The psychology of money

Trading is often about how to take the appropriate risk without exposing yourself to very human flaws.
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stueytrader
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Euler wrote:
Tue Jun 12, 2018 7:30 pm
But the nasty bit is the ridge overlooking the forest. In the middle, there is an oak. If I dive right and get it just right I can just squeeze through at full pelt. If I clip the Oak I will crash and tumble off the ridge. Whether I attempt it all depends on how confident I feel that day and if my time is good enough to have a shot at the best time. That's more or less how I trade the big races.
Confidence is an interesting concept, as I would suggest it is one of those 'Gestalt' type of ideas - many different factors line up and become a judgement at that time or decision. Guess this could be where 'knowledge' meets 'psychology' for the trader for sure.
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Derek27
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I'd be interested in hearing from anyone who has an idea or opinion on the balance of winners to losers on Betfair. Putting aside commission, would it be 50/50 or nearer 40/60, or even more skewed?
spreadbetting
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Derek27 wrote:
Tue Jun 12, 2018 7:55 pm
I'd be interested in hearing from anyone who has an idea or opinion on the balance of winners to losers on Betfair. Putting aside commission, would it be 50/50 or nearer 40/60, or even more skewed?
Not sure what you mean by that, Betfair's data ages ago said the percentages were 95% losers 5% winners longterm
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Derek27
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spreadbetting wrote:
Tue Jun 12, 2018 8:02 pm
Derek27 wrote:
Tue Jun 12, 2018 7:55 pm
I'd be interested in hearing from anyone who has an idea or opinion on the balance of winners to losers on Betfair. Putting aside commission, would it be 50/50 or nearer 40/60, or even more skewed?
Not sure what you mean by that, Betfair's data ages ago said the percentages were 95% losers 5% winners longterm
If commission is excluded from that the winners including commission would be even less than 5%. Considering profits always equal losses on Betfair I would have expected winners to be much bigger than 5%, but perhaps I'm way off the mark.
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ruthlessimon
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Euler wrote:
Tue Jun 12, 2018 7:30 pm
Curiously, I use an app to do virtual racing against other mountain bikers. There is a three-mile loop through the forest nearby that I've held the best time for the last four years, it resets each year.
Image

One day I'll have to come up there & make sure the time is decent enough to lead!

Again though that's a really interesting insight, TY Pete. :)
spreadbetting
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Derek27 wrote:
Tue Jun 12, 2018 8:06 pm
spreadbetting wrote:
Tue Jun 12, 2018 8:02 pm
Derek27 wrote:
Tue Jun 12, 2018 7:55 pm
I'd be interested in hearing from anyone who has an idea or opinion on the balance of winners to losers on Betfair. Putting aside commission, would it be 50/50 or nearer 40/60, or even more skewed?
Not sure what you mean by that, Betfair's data ages ago said the percentages were 95% losers 5% winners longterm
If commission is excluded from that the winners including commission would be even less than 5%. Considering profits always equal losses on Betfair I would have expected winners to be much bigger than 5%, but perhaps I'm way off the mark.
Those were apparently winning/losing accounts so commission would have been taken into account. Plus that was over a period rather than race and most losers just continue to punt away any profit til they become a net loser anyway. Basically the negative compound interest of commission will always keep the overall winners to a small percentage.
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Euler
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Derek27 wrote:
Tue Jun 12, 2018 7:55 pm
I'd be interested in hearing from anyone who has an idea or opinion on the balance of winners to losers on Betfair. Putting aside commission, would it be 50/50 or nearer 40/60, or even more skewed?
If you deduct commission the number is probably pretty high as it's commission that kills people in the long term. So the amount of money won and lost would be distributed roughly equally you would think, but maybe not the number of winners.
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ruthlessimon
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Derek27 wrote:
Tue Jun 12, 2018 7:55 pm
I'd be interested in hearing from anyone who has an idea or opinion on the balance of winners to losers on Betfair. Putting aside commission, would it be 50/50 or nearer 40/60, or even more skewed?
If you define winner as an all-time P&L above £0, probably a lot. But I prefer "winner" being used for a trader who could "live off their work" - to which end I think the 5% begins to seem more valid.

If I put £100,000 on Red, & it wins - I'm a winner - but I wouldn't consider myself a winner

actually that reminds me of this nutter!!

https://www.youtube.com/watch?v=zGCdBsOIKYA
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Dallas
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ruthlessimon wrote:
Tue Jun 12, 2018 9:28 pm

actually that reminds me of this nutter!!

https://www.youtube.com/watch?v=zGCdBsOIKYA
Im sure there was a short documentary made on him
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Derek27
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ruthlessimon wrote:
Tue Jun 12, 2018 9:28 pm
Derek27 wrote:
Tue Jun 12, 2018 7:55 pm
I'd be interested in hearing from anyone who has an idea or opinion on the balance of winners to losers on Betfair. Putting aside commission, would it be 50/50 or nearer 40/60, or even more skewed?
If you define winner as an all-time P&L above £0, probably a lot. But I prefer "winner" being used for a trader who could "live off their work" - to which end I think the 5% begins to seem more valid.

If I put £100,000 on Red, & it wins - I'm a winner - but I wouldn't consider myself a winner

actually that reminds me of this nutter!!

https://www.youtube.com/watch?v=zGCdBsOIKYA
Thats a defenition of a professional. A winner is someone whose account is in profit, either annually or lifetime.
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Derek27
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Dallas wrote:
Tue Jun 12, 2018 9:32 pm
ruthlessimon wrote:
Tue Jun 12, 2018 9:28 pm

actually that reminds me of this nutter!!

https://www.youtube.com/watch?v=zGCdBsOIKYA
Im sure there was a short documentary made on him
I wonder what percentage of people (like me) were hoping that he lost.
eightbo
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ruthlessimon wrote:
Tue Jun 12, 2018 9:28 pm

actually that reminds me of this nutter!!

https://www.youtube.com/watch?v=zGCdBsOIKYA
Knew exactly what video this was going to before clicking! (ok not exactly but probably)

@Dallas
I can remember seeing this on a documentary some time ago, it was centred around gambling and not the guy himself.
Might have been from Louis Theroux: Gambling in Las Vegas (2007), if not I believe something from Nat Geo channel on how gambling affects the brain.
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