So you want to make a living from trading....

[ShaunWhite]

I'll be the first to admit, that compared to most people on this forum, I know f' all about sport, I come primarily from the world of business and I wish had your knowledge.

One thing I can bring to the table is to try and help people see that, imho anyway, in order to make a living from trading you need to treat it like a serious business, and every other serious profession under the sun (barring the fun illegal ones) needs to operate under sound business practices. I don't see why this should be any different. Maybe once you're as rich as Croesus you can kick all this into touch, but certainly in the first few years it won't do any harm.

I'm not going to write a book on it here, as I suspect few people have got past the first paragraph anyway, so I'll just throw one thing into the mix for now.

Income required:
When you work out how much you need to live on per month, don't just equate that with your expected BF earnings in a month.

Your BF earnings are just your Turnover, the equivelent of the sales generated by your business, or revenue.

You then need to deduct costs which take you, via Gross Profit, to your Net Profit figure. This is the figure you will have as income. Remember, turnover is vanity, profit is sanity.

I strongly advise that you properly work out your operating cost forecast, in fact you can't calcuate your target revenue* without it !

Some costs you might like to consider are : (I accept most will be finger-in-the-air figures, some might be zero and some will be small)

*Software subscriptions
*Information service subscriptions (RUK, ATR etc)
*IT spend incl upgarades (UPS batteries, trading gadgets etc)
*Tech outage costs (even with great disater recovery, they always cost something. Work out your maximum worst case, and expect 3 instances)
*Additional utility bills because you're at home during the day
*Training and ongoing education costs
*Income insurance in the event of accidents/illness
*Pension contributions and health insurance cost (if you previously had them through work)
*Class 3 National insurance contributions (if you still want a govt pension)

Then there's demands on your time:
*5 or 6 weeks holiday
*2 or 3 weeks sickness (you might be heathly now but you never know, so include it. If you don't need it then great, that's your xmas bonus)
*Tech outage days (perhaps 6 a year)
*Other days off, funerals, weddings, unexpected sunshine etc

.....and if I over estimated my costs, that's great and the family get a better holiday next year.

Thankfully trading doesn't attract the other usual costs like Class 4 NI and the big one, Income Tax.

I KNOW this is as dull as ditch water but if you/I want to succeed and become self sufficient, I feel sports trading needs to be approached with a professional mindset, it's not just shovelling coins in a fruit machine and pocketing the winnings.

Maybe I'll succeed at this game long term, maybe I won't (it's still only year1q3 fulltime for me). But if I do fail, it won't be because I fooled myself about the different between turnover and profit.

Could this be the most boring forum post ever?


*I know I might get purists saying that you shouldn't have a target revenue figure, and they're not wrong per se, but you do need some figure in mind.

[Deeppockets]

Looking at the time you posted, do you have trouble sleepng?
I have always thought Turnover was Gross sales rather than Net.

[Bluesky]

Excellent post Shaun I think anyone planning on trading for a living should go through this kind of exercise. Your comment regarding your knowledge of sport is interesting. If your purely a numbers trader then I don't think it matters all that much if you don't know a lot about the sport you are trading.

In fact having chatted with people who have bet on the horses for over 40 years and then finally started to trade, one of the things they found really difficult was to trust the numbers before their eyes, and ignore what they thought they "knew" would happen in the race.

[SeaHorseRacing]

Thanks Shaun. What sports do you trade?

[Spike]

Great post Shaun, I will certainly use a few of your points going forward.

[Halliday]

Some very good points there Shaun

I'd just like to add ( and I said it many times ) you have enjoy what your doing , and if you've tried , and are still trying and you find it stressful or a chore doing your research etc . Then it's really no different from a day job, because it's not freeing you up too enjoy yourself and life .

[ShaunWhite]

Looking at the time you posted, do you have trouble sleepng?
I have always thought Turnover was Gross sales rather than Net.

Yeah I've always had terrible trouble with sleeping. That's one of the benefits of being your own boss. No alarm clock.

Your right about the net and gross. If I confused the two then I'm going to blame that on sleeping as well.

[ruthlessimon]

yeah great post shaun. ah 4am is the best time for market analysis! I love the peace & quiet (I'm pretty much nocturnal these days) my trading business model would be: 95% research, 5% live trading. I don't have a set monetary goal, just how far can I push myself, ultimately with the aim to achieve Webb level status. highly unlikely, but if you "shoot for the moon, even if you miss you'll still land with the stars". gl & hope ya succeed

[ShaunWhite]

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SHR - I just do pre-off horses at the moment, although in the dead of night I've had a bit of a dabble with basketball (disaterous) and tennis (OKish). I find only having about 4 hours a day to work on the horses a bit frustrating but as the amount of research and programming I'm doing is slowing down, I really want to start to exploring some other sports I like to watch, suit my waking hours, and suit my style of trading. WTA fit's that brief to a tee.
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Thanks everyone for the positive feedback. It's just an angle I've never really seen people talking about. Some of it might sound OTT, but better to have too much info and bin some, than realise you forgot something when it's too late. Like trading profits, unexpected bills that come little and often add up too, and the bank manager doesn't give a damn about how dodgy the Betfair API is.

When it comes to sports knowledge I'm not totally clueless, I drank enough terrible coffee at the bookies in the 80s and 90s to know a nice looking horse when I see one. But I don't know individual horses or teams well enough to have any pre-conveived ideas about how they 'should' be rated by the public & pros. The knowledge some people have about who rode what horse and whether it likes carrots or sugar lumps is pretty amazing, but I don't care who wins or loses, and not knowing what should be a drifer or a steamer doesn't cloud my judgement about what my eyes and graphs are seeing.

