Switching trading mindsets - any tips?

[Kai]

Many aspiring traders would be more than happy to be successful on just one sport, desperate even. Mindset shouldn't be an issue with enough practice, since different sports require vastly different strategies and you don't trade outside of your trading plans.

Usually people try a bit of everything with a wide approach to see what sticks but most of the time only end up scratching the surface everywhere, have to dig much deeper than that in order to get to that specialist knowledge that everyone wants. I've met dozens that used this approach and those that didn't give up are for the most part still hopping from one sport to the other, never sticking long enough to find and develop a strong enough edge.

That being said, if you can make it work then you can only benefit in the long run, as you'll end up having a multi-dimensional understanding of the markets.

[indigokid]

Many aspiring traders would be more than happy to be successful on just one sport, desperate even. Mindset shouldn't be an issue with enough practice, since different sports require vastly different strategies and you don't trade outside of your trading plans.

Usually people try a bit of everything with a wide approach to see what sticks but most of the time only end up scratching the surface everywhere, have to dig much deeper than that in order to get to that specialist knowledge that everyone wants. I've met dozens that used this approach and those that didn't give up are for the most part still hopping from one sport to the other, never sticking long enough to find and develop a strong enough edge.

That being said, if you can make it work then you can only benefit in the long run, as you'll end up having a multi-dimensional understanding of the markets.

Hi Kai,

Again, I'm in total agreement. I originally managed to get a tennis strategy working then the season ended, so looked for something else, managed to get a football strategy working then found that one was becoming a struggle as I just couldn't work it around childcare (and based on my P&Ls) lost or broke even whenever I had the kids - usually because I couldn't manage them and it.

I sat down in Jan, did an audit on my life and found that one of the things that made me money last year was the football (without kids) and the tennis. So, the tennis season has now started so I refined the strategy, it's now semi-automated, and I'm going to scale up incrementally with pot growth.

The football I can do every other week when I don't have kids, again, I'll let that grow naturally.

The horse racing has come about simply because I have my weekdays free both weeks and it's another way to learn about the markets and myself.

The biggest factors for me are basic money-management , being absolutely ruthless with myself when it comes to cashing out/not chasing losses/wins.

Trading plans are key. Absolutely bang on. And like you say a multi-dimensional understanding of the markets may be quite useful. Managing swings and losses in horses has taught me a huge amount that can be applied to both football and tennis already as well as mindset.

Tbh, I'm thoroughly enjoying it. I may have a couple of normal job offers (contracts) in the pipeline, but there's a bit of me that just wants to keep plugging away at this and see what I could grow it into.

Thanks again all for your insight.

[Kai]

I sat down in Jan, did an audit on my life and found that one of the things that made me money last year was the football (without kids) and the tennis. So, the tennis season has now started so I refined the strategy, it's now semi-automated, and I'm going to scale up incrementally with pot growth.

The football I can do every other week when I don't have kids, again, I'll let that grow naturally.

The horse racing has come about simply because I have my weekdays free both weeks and it's another way to learn about the markets and myself.

The biggest factors for me are basic money-management , being absolutely ruthless with myself when it comes to cashing out/not chasing losses/wins.

Something to keep in mind is that you don't always need live markets to keep improving, sometimes your time could maybe be spent more efficiently by analyzing your past trades instead of trading everything you can get your hands on.

For example, I have the habit of recording a good chunk of my trading and usually just end up deleting it right away, but if something interesting happens or I mess up for some reason or I want to review a crucial point in time then I have a recording ready that enables me to do just that. To take a closer detailed objective look at both the market and my trading without the tunnelvision, because while you trade you're mostly focused on your own trade but there are probably many things going on that are easy to miss, not to mention your own mistakes and so on, the subtle things are amongst the most valuable in my opinion and they are very hard to spot, even to a well trained eye in a fast enough market.

