What causes your losses

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ubetido
Posts: 16
Joined: Tue Jun 03, 2014 1:16 pm

Hi All

We have all read in regards to losses how a trader has let losses run or gone in play etc etc.

I thought it would be an idea for traders to identify losing trades and if someone can offer help then they can share.

I'll kick it off by sharing this example:
I was looking at a runner in a horse race that was trading between 3.20-3.50 liquidity in the race was growing and there was strength of support and resistance at these levels. As the time was getting towards 2 minutes to the jump i decided to enter a lay 3.20 shortly after i did money came on the back side very quickly i got out for a 5 tick loss money just kept coming and it ended up starting at 2.40. As it turned out this was a breakout.
  • Did i trade this how others would have seen it
  • Should i have waited for the breakout to confirm
  • Should i have observed what the 2nd and 3rd fav were doing as it turned out they drifted
Over 20 races how many times is this likely to happen?

I am now more cautious in the tighter trading ranges


Regards
Ubetido
Korattt
Posts: 2405
Joined: Mon Dec 21, 2015 6:46 pm

Hi,

Sounds to me as if you opened your position too early maybe?, did you wait until the last market finished?, always wait for the genuine betting money to appear as evidence of how the move is likely to pan out, then when the market shows its hand get on, until then wait, wait for something to show in the market that looks prominent, something that hasn't appeared whilst you were waiting B4
ubetido
Posts: 16
Joined: Tue Jun 03, 2014 1:16 pm

Hi all

Wow Not many traders have losses here ?

Follow the trend, the trend is your friend etc

You start to see money coming for the favorite at 2.80 highest its been is 3.00 now you wait to see if it is a real move or false move for confirmation. The move continues to 2.40 now it has confirmed the direction, you enter a back bet at 2.40 looking for a few ticks profit, then a big bet comes in on the lay side at 2.42 and starts to accelerate the other way. Will it turn again as the trend was down? Should i take the loss? Should i wait?

Thanks Koratt

Cheers
Ubetido
Bluesky
Posts: 420
Joined: Mon Sep 19, 2016 9:26 pm

ubetido wrote:
Tue Aug 08, 2017 2:45 am
You start to see money coming for the favorite at 2.80 highest its been is 3.00 now you wait to see if it is a real move or false move for confirmation. The move continues to 2.40 now it has confirmed the direction, you enter a back bet at 2.40 looking for a few ticks profit, then a big bet comes in on the lay side at 2.42 and starts to accelerate the other way. Will it turn again as the trend was down? Should i take the loss? Should i wait?
Ubetido
Do you look at what is happening to the other prices on the other horses in the race? Are they likely to support or oppose what you think is going to happen to the price of the favorite? It's very easy to become fixated on what is happening to the horse (in this case the fav) that you are looking to trade and you tend to ignore what is happening to the price action of the other horses in the race. This will often become more pronounced once you enter a trade. Also how close is the off, is it a jump race, are the horses lining up, is the fav at the front or the back of the line up?

There are many factors to take into account when trading this is why I'm not sure how helpful you will find answers to the questions you have posed. Every race is different and its difficult to therefore have a general set of rules that will do the trick. It would be great if we could have a nice set if simple rules to follow and the money would start rolling in, unfortunately trading is not that easy, if it was there would not be so many people losing money.
ubetido
Posts: 16
Joined: Tue Jun 03, 2014 1:16 pm

Hi

Thank you for your input Bluesky. I understand what you have written.
Do you find the favorite will move first (Most liquidity) or react to the other horses movements in the market.

What i find hard to understand is how one can work towards attaining some form of income from trading, when markets do what they do at any given time.

I find confusing messages from the pros at times for example:
-Cut your losses quicker than you cut your profits.
-Be Patient with you trade if it goes against you it generally comes back

Many aspiring traders are investing money on Software, courses, e-books etc etc. Yet are not coming out the other end as reasonably profitable traders.

I understand no-one wants to give away an edge but surely if someone said at a particular support at bottom of the range i place a back bet, someone with experience knowing this is a risky trade would say something. but they don't? Why?

This is an extreme example but this is what is missing in all the information out there.

Regards
Ubetido
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marksmeets302
Posts: 527
Joined: Thu Dec 10, 2009 4:37 pm

It took me years to understand what is meant by "cut your losses, let your profits run". For me at least it means that you should try to lower the variance of your returns. As an example: let's say you let a lay at 2.0 go in-play just because you need 2 ticks to get to break-even. Unfortunately, the odds drop to 1.10. Then, the price reverses and you get matched. Woohoo! You got out at breakeven! But do this many times and eventually you will have a huge loss, significantly increasing the variance of your returns. The loss is so big that you are now forced to play with smaller stakes next time, and this will slow the recovery. Once I got this, I made it a habit to keep my mark-to-market risk smaller than the projected profits. I'm not saying this should be a hard rule (scalping is quite the opposite of this approach and there are people making money from that) but it certainly helps.

