How important is "mentality" in sports trading?

[ruthlessimon]

That's all very well ruthlessimon..and holding too long is a fault of mine and so i will have more winning trades than losing..but a biggish loss will wipe out the profit. BUT often a reversal will take place and you can get out for a scratch or minor loss. My problem is knowing when it is going to reverse and when it's just going to keep going? Any ideas? Thanks.

i'd recommend testing the strategy against a random strategy. if the results are similar, your method is most likely edgeless. the only way to know for sure:

1. a lot of number crunching
2. a good work ethic
3. a good mentor

quick analogy:

when messi scores a freekick, spectators stand in awe, but he practised that freekick for hours prior in the cold.

when webb nails a reversal, traders on here stand in awe, but he practised that trade for hours prior in the data.

[SeaHorseRacing]

That's all very well ruthlessimon..and holding too long is a fault of mine and so i will have more winning trades than losing..but a biggish loss will wipe out the profit. BUT often a reversal will take place and you can get out for a scratch or minor loss. My problem is knowing when it is going to reverse and when it's just going to keep going? Any ideas? Thanks.

Patience. When you thnk its going to reverse it usually does reverse but not right away.

[ShaunWhite]

OK Shaun nice challenge for the start of the week,
from google
:
Showing results for testament
Search instead for testiment

Showing results for Mozart
Search instead for Motzart

2 things, these are trick questions, and how the heck do you get the answers to display?

Happy Monday Morning.
PS you didn't post rules, like - no googling!
K

I didn't say it was a spelling test .....I nearly put 'no googling' but thought that was obvious or it doesn't prove much. If you can't read the answers ... 39 years, 4,187 miles, 13 countries, 39 books, 2,160 miles, 390,000 lbs, 1756, 645 days, 5,959 miles, 36,198 ft.

How did you do? ...10/10 for spelling obv

[kerberus]

SW, I didn't get any. Thats's why I googled. I wasn't doin' a spellcheck, you were "outed" by google.

PS. T_T good idea for a thread

[Trader_Tom]

Whether your expecting any advice from me I think I can share some advice simply because I traded over 9,000 markets in 2016 and I spent 75% of them aware and working on my mentality.

Your question is 100% the difference between a long term successful trader.
Before I started trading I thought I knew alot about myself when in fact I didn't.
As your aware my from trading diary people kept banging on about managing risk and turning to automation.

I am a young and I would say at least average In intelligence guy, with no serious emotional or physically problem.

I struggled with blowing banks now and again but I do know with 100% certainly now that I am incredibly undisciplined, incredibly narrow minded, over thinking and have serious with in deep pain.
This may sound a little deep... but what I am trying to get at is most people who never make it probably don't know their weaknesses. I would say removing them is even harder.

knowing the answer to your question is your edge and its your key to profit.
Everybody's answer is different and the traders that make it discover the questions the need to ask and then answer them by making the changes needed.

If anyone asked me what trading successfully is?
To be able to implement a proven statistical edge being utilised by someone who has mastered themself.

So although you say your disciplined etc... are you missing out something that is not market analysis related?
I'd there something mentally your not aware of yet that's holding you back?
Time will tell...

Great question and the best topic I've seen on the forum for some time. Cheers

My mentality has been solid to the extent that the market has tested it. Like you said though, only time will tell! The one thing I always try to be though is honest with myself. If I do something daft and recognise it I don't tend to do it again. A good example of this was when I had a dabble at a back to lay trade after getting a tip from a successful in play trader. It was out of stalls so I didn't have the usual problem of looking for horses lining up at the start etc. After the break the horse was travelling well and it's price had come in a touch. It was a front runner that was down in class so naturally it pulled further to the front. While it wasn't miles in front it was leading by about a length and I felt quite confident in the trade. I was watching on ATR and while caught up in it all forgot about the huge delay. I'm watching the horse trade at 1.04 and still looking in the lead by over half a length with barely any distance to cover. As you'd probably guessed, it went to the judges but looking at the prices. my horse traded much much higher than the horse that "was" in 2nd place. It lost by a nats leaving me £50 quid in the red. My single biggest loss since I started.

Typically mistakes pan out over a longer period of time but before I knew what had happened it had already taken place. One thing I did know straight after though was that I had just gambled. This took me by surprise as I'm not a gambling person. Hell I've never even played the lottery! For the first time in my life I had gotten caught up in the excitement of the actual race when any person who had a level head would have just traded out at 1.04 and took slightly less green. Like I said though, it had happened so fast I didn't really have a chance to tell myself what I was doing was wrong haha. Either way, that mistake has been made and it won't be happening again.

A good example would be how I felt after getting an absolutely massive win after making a large trading mistake. I was staring at a very large hedged up green that had originated from a £20 stake. Afterwards, all I could think was how I was disappointed in myself that it happened and how it could have easily gone the other way and blown my bank (which was only £100 but still). At least it paid for my new computer haha.