In short I'm just saying that I always preferred having the quality in my trading, instead of the quantity. The reason is very simple, the quantity is always there if I want to go for it, but I usually only want it once I have the proper quality behind it. And if you have enough quality in your trading then you don't even really need quantity, if that even makes sense, I think that's the ideal scenario.

In any case best of luck with your trading, it sounds very good so far.

[indigokid]

Something to keep in mind is that you don't always need live markets to keep improving, sometimes your time could maybe be spent more efficiently by analyzing your past trades instead of trading everything you can get your hands on.

For example, I have the habit of recording a good chunk of my trading and usually just end up deleting it right away, but if something interesting happens or I mess up for some reason or I want to review a crucial point in time then I have a recording ready that enables me to do just that. To take a closer detailed objective look at both the market and my trading without the tunnelvision, because while you trade you're mostly focused on your own trade but there are probably many things going on that are easy to miss, not to mention your own mistakes and so on, the subtle things are amongst the most valuable in my opinion and they are very hard to spot, even to a well trained eye in a fast enough market.

In short I'm just saying that I always preferred having the quality in my trading, instead of the quantity.

Funnily enough I recorded for the first time on Friday - wish I'd done it earlier - it certainly keeps you honest.

The tennis trade became successful because of a review of the numbers in Jan, one tweak to the odds and it's become profitable - at least for the first couple of hundred. 1000 trades+ and then I'll be happy with it.

I need to do the same with the football, so thanks for the kick up the bum.

The quality over quantity is definitely something to get your head around to be sure. It feels counter intuitive when you're at the £2 stakes stage because the returns are so tiny, but I've found as the stakes increase it begins to make sense. Then I found that I currently have a comfort zone for stakes - above a certain number and old panicky habits kick in. So slow and steady increases - as much to get my head round it - are key methinks.

These three articles show what can be done with simple strategies:
https://sportstradinglife.com/2018/04/p ... interview/
https://www.paulorebelotrader.com/en/pa ... elo-diary/
https://thetab.com/2015/11/06/we-made-4 ... ndon-60967

Scary numbers but certainly something to aspire to.

[ShaunWhite]

It feels counter intuitive when you're at the £2 stakes stage because the returns are so tiny

This is so often said but the issue is how people measure their returns. Try measuring your returns some other way apart from absolute cash terms, maybe use return on turnover, or return on 'normal' stake. Keeping your return% high is much more satisfying and realistic than being bothered if that's £1 or £1.50. And lets say you start making £1000 a week, you need some way to keep things in perspective otherwise you'll be equally unphased by losing 50s.

The biggest danger with this 'tiny' returns mentality is that people start to think "well if i was taking it seriously I'd be a winner, I'm losing because I'm not bothered about the 10 pences.". Truth is that if you can't make a profit with a tenner, you can't make one with a grand.

[spreadbetting]

It feels counter intuitive when you're at the £2 stakes stage because the returns are so tiny

The biggest danger with this 'tiny' returns mentality is that people start to think "well if i was taking it seriously I'd be a winner, I'm losing because I'm not bothered about the 10 pences.". Truth is that if you can't make a profit with a tenner, you can't make one with a grand.

Problem is, not many people are bothered about losing 10 pence here and there, hard to keep focus when the amounts mean nothing to you. Keeping to low stakes usually means people will stay in the game longer and pay their money to ebook or other service providers rather than lose it on the exchange so I can see why it gets touted around a lot. The majority of punters would be better off losing it quick and moving on rather than keeping the dream alive and being milked elsewhere

[Vladimir CC]

It feels counter intuitive when you're at the £2 stakes stage because the returns are so tiny

The biggest danger with this 'tiny' returns mentality is that people start to think "well if i was taking it seriously I'd be a winner, I'm losing because I'm not bothered about the 10 pences.". Truth is that if you can't make a profit with a tenner, you can't make one with a grand.

