See-saws , swings and roundabouts !

[JOIZZY]

Hi , some guidance on the following trade would be helpful to many of us who seem to get it wrong more often than not.
The 8.40 tonight at Kempton saw the Fav backed in from 5.00 down to 4.00 approx five mins to off time then go on a massive drift out to approx 5.5 ( SP 4/1 ) in the space of the last 2 mins or so. Meanwhile , what had been the 2nd fav ALSO drifted massively from 5.50 out to 9+ ( SP 6/1 ) again in the last 2 mins.This all happened in the few minutes to the off.
We , as new wannabee traders are constantly told:-
1, The Favs act in a see-saw action to " equalize " each other out , give or take .
2, NOT to jump on the bandwagon IN FRONT of the queue as it will regularly turn against you just as you place your trade !!!
3. Be a contrarian trader ie go AGAINST the crowd behavior.
All of these pieces of advice would have made a huge loss for some on this race ( me ! ) whilst others would have made a mint ( you ! ).
The one piece of advice i have asked about before is about jumping the queue ( or joining the back of it ) in a moving market.Why is this deemed to be poor trading ? - if a horse is drifting badly , surely the correct thing is to jump aboard , not try to predict the turning point which never seems to come.
I often see a price has moved a lot , say 4.00 to 5.00 then ANOTHER £1000 goes in to push it higher still and so on - push , push , push.This apparently successful trader is doing the complete opposite of what is generally said to be the best option , ie wait for it to turn/pause for breath.
I have read many articles from eminent traders on here extolling the virtues of contrarian investing. This may work on the stock market ( buy european stocks now and wait 5 years !) but does in work in 5 mins to off time - i think not?
I try to ask constructive questions so i hope those who know could shed some light on this apparent paradox.
Thank you.
ps.... just so you know in advance i don`t expect any secrets but hopefully a good discussion !
Thank you in advance.

[Alpha322]

Hi , some guidance on the following trade would be helpful to many of us who seem to get it wrong more often than not.
The 8.40 tonight at Kempton saw the Fav backed in from 5.00 down to 4.00 approx five mins to off time then go on a massive drift out to approx 5.5 ( SP 4/1 ) in the space of the last 2 mins or so. Meanwhile , what had been the 2nd fav ALSO drifted massively from 5.50 out to 9+ ( SP 6/1 ) again in the last 2 mins.This all happened in the few minutes to the off.
We , as new wannabee traders are constantly told:-
1, The Favs act in a see-saw action to " equalize " each other out , give or take .
2, NOT to jump on the bandwagon IN FRONT of the queue as it will regularly turn against you just as you place your trade !!!
3. Be a contrarian trader ie go AGAINST the crowd behavior.
All of these pieces of advice would have made a huge loss for some on this race ( me ! ) whilst others would have made a mint ( you ! ).
The one piece of advice i have asked about before is about jumping the queue ( or joining the back of it ) in a moving market.Why is this deemed to be poor trading ? - if a horse is drifting badly , surely the correct thing is to jump aboard , not try to predict the turning point which never seems to come.
I often see a price has moved a lot , say 4.00 to 5.00 then ANOTHER £1000 goes in to push it higher still and so on - push , push , push.This apparently successful trader is doing the complete opposite of what is generally said to be the best option , ie wait for it to turn/pause for breath.
I have read many articles from eminent traders on here extolling the virtues of contrarian investing. This may work on the stock market ( buy european stocks now and wait 5 years !) but does in work in 5 mins to off time - i think not?
I try to ask constructive questions so i hope those who know could shed some light on this apparent paradox.
Thank you.
ps.... just so you know in advance i don`t expect any secrets but hopefully a good discussion !
Thank you in advance.

Nobody will talk otherwise the BOMBER will be exposed

[rubysglory]

Hi Joizzy. My advice is listen to the advice many on this forum offer but ultimately form your own opinion and trade in a manner that you feel appropriate. Although advice given is provided with good intent, it is a starting point only. In trading there are no constants, only variables, and trading with a static set of rules is not always advisable. In general, each of the three points you highlight - the favs act in a see-saw action, nOT to jump on the bandwagon & be a contrarian are all sound pieces of advice. This does not mean they are the correct advice for betting on every type of race. You must learn to 'read' a market. It is my opinion that to trade the horses an understanding of what makes a market move is beneficial. It might only be beneficial once in every hundred races but it may save you. Try to understand why advice generally given was not appropriate for the 8.40 at Kempton and learn to identify such situations in the future. Was the market at or near 100% ? Was the overround allowing massive swings to eventuate? Was there a change in track conditions? Was the market compensating for movements on course ? Was there ..............?

rg

[Akindwurd]

I sympathise with the feeling that offering money to the queue is either pointless or paradoxical, at least in dynamic markets. If the market continues in a favourable direction, you won't get matched and if you do get matched it will be because the market has turned against you. The one-tick advantage from offering is a bit moot when the only reasonable certainty is that the price in 10 seconds' time will be nowhere near where it is now. You certainly CAN make money from simple whack-a-mole manic mouse clicking, provided you're just as fast at getting out. I've found a background in Serious Sam-type first person shooters to be invaluable in such cases

[Euler]

When you trade any market, make a note what would have worked, rather than what didn't. Do this on each market and before long you will begin to see a pattern emerge. Even if you trade at random you will green up more than red up, but probably not make a profit overall. If you can cut losses or get slightly better entry points you will turn net +ve as the barrier to getting profitable is very small.