If I could wake up tomorrow and know every stat going I would and I'll never be a superstar trader because I don't know all that stuff. But I know that I tick so many other boxes that I should, in theory, be able to make enough. Just enough and freedom will do me. When I was 20 I realised we only had about 60 adult years, so the plan was to work my nuts off for 30 and try and freewheel the rest. Giving half my life to 'the man' seemed more than fair. I didn't quite manage to save enough, but did quit the 9 til 9 about 4 years ago. So far, touch wood, trading is starting to fill the hole in that deficit. Plus, I LOVE it.

I first had a go at trading around 2005/6, I wasn't really in the right place mentally, I didn't have the right software and lost BIG banks because of unreliable tech (hence my slight obsession with disaster strategies in other posts). I was basically rubbish at it. I was also getting really poor advice, and good internet info was sparse. I also got involved with a trading platform which is now long gone, run by some guys who I were frankly, bullsh!tters. How I wish I'd known about PW back then!

OK, thanks again for the kind words. The general camaraderie in this place is priceless, otherwise it would be a lonely old game with just the missus and the dog to chat with about trading I think I''ve got the only Jack Russell in the country who fully understands the finer details of support and resistance points.

...as usual I've stayed into 'Dr Diary' territory.

[Dallas]

Great post Shaun, I've always found those who have a love of a particular sport tend to stuggle just as much and in a similar way as those who come from a gambling background, their own personal views will often cloud whats staring them in the face often ignoring the obvious and what the markets are actually saying and in some cases shouting to them.

I came into this having come from a self employeed /own business background myself and with little to no knowledge of any sport (apart from a few well known names) but certainly no idea or any preconceived views of what the odds of something should be which in turn allowed me to trade the pure numbers in front of me without any outside interference leaving me to focus on the other aspects much of what you have stated in your OP.

Ps, i know of at least two other traders who could nt be without their trusty Jack Russel by their side through the daily grind

[LeTiss]

Without getting too deep, I found the biggest cost of being self-employed trading was the cost to my social life and love life

I've mentioned this many times, but my admiration for PW has got nothing to do with his consistent spectacular greens, my admiration is how he maintained a vibrant family life at the same time. I became a bit of a recluse, a loner, it changed me as a person - how do you build that into the costs of being self-employed, Shaun?

[jimibt]

leTiss - i have to agree that keeping the balance right is one of the main items overlooked here. left to my own devices, i don't moderate myself very well and can easily spend > 12 hours both working on the markets and researching new edges each day. luckily, the balance is maintained by the ever present reminder that life is occurring on other axis by my better half. altho totally supportive of my endeavours, she knows my personality traits well enough to delicately remind me when we've once again become passing souls - a balance i'm keen to keep in check.

[bennyboy351]

Hi Shaun,
Nice post!

I'm hoping to swap semi-retirement for trading professionally one day.

My biggest problems at present, are that I'm struggling to kick the habits of going in play to reduce/recoup losses and I'm not sure what kind of 'research' I need to do when trying to come up with an 'edge' in the first place.

So for now, its back to minimum stakes and concentrate on breaking (some of my) bad habits!

All the best
George.

[LeTiss]

I know some people will think I am a little crazy, but I had serious problems early doors accepting losses and not going 'IP' - that's because I was a punter initially, and I couldn't get my head around the fact I had lost money before a match had started - I would undo all my good work with an eye watering loss

What did I do?.......this is the crazy bit! - I have never admitted this before on here

Whenever I made a decent profit, I decided to give 10% back. However, it was all part of re-wiring my brain, re-educating myself. For example, If I had made a profit of £100 for the day, I then purposely did a trade that lost me up to £10, just so I could get used to redding that trade up, and accepting my loss, knowing I was still up £90 on the day. It was amazing how quickly it became part of my mentality, I had escaped the desire to go 'IP' and just accpeted that losses are part of this game.

I had turned the corner, and I have never looked back

[SeaHorseRacing]

I know some people will think I am a little crazy, but I had serious problems early doors accepting losses and not going 'IP' - that's because I was a punter initially, and I couldn't get my head around the fact I had lost money before a match had started - I would undo all my good work with an eye watering loss

What did I do?.......this is the crazy bit! - I have never admitted this before on here

Whenever I made a decent profit, I decided to give 10% back. However, it was all part of re-wiring my brain, re-educating myself. For example, If I had made a profit of £100 for the day, I then purposely did a trade that lost me up to £10, just so I could get used to redding that trade up, and accepting my loss, knowing I was still up £90 on the day. It was amazing how quickly it became part of my mentality, I had escaped the desire to go 'IP' and just accpeted that losses are part of this game.

I had turned the corner, and I have never looked back

Not crazy at all.

I cannot say I am in your shoes, I busted banks atleast once a month for the same reason. Its been 4 months now and not even close. Is this going to continue? I hope so. Its a new habit I have learned.

If you want it that much you can get it. A loss doesnt upset me anymore, if i make a cock up I get annoyed with myself.
Yesterday i really did a poor trade in the 2.50 Sedgefield. I still took the loss and just got irritated with myself but nothing about the loss. I traded to early and reflect my irritaion on that not the loss. 4 months ago I wouldnt have taken the loss.
I honestly believe its just a habit and it really deosnt take that long to change a bad habit to a good habit. Persistance,

I alwasy enjoy reading your post. Thanks for sharing mate.