My advice would be to hide the balance. I'd look at my balance after every race, to see how much it grew or shrinked, even if it was for few pennies. I would enter a trade with a biased mentality: "I don't need to lose anymore" if my balance was less than 2-3 trades ago or "I need to not lose this profit". Sometimes I'd cut the session short after seeing how much my balance grew after pulling a bigger trade. Now when I don't see the numbers I enter the trade with a neutral emotion. I end the sessions when I feel that it's not my day or when I get bored. So I can sleep better at night just remembering that my green trades surpassed the red ones, rather than looking at the balance and seeing a 15p profit from 2£ stakes.

[Kai]

My advice would be to hide the balance. I'd look at my balance after every race, to see how much it grew or shrinked, even if it was for few pennies.

Hiding the balance is just avoiding the core issue at hand for me, same as hiding the profit column from the ladder. I think it makes more sense to face the issue head on, sooner rather than later, to develop the sort of mental strength and discipline that is needed. Don't think you can really develop it overnight by generally avoiding it, you have to be tested and challenged to grow it naturally, very much like growing a muscle by stretching it and pushing it to the limit.

You can't exactly get ripped by doing a few jumping jacks every day, much like you can't really expect to develop all sorts of mental skills playing around with pennies either.

Sure, your mood can be impacted by the results, that much should be allowed as you're not a robot, but certainly not your decision-making.

[indigokid]

It feels counter intuitive when you're at the £2 stakes stage because the returns are so tiny

This is so often said but the issue is how people measure their returns. Try measuring your returns some other way apart from absolute cash terms, maybe use return on turnover, or return on 'normal' stake. Keeping your return% high is much more satisfying and realistic than being bothered if that's £1 or £1.50. And lets say you start making £1000 a week, you need some way to keep things in perspective otherwise you'll be equally unphased by losing 50s.

The biggest danger with this 'tiny' returns mentality is that people start to think "well if i was taking it seriously I'd be a winner, I'm losing because I'm not bothered about the 10 pences.". Truth is that if you can't make a profit with a tenner, you can't make one with a grand.

Yeah, I agree with this. It's not how I measure my returns. I work on a daily/weekly/monthly percentage increase. Sometimes it's up, sometimes it's down and overall it should be going up. Peter's losers game idea and returns-average-per-market were good for this.

The small stakes strategy is principally to get my software and market understanding right and then, for me at least, to measure where negative psychology kicks in. Any new strategy/practice for me requires a bit of training out the knee-jerk reactions. Especially with stake increase as I find that unconsciously my mind is working to the previous loss amount. So let's say:

Week 1: either take win, or cash out for -10%.
Stake: £50
10% = £5

And then let's say for exaggeration's sake I then go:

Week 2:
Stake: £1000
10% = £100

But my mind is still thinking £5 and starts freaking out as soon as it gets above that and then all the usual loss-chasing fear-deflecting stuff kicks in. I just have to train it out. TBH, just reading that what I need to do is train myself to use varied stakes and automatically calc 10% (or whatever) regardless of stake.

Thanks for that prod. How do you manage varying stake sizes?

Cash out safely - there's always another trade.

[indigokid]

Something to keep in mind is that you don't always need live markets to keep improving, sometimes your time could maybe be spent more efficiently by analyzing your past trades instead of trading everything you can get your hands on.

Spot on Kai, again thanks for the prod.

I've just sat down and analyzed all of my football trades from the last four months. I've noticed three things.

1. Varying from trading plan.
2. Loss chasing when I go up stakes.
3. Upping stakes too soon i.e. % of bank has increased ahead of actual increase in bank so that the losses hurt more than they should.

My profitability would have been nearly double and psychologically it would have been more positive if I'd reversed the above.

Interesting. Lots to think about.

[Kai]

TBH, just reading that what I need to do is train myself to use varied stakes and automatically calc 10% (or whatever) regardless of stake.

How do you manage varying stake sizes?

Never been a fan of these types of staking approaches.