You being honest about you failings is a big step in the right direction. I think it's possible for people to change the way they think but they cannot do this if they are in denial. I have problems and I make mistakes but the difference is that I ACT on them. It's easier to fix now than later after much repetition.

I'm missing a lot of the jigsaw puzzle but for the time I've been in the markets I'm extremely satisfied with my progress so far. I feel like I'm only just scratching the surface.

[Trader_Tom]

I'm reading 'Behavioral Investing : How Not To Be Your Own Worst Enemy' (by James Montier) atm... and I can recommend it wholeheartedly.

It's basically about supressing your inner McCoy and developing your inner Spock but it's a nice easy read, packed with info and written with a sense of humour.
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I'll add it to the list =D

[Trader_Tom]

Excellent question Tom, I think as someone else said the two things go hand in hand. I have read that people say, learning to read the market is easy, but acting correctly upon that read is the difficult bit.

I personally do not find it easy to read the market, I am hoping as I spend more time in front of the trading screen I will improve. Having made quite a lot of money from on line poker back in the day, I am hoping the psychological lessons learned will help me become a profitable sports trader. So perhaps I have less work to do on that side of things than other newbies to sports trading, but I am not certain about this.

The thing is though, I could have a fantastic "mentality" for sports trading (not chasing losses, not going in play, not frightened to take a loss etc.), but if I cant read a market with some kind of proficiency, then none of that is going to do me much good.

I think if you do learn to read markets well, and importantly have confidence in your ability to do this, then you can work on the other things as necessary.

I am like you at the start of a very long journey, its not going to be easy, and if you look at the rewards that are available to the tiny proportion of people who succeed, then it shouldn't be easy.

This might sound rather strange but I quite like the challenge of it, if I become successful then the extra money would be nice, but equally and probably more importantly it will give me a really good sense of achievement that I have accomplished something that is extremely difficult to achieve (my Mt. Everest if you like).

If I don't succeed then all it has cost me is some time (I only trade minimum stakes) so the financial loss will be negligible, and I will just be part of the 95% plus who try this and fail.

The more difficult it seems the happier I am with it. It sounds strange but it's like you said. The more I work at it the more likely I am to be profitable as most people would have given up by now. As unfair as it is though, you can't rely on just hard work to be successful.

The way I look at it. Right now, I really enjoy it. My time in front of the screen is pretty mechanical to be honest but I'm always looking back at trades and seeing what happened and what I missed. There aren't many things you can do where you enjoy it and it makes you money. Also, talking to Peter he say's he still really enjoys it too which is great to see. I'm sure it's not the same for everyone though.

[ShaunWhite]

SW, I didn't get any. Thats's why I googled. I wasn't doin' a spellcheck, you were "outed" by google.

PS. T_T good idea for a thread

So you got zero ? That's on the extreme side of being over confident! The next time you think you're 90% confident about something I'd stop and rethink

It's an interesting test really because you only have to give a range, there's nothing to stop you saying 0 - 1,000,000 and getting them all right, except for the condition that you have to be 90% confident. I got 5 and swmbo (who's probably a bit less confident than I am) got 7, but she knew one of them and I guessed at them all.

[Trader_Tom]

It's critical. Psychology is far more important than being able to read graphs

The reason for failure in trading is usually due to people succumbing to their own weaknesses. Don't forget, your cat would have a 50% chance of getting trades right, just by walking across your keyboard

Some traders just can't help themselves from making the same mistakes when things go wrong - they let trades go 'In Play', they overstake on the next trade, or they start gambling to win back their losses

I don't know how many times I have said this on this forum, but just in case you're a newbie , I'll say it again - "The difference between a successful trader and a bankrupt one, is what they do when they are faced with a red screen"

It is so true, because the mental obstacles traders face (especially inexperienced ones) is overcoming rushes of blood, frustration and anger when a trade goes wrong.

You need to rewire the brain for this game, and it's why I think gamblers have the biggest problem. I had a minor gambling problem when I was a young guy, so I'm speaking from experience here.

As a punter, you can accept losses, but you at least expect to get a run for your money. This is why over 2.5 goals bets are so popular, because even if the match remains 0-0 after 60mins, you are still in with an outside chance if a goals is scored within the next 10mins. However, when a punter gravitates towards trading, that philosophy of expecting a run for your money is a majorly difficult mental hurdle to overcome. Locking yourself out for a guaranteed loss before the match has even started takes willpower and invariably some eye watering losses

The reason why I'm still here trading, is not because I can read markets better than newbies, it's because I identified all my mistakes, and all my personal flaws which led to those mistakes, and I found ways to overcome them. Eventually, they start disappearing into the distant past

If you don't have the right 'mentality' for this game, you will be toast

I think with the football markets, there is so much time to contradict your own opinion and to mull things over. I prefer the faster paced racing markets simply because you have to think in the moment. This stops me over analysing whether to open or close a position. I think a slower moving market like football must leave some peoples nerves shot!