[Euler]

For example, look at the scenario you have outlined in this market. It's obvious to me what trade would have worked here.

[JOIZZY]

Hi , thanks for the replies so far.
I get the feeling , in static/strong markets join the queue , in handicaps , all weather maybe take the money?
Can someone explain what a large over round is perceived to be , as it never seems to go more than 102% ?
Euler - Surely it`s only OBVIOUS after the event - could you explain what the obvious oversight was - how would you have traded this differently?
Thank you.

[Euler]

Laid both and cut out the loser, on this occasion there wouldn't have been one but it's not particulary likely that both will go in the same direction forever. Certainly possible but generally doesn't happen.

[Euler]

I should add, never look for the perfect trade, because it hardly ever exists. Accept you are going to be wrong on a regular basis and recognise quickly when you make a mistake or the market doesn't react the way you expect. The market presents many opportunties so another will be along in a minute.

[James1st]

Hi , some guidance on the following trade would be helpful to many of us who seem to get it wrong more often than not.
The 8.40 tonight at Kempton saw the Fav backed in from 5.00 down to 4.00 approx five mins to off time then go on a massive drift out to approx 5.5 ( SP 4/1 ) in the space of the last 2 mins or so. Meanwhile , what had been the 2nd fav ALSO drifted massively from 5.50 out to 9+ ( SP 6/1 ) again in the last 2 mins.This all happened in the few minutes to the off.
We , as new wannabee traders are constantly told:-
1, The Favs act in a see-saw action to " equalize " each other out , give or take .
2, NOT to jump on the bandwagon IN FRONT of the queue as it will regularly turn against you just as you place your trade !!!
3. Be a contrarian trader ie go AGAINST the crowd behavior.
All of these pieces of advice would have made a huge loss for some on this race ( me ! ) whilst others would have made a mint ( you ! ).
The one piece of advice i have asked about before is about jumping the queue ( or joining the back of it ) in a moving market.Why is this deemed to be poor trading ? - if a horse is drifting badly , surely the correct thing is to jump aboard , not try to predict the turning point which never seems to come.
I often see a price has moved a lot , say 4.00 to 5.00 then ANOTHER £1000 goes in to push it higher still and so on - push , push , push.This apparently successful trader is doing the complete opposite of what is generally said to be the best option , ie wait for it to turn/pause for breath.
I have read many articles from eminent traders on here extolling the virtues of contrarian investing. This may work on the stock market ( buy european stocks now and wait 5 years !) but does in work in 5 mins to off time - i think not?
I try to ask constructive questions so i hope those who know could shed some light on this apparent paradox.
Thank you.
ps.... just so you know in advance i don`t expect any secrets but hopefully a good discussion !
Thank you in advance.

An interesting post Joizzy.

Whoever told you to be "contrarian" needs their heads examining and any advisor joining a queue in a fast moving trend is clutching at straws. As for trading 2 horses (unless its a 2 horse race), thats just wearing 2 sets of blinkers instead of 1.

Don't ever take advice and try to make that advice fit every scenario; it just won't work.

[Euler]

Touche, I'd say pretty much all my decent swings trades I have made are contrarian, I hardly ever follow a trend because at some point it has to break and it can snap back triple quickly when it does. If you follow the crowd you will do no better than them.

At the end of the day everybody has many different ways of trading and none should be discount. I've often been surprised at how people trade the markets and that makes me never dismiss anything.

[James1st]

I agree in one sense Peter but terminology can be very confusing for newbies.

Being "contrarian" means going against the crowd, something that requires a higher knowledge (than a newbie trader has) of the current markets future action. When you refer to being contrarian you are simply declining to jump on board the current trend and waiting for a new opposing trend (swing) to start...then, most importantly, you are then joining a trend?

I don't think advice that is non specific in a forum helps newbies at all unless the poster is very detailed as to when to use a strategy.

For example the case Joizzy was referring to had odds of around 5's on a pair of favs and he was trying to utilise a very specific strategy designed for 2 short priced favs well clear of the field. Trading 2 short priced favs where they comprise 85% of the book is a totally different ballgame than trying that strategy on 5-1 shots; lol...they are practically outsiders. The "linkage" between Joizzy's horses was almost non existent.

[Euler]

OK, Understand where you are coming from. We were looking to address newbie education in April but ran out of time before peak season started, so we hope to do something this autumn.

Have to say when I posted what general specific advice newbies were looking for we got precious little response (of the right kind).

It's a tricky one, I think the main problem is everybody wants to earn money too fast.

[James1st]

The problem is like all training, novices don't actually know what questions to ask. I do agree though that too many of them assume they can rattle out £100 a day without actually learning the necessary skills.

A reasonable approach to training might be to cover the basics with a VT back up of the BA User guide, followed by a top down approach identifying several trading methods with examples.

A starter for 10 would be to extract all the newbie questions and answers already posted in this forum.

[Iron]

Whoever told you to be "contrarian" needs their heads examining

Whilst you might not be a fan of the contrarian approach, successful traders including Peter do swear by it, so it's not something advocated purely by the clinically insane!

Personally, I prefer to go with the trend, but I can see the logic behind going counter-trend, and it clearly works for some traders...

Jeff