market against you even further, making your loss even bigger. With smaller stakes it is far easier to get out with a small loss when you are wrong without doing any further damage.

Obviously bigger wins come with bigger stakes, though trying to push big stakes through every market is a surefire loser. Over staking is probably a traders biggest mistake. You have to be selective using big stakes, and only do it when the conditions are right.

This is why playing around with £2 stakes can be misleading. With these stakes you can get in and out of the market as you please, though once you raise these to even 3 figure stakes then you will start to have an effect on the market.

[Dallas]

I saw a Bet angel video several months ago where PW said he peroidcally goes back to £10 stakes to see how the market behaves, im no PW or use stakes anywhere near his normally but though i would challange myself to start with a £30 and see if i could reach £300 just from UK pre race markets within 3 mths and hopefully along the way pick up some information i was not seeing during my regular trading and which would help when i returned back to my normal trading.

I have attached a graph showing my weekly progress and what i can say from doing it was at the start i was fully of energy and commitment then hit a lull mid point where my winnings and losses felt meaning less and as a result i was trading for the sake of it and very inefficiently (i was also trying a couple of new things during this time). Then once i snapped out of this and started to concentrate again my bank started to go at a steady 15-20% per week. I hit my £300 mid july (about 4 weeks behind schedual) and decided to carry on till the end of July or till i now reached £500, which thanks to a spectacular day on 27th July i did so. As you can see from the graph my bank is now at the point i can enter a trade using my normal size stake (still did nt have the additonal amount to be able to add to each trade when it moves in right direction) but you can see a clear and steady growth on the bank from here onwards.

I think the point is You have to find the level of stake that suits you best, using to small makes the wins pointless and the loses irrelevent, using to big will result in cutting out profits to quicky and exiting losses too early - find your personal happy medium where the wins make a difference and any losses hurt just enough to keep you on your toes.

[megarain]

In the first paragraph, u mentioned you were attempting to scalp 'stable handicaps'.

On the surface, this seems a sensible option, as prices should be relatively less volatile, than maybe a maiden contest - but, was just wondering how u arrived at this - by data analysis, or just some horror losses on other types.

I find my trading size, will only increase, as I have more advantages. If I go live racing, and can look at more things (horses/going/betting), I feel more confident, and will be happier having more at risk. If u are just increasing stakes, as u are having a good run, this isnt really that sustainable .. each mkt has an optimum size, u can trade in and out of.

£500 trades, seems too big (unless its a festival meeting). Maybe u could set yourself a goal, to get to a certain bank, and then up trading size, by improving your work conditions(somehow).

I dont mind people 'taking shots' at moving up, indeed, I would encourage it, but, it needs to be a defined strategy.

[poklius]

You should use stakes you are comfortable with. going up from 50 to 500-1k, just sounds disaster. Try increasing your stakes gradually, like +10% every week. Personally I still use same stakes I used 3-5years ago, Im just clicking a lot more if I see good spot to enter Also your strike rate is going to fall if you use big stakes, you will be fully matched every time you are wrong, but not always or partially when you are right, so you'll also need to improve your trading. Take it slow and smart!