Just finished adding up and checking all the data from last year. So here is a mini review: -

Last year I got off to a difficult start, to say the least. As explained over a year ago, my father was seriously Ill and requiring a lot of care. Sadly he passed away in late January and after a year of struggle I decided to take most of February off to get a clean break from a very difficult period. So I started the year with two months that produced very little activity. I thought that may scupper the year but I was wrong, 2009 was another excellent year.

I traded around an extra 11% events last year which helped propel things forward. On the racing markets I was active on nearly 9500 races. Turnover is vanity at the end of the day, so one of the most important metrics I look at is my return on turnover. You could double your activity but if that results in your return halving you are wasting your time. You have to strike the balance between finding opportunities and finding them at a contributory rate. After a few years of a falling returns, probably due to the maturity of the market, my returns went up last year. This rise in return combined with a jump in activity produced a bumper year. My activity is now approaching double what is was two years ago. What was a big month two years ago now feels normal. I really feel that last year was were I found an entirely new level. I think some of my best work and research has all occurred within the last year, near on ten years since I first started.

It’s never as easy path though; it’s often littered with mistakes, errors and false dawns. I had a difficult start to the year through inactivity, but March pulled in a record week for me and the month settled well ahead of expectations. March also brought a new record for me in terms of turnover on just one race. It’s amazing what you can achieve if you push it when the conditions are just right. April also exceeded expectations as did May. May was notable for what I thought was possibly the best trade ever and so it turned out to be, I never beat it for the year. I entered the busy June period with it good spirits.

June was very disappointing though and I ended up down on my total from the previous year. I redoubled my efforts, did some more research as to why it had been so tough, tweaked my style and that turned things around. July, August and September went up, up and up and I peaked, rather unusually it has to be said, in October when I smashed a whole host of records to end up on my best ever month by far. From there the evening racing ends and  things tend to quieten down for the year, but the remaining months have all been pretty good. September brought my longest ever sequence of winning races at 82 in a row. One failed trade for -£2 stopped the sequence and a possible 109 in a row; that will have to wait for another year. Unfortunately these runs only come around once every couple of years or so, so that record may stand for some time.

While the start of 2010 is proving a bit frosty so far, I am pretty confident about the year ahead. Despite being in my tenth year in the market, despite general growth grinding to a halt, despite increased costs, charges and other negative factors; I think the market overall is still showing lots of promise. Back in 2004 when I did my first public talk on the exchanges markets, I wasn’t convinced that I be so confident in 2010. Of course, things can and will change, but it’s the more radical changes that you can’t predict that are generally the concerning factors and you have no control over those anyhow.

The biggest challenge for me currently is that the market isn’t really able to take very large stakes. If you raise your stakes too high then the market reacts against you and any value is gone. Therefore it’s clear to me that those on smaller stakes stand a better chance of participating in the market. This is a big limiting factor of the exchange model as it stands and at the rate at which it is growing. Raising money to put into the market isn’t a problem, but putting it into the market is! I’ll discuss this more in another post. But the net effect is that due to the lack of growth in the market, the average stake I am using is falling. Over the last three years my average stake has fallen 11%. My answer to this problem is just to find better ways to put it to use. For smaller participants opportunities are still out there. If you only look at horse racing and that figure of 9500 races. Even if you just managed a tiny profit on each race, it soon adds up as the year trundles on.

I’m really looking forward to this year. I hope you have a cracking 2010.