When should you enter the market?

[JollyGreen]

I saw the post by Wyndon on market volumes and it prompted me to add this information. I just wanted to offer some insight on what I look for when placing an order.

Each day is different in terms of volume per race. I think if you took a large enough sample size you could probably find an average and a correlation but I am more of a feel trader.

I always maintain you can trade at any stage of a market. You could make a profit when the market first opens, a couple of hours after, midway through the day and then in the period just prior to the start. What you must be wary of is a sudden increase in volume. So early market trading can bite you as it is impossible to know when, or if, a large order will hit the market. The only period where you can predict the increase in flow is when the preceding race finishes. As the preceding race finishes the focus will switch to the next market and this will see an increase in money.

I try and tell people to be aware of when the money is coming as experience has taught me this is when it can work for you or work against you.

I will often switch to the next market as soon as the current one ends. Some people think I am slightly crazy but I know I can get a good early position or a decent read on the market. I just play by a simple rule.

If I am in a market early, I must be ready to exit when the new money comes

Now I won't just exit without thinking; I will form a view of what it happening and then I will decide if I exit or hold. So why would I do that? I am a swing trader, it is very rare you will find me scalping. I will do it if the market offers me the chance but I prefer to look for larger moves.

So let's assume I am in a market early and have opened a position on a horse that I have predicted will move down. I will use how the price has moved during the day, how the money is stacked up, etc to help me determine a move. There are other little things I can use to determine direction....but obviously I cannot post them on here.

I will watch the increase in money by ensuring I have the moving average option selected. Click the spanner for the settings and put a check mark in MA. I have attached a screen shot to show you.

We know that when money starts to flow it will have an effect on the price. If the money comes in my favour I will hold my position and look to grab as much profit as possible whereas money that is in opposition to my position means I will dump my position and reassess things.

I must also point out I am trading the favourite 80-90% of the time, you will not find me trading something price >10 as that is not my style. The rest of the time I am trading 2nd 3rd or 4th favourites. Why am I trading those?

Well money is what moves prices but it is also what keeps a price stable. Yes, some of you will say the favourite moves too much and is subject to whip-saw moves etc but IMHO it is the safest conveyance so to speak. Because the favourite always attracts most of the money it means there is more stability there. If you look at a horse priced at 30-40 you will find a small bet of £100 could destroy a position very quickly because it will only attract <1% of the market volume. You can be happy grabbing a couple of ticks when bang, an order devastates your position.

So a simple rule of thumb when you are learning to trade and looking when you should enter.

1. Never be afraid to trade a market early provided you do so for the correct reason. e.g. You spotted a drift or a steam, just always be ready to exit when the "real" money comes.

2. If you have waited for the preceding race to finish and the money is now starting to flow, just pause and make a note of what is happening. You often find a bit of crazy action where people are trying to perhaps "spoof" a position and the prices seem unstable. Just keep watching and eventually it should settle. Remember, concentrate on the now and watch what is happening, NOT what you want to happen. If you do this the market will often give you a clue.

Finally, don't rush in, let it settle and make sense. If it doesn't make sense then you need more practice or it's a poor market but either way you should abstain. It takes a few seconds to find a profitable trend so don't rush!

[redtra]

Brilliant posts Jollygreen and I must thank you for them. I've been reading them all and been taking on board your ideas...and today had my best day trading! Taking it steady, using smallish stakes and it's been very enjoyable! Thank you!

[rogerlisa]

Um very interesting. Thanks Jollygreen

[PeterLe]

Hi JG
This is a useful link:-
http://adamheathcote.blogspot.co.uk/200 ... oints.html

I printed it off and had it stuck next to my monitor for a long time
He also did an exit one too when you get to it!
Regards
Peter

[JollyGreen]

Yeah I forgot about that. What was funny was Adam and I would trade the same way but we saw things from a different angle!