Stakes and position sizes may seem like only numbers, but in reality they are a direct reflection of your ability and confidence levels, I guess you could say that they are just an extension of your comfort zone and if you venture well outside of this zone you will most likely run into all sorts of emotional issues. So ideally, your trades should be at position sizes that make you unbreakable both mentally and emotionally, for very obvious reasons, so that your judgement and decision-making remains objective and execution clean.

If you're not straight betting, then your (mental) stoploss in general should be at a point where you realize that your trade is wrong, and not at a point determined by the maximum amount of money you are willing to lose, if that's making any sense. I feel this is one of the most common mistakes around, it's okay to change your mind mid-trade, very important to develop this sort of mental flexibility, and to keep the ego in check because the stronger your opinion the harder it usually is to get out of a bad trade.

That's why I would suggest to find a comfortable staking plateau where you are rewarded for trading good, but spanked slightly when you get it wrong, just enough to force you to learn from your mistakes, that for me personally is the fastest way to learn. Once you feel your ability and confidence levels have improved you can try and reach a new plateau, and so on. You can have a look at Peter's staking, you don't see him changing the % every day, he's found a plateau that he is more than comfortable with so he simply stakes according to the quality of opportunity and the depending on the liquidity of the market.

Very easy to scale your stakes through software, but the real scaling is going on inside your own head, I'd say that this is why you end up chasing losses. For example, sometimes I practically used my whole trading bank on a preoff trade days before an event went live, and despite feeling confident about the setup of the trade the execution part was immensely difficult at times and I had a bit of trouble sleeping knowing that I had to leave the position overnight with well over a 100 to lose/gain per tick, with irrational fears of not being in control slowly creeping in, even though I was aware that nothing drastic can really happen it's still a very uncomfortable feeling and it made the simplest of things very difficult and the execution got pretty messy at times. So obviously, if you have trouble sleeping then your position size is well outside your comfort zone and the amount of stress overall isn't really worth it no matter the end result, in my opinion at least. The only real way to expand your comfort zone that I have found is gradually through enough practice and enough confidence, not sure if there's any real shortcuts here other than just plain old hard work. I feel the best way to trade is to literally not care about the end result of any one particular trade.

So likewise, you can do a bit of self-analyzing as well whilst you trade, if your heart starts racing mid-trade or something like that then that's a clear indicator that your positions may be too large to handle comfortably at this moment in time, it's better to manage your stress levels and emotional interference than just mindlessly increasing it.

[indigokid]

Never been a fan of these types of staking approaches.

Stakes and position sizes may seem like only numbers, but in reality they are a direct reflection of your ability and confidence levels, I guess you could say that they are just an extension of your comfort zone and if you venture well outside of this zone you will most likely run into all sorts of emotional issues. So ideally, your trades should be at position sizes that make you unbreakable both mentally and emotionally, for very obvious reasons, so that your judgement and decision-making remains objective and execution clean.

If you're not straight betting, then your (mental) stoploss in general should be at a point where you realize that your trade is wrong, and not at a point determined by the maximum amount of money you are willing to lose, if that's making any sense. I feel this is one of the most common mistakes around, it's okay to change your mind mid-trade, very important to develop this sort of mental flexibility, and to keep the ego in check because the stronger your opinion the harder it usually is to get out of a bad trade.

Yeah, this makes sense. I tried the variable stakes with fixed % method on the nags yesterday daytime as an experiment. It put me at a minor loss for a hell of a lot of work. I could see myself doing exactly what you're saying: staying with a trade that was basically wrong.

I then took my old football strategy (which I only left because my staking got out of my comfort zone) and applied it to the Spurs v Southampton game. That worked to a fixed % and worked for that game. However in the same game I then applied a psycoff style trade looking for good value bets. It increased my overall return by a factor of ten. Quite an eye opener. Especially as it works on a is the trade right/wrong principle.

Also I did it live as opposed to my normal pre-match no watching at all and with a proper idea of the expected potential outcomes.