It's funny you should mention the cat. I had my dog jump up and hit my space bar with his nose (this is my hedge up button) and the moment he did it the trend reversed. He exited my trade for me at the perfect moment leaving me with a nice green. I think I might give him a shot and see how he gets on

It's strange when you say about being faced with a red screen. I 100% understand where you're coming from but when I see it I tend to think in terms of the percentage of my bank. It's not so much that I attribute value to the numbers and it's more like a game. I think this has benefited me substantially but also I can see it's dangers also.

Speaking of toast also...I'm hungry...

[Trader_Tom]

A lack of confidence in trading is very rarely a winning formula long-term. I've never been able to read Horse Racing markets, however there are exceptions to this. The markets I succeed in are the major races during the early morning activity - the prices don't jump so quick, the movements are easier to identify and there's decent liquidity to not leave you exposed when things change. I also do well when there is a heavy odds on favourite, where the price rarely jumps 4 or 5 ticks in the blink of an eye

The major reason for this lack of confidence is that I hate Horse Racing, I have no interest in it at all. If this job was all about Horses, I would have left years ago through sheer boredom as much as anything else.

However, I love all other sports. I think this is a key ingredient - I have a good idea of where the prices are going to go, purely through knowledge and experience, whereas with Horses I haven't got a bloody clue, as I know jack shit about it

I've mentioned to struggling traders on here before - identify the sports you like most, the markets you have most confidence and knowledge in and go from there

Football bores the shit out of me which is why I haven't touched it. I think it's a great sport at it's core but to my mind a sport has to be played by sportsmen and I tend to just see a lot of people pretending they are hurt. That might just be a sweeping generalisation though as like I said, not a fan of it haha.

[Trader_Tom]

Mentality in this game is so big. Its massive. Bigger than massive

For example the feeling when a £20 loss would alomst ruin the day and getting to that stage where the same loss doesnt even make you flinch and you just move on to the next race knowing its part of the game and you will get it right more times than getting it wrong is amazing

I never stop working on mentality. There is so much to learn and improve on

For those that may be struggling with this just keep plugging away. There is probably no quick fix. Working hard on mentality bit by bit and putting in the hours sat in front of the markets, putting it into practice and things will improve in this area

I think this can only come with time. When you can look back at your results and see that there is very little change luck had anything to do with them then that boost in confidence will allow you to work on your mentality knowing your edge is solid.

One thing I recently knocked on the head was when I had changed my mind or I was wrong about a decision, I would hold out for a scratch even when I knew it might not happen. I found that by concentrating on this I was ignoring the big picture and missing out on other opportunities. I now just take a tick or two loss and forget that trade and move on to the next one. More often than not I soon make that back. My losing races tend to be where I've made a string of "wrong" decisions even when everything was telling me it was going to pan out a certain way or if I only saw one opportunity and it was wrong. I keep meaning to keep a note of how many of my trades are successful/unsuccessful within each race rather than looking at it on a race by race analysis.

[kerberus]

Stick 11 Jump Jockeys in a ring with 11 football "Stars" (or Actooors as they seem to b
be aiming for the Oscars)- I'll back the Jockeys.

[Trader_Tom]

the biggest killer of trading banks: laziness!

but imo, psychology is heavily over emphasised (the majority of times) & is too often used as a 'get out of jail card' for poor trading/edgeless trading/lazy analysis.

example: "i get out of trades too late"

if you know categorically that cutting (over a large sample size) is better than holding, it's not a psychological problem - it's an IQ problem!!

Solid post. You need both sides of the coin to operate efficiently. That being said. I would rather put my money in the hands of someone who was mentally solid and had a very slight edge in the market than someone who has great market analysis but is reckless with their execution. Like with most things in life, balance is needed.

[ShaunWhite]

Having made quite a lot of money from on line poker back in the day, I am hoping the psychological lessons learned will help me

I use to play a lot of poker too Bluesky and a lot of the skills are transferable....but the biggest difference I found, is finding time to think in fast moving situations. It's as though someone is changing the flop every 1/5 second and every now and then your hole cards change too If you're used to playing fast though, you'll already be used to the idea of having moves planned depending on what happens next. It's more like speed poker than a relaxed deep stack MTT, unfortunately.

[ruthlessimon]

I would rather put my money in the hands of someone who was mentally solid and had a very slight edge in the market than someone who has great market analysis but is reckless with their execution. Like with most things in life, balance is needed.

recommend watching this vid: https://www.youtube.com/watch?v=j1X2hPcLga4

kahneman - "if the reckless guy succeeds he will be seen as having 'flair' & a 'genius', even if the risk was unacceptable."

so true!