That's why I would suggest to find a comfortable staking plateau where you are rewarded for trading good, but spanked slightly when you get it wrong, just enough to force you to learn from your mistakes, that for me personally is the fastest way to learn. Once you feel your ability and confidence levels have improved you can try and reach a new plateau, and so on. You can have a look at Peter's staking, you don't see him changing the % every day, he's found a plateau that he is more than comfortable with so he simply stakes according to the quality of opportunity and the depending on the liquidity of the market.

The only real way to expand your comfort zone that I have found is gradually through enough practice and enough confidence, not sure if there's any real shortcuts here other than just plain old hard work. I feel the best way to trade is to literally not care about the end result of any one particular trade.

I think this is good also. I did this last night, unconsciously, but it meant at every moment I could have exited without any worry - even though my son is an avid Spurs supporter and would have been writhing on the floor with the same decisions.

So likewise, you can do a bit of self-analyzing as well whilst you trade, if your heart starts racing mid-trade or something like that then that's a clear indicator that your positions may be too large to handle comfortably at this moment in time, it's better to manage your stress levels and emotional interference than just mindlessly increasing it.

On it like a car bonnet. Thanks for all your help Kai.

I think I'm going to hang fire on the nags for the mo and focus on getting really good at the one or two things I've already started, as you guys have previously advised. Football/tennis for me.

[Kai]

I did it live as opposed to my normal pre-match no watching at all and with a proper idea of the expected potential outcomes.

Opening an inplay position before the game even starts makes zero sense to me, because what little value there is prematch is usually long gone by the time the match starts, as the market corrects itself when it's obvious enough. I think the best opportunities are created during play itself, if I had to generalize I'd say when the match goes out of kilter for whatever reason but has a decent chance of reverting to mean.

[indigokid]

I did it live as opposed to my normal pre-match no watching at all and with a proper idea of the expected potential outcomes.

Opening an inplay position before the game even starts makes zero sense to me, because what little value there is prematch is usually long gone by the time the match starts, as the market corrects itself when it's obvious enough. I think the best opportunities are created during play itself, if I had to generalize I'd say when the match goes out of kilter for whatever reason but has a decent chance of reverting to mean.

Yep, the two were different. My original football strategy was stats-based with pre-defined exits on +\- goals.

So I ran that alongside an in-play football strategy.
Which was very successful. I’ve been running that for two days now, and thus far it seems very good. I’m going to run that for a week and nothing else and see how it goes.

The live strategy works particularly well with the “is this a good trade” heuristic you shared earlier. Thanks for that.

[indigokid]

If you're not straight betting, then your (mental) stoploss in general should be at a point where you realize that your trade is wrong, and not at a point determined by the maximum amount of money you are willing to lose, if that's making any sense. I feel this is one of the most common mistakes around, it's okay to change your mind mid-trade, very important to develop this sort of mental flexibility, and to keep the ego in check because the stronger your opinion the harder it usually is to get out of a bad trade.

Thanks for your help so far. I just wanted to give you a quick update on how it's gone for the last 10 days based on your advice.
I reduced my sports to one: Football.

I then focused on two trading schemes:
1. Over/Unders (stats based)
2. Over/unders (value based)

Profitable trades: £2359.23
Unprofitable trades: -£1773.15
Net P/L: £586.08

My starting bank was £511, at it's highest around £1700, now at £1105.

I'd say approximately £1000 of the unprofitable trades were simply the cost of doing business on trades that turned negative in-play and the other £700+ where I hadn't developed the mental flexibility to exit for a loss and dropped the whole lot. I noticed these were usually higher stakes trades where I think fear was probably making me freeze when the in-play momentum had changed to the negative but there was still the off-chance of a goal.

I also think I need to trade less. 1-2 games on a week day. 1-5 on a weekend. One at a time. And even then, not trade every game just the ones with obvious value (which is often the hardest bit I think - letting go of the idea that you might miss a trade).

So, can I ask is this the right approach and do you have any advice from your experience on how to develop that mental agility further?

The bulk of the trades were done on the second scheme above.

Thank you for your time.