In the example above, if you already had accepted the risk of the odds going to 1.10, then you would not get out at 2.04 but would let the position expire. At least then you would get a favorable risk/reward situation. Knowing this beforehand you would not have used a large stake.

In the long term, trading is much more a game of managing risk and rewards than it is about identifying tops and bottoms, looking at indicators and what have you. Fortunately, risk and reward can be dealt with. They are just numbers and you can control them. Get it right and you will lose money slower. From there on you only need a small edge to become profitable.
ubetido
Posts: 16
Joined: Tue Jun 03, 2014 1:16 pm

Hi

Thanks Markmeets302 for your reply.

I don't go in play to try and turn a loss into profit so not an issue for me.

Regards
Ubetido
seanmac
Posts: 21
Joined: Wed Aug 17, 2011 6:48 am

You said ..... Should i have observed what the 2nd and 3rd fav were doing as it turned out they drifted.

A general rule of thumb .... as the 2nd & 3rd were drifting it is highly likely that the fav would move in.

Peter reinforces this in his videos , but you will see that he qualifies it well also.

Getting out for 5 tick loss indicates you can take a loss.

That's a positive to take out.

Reviewing your losing trades, again is a positive.

As I have stated before .... gathering empirical evidence through observation is still a valid method for collection of data.

Meaning .... watch your 20 races where the 2nd and 3rd fav drift and observe the price action of the fav.

A homogenous sample is ideal. Trying to compare apples with apples.

Bear with me, this post is well intentioned, but might not be articulated as well as i would have liked.

Keep safe, trade well!
Bluesky
Posts: 420
Joined: Mon Sep 19, 2016 9:26 pm

ubetido wrote:
Tue Aug 08, 2017 10:13 am
Hi

Thank you for your input Bluesky. I understand what you have written.
Do you find the favorite will move first (Most liquidity) or react to the other horses movements in the market.
I would like to tell you its always the favorite that acts first or its always the other horses, but hardly anything in trading always happens that's what makes it very difficult. One thing that might be of some use to you is to watch the book percentage.

If the fav starts to come in and nothing else goes out the book percentage is going to start rising. Now the favorite will not be able to keep coming in unless something starts to go out, so if the book percentage is say 103%, and the fav is stalling, if your on the favorite, now is the time to be keeping a very close eye on the other runners.

You need to see one or more of the other runners starting to drift so that the book percentage will come down closer to 100% and so allow the favorite some room to keep coming in.

Experienced traders can take all this and many other things into account almost without thinking about it, but they wont have been able to do this from day one. That's why it takes the few that succeed quite a long time (hundreds perhaps thousands of screen hours) before it all comes together.

I understand the frustration in your posts you would like nice straight forward answers to your straight forward questions, unfortunately pre race trading is not like a basic maths equation where if something is equal to x then y must be equal to so and so. I really wish it was like that but it is far more nuanced.

Over the years hundreds of people have take PWs and many other sports trading courses, I've chatted (either in person or on line) with quite a few of them. All of them have told me (without exception) that even after taking a trading course they still lost money for quite some time after, and some are still losing money now, but are determined to try and crack it.

The few that succeed really enjoy what they are doing, you might almost say they become addicted to trading, I think if you don't really love what you are doing then the chances of you eventually getting there are really small. The pros on this board such as Letiss recommend that you should trade what you know about and enjoy. This makes a great deal of sense to me. So if you love football and have a great passion for it, then that should probably be the first sport you want to look at with regards to trading.
ubetido
Posts: 16
Joined: Tue Jun 03, 2014 1:16 pm

Gentlemen thank you for your responses
Bluesky
I would like to tell you its always the favorite that acts first or its always the other horses, but hardly anything in trading always happens that's what makes it very difficult. One thing that might be of some use to you is to watch the book percentage.
Yes the market does what it does
If the fav starts to come in and nothing else goes out the book percentage is going to start rising. Now the favorite will not be able to keep coming in unless something starts to go out, so if the book percentage is say 103%, and the fav is stalling, if your on the favorite, now is the time to be keeping a very close eye on the other runners.
Yes aware of this
You need to see one or more of the other runners starting to drift so that the book percentage will come down closer to 100% and so allow the favorite some room to keep coming in.
Yes understand this
Experienced traders can take all this and many other things into account almost without thinking about it, but they wont have been able to do this from day one. That's why it takes the few that succeed quite a long time (hundreds perhaps thousands of screen hours) before it all comes together.
I am sure most traders put in the hard work necessary to try and get to succeed. I have read that at times people give up just before they were on the verge of success
I understand the frustration in your posts you would like nice straight forward answers to your straight forward questions, unfortunately pre race trading is not like a basic maths equation where if something is equal to x then y must be equal to so and so. I really wish it was like that but it is far more nuanced.
it can be frustrating because you feel you have done what you need to do but irrespective of this you are a bees knacker to being consistently profitable
Over the years hundreds of people have take PWs and many other sports trading courses, I've chatted (either in person or on line) with quite a few of them. All of them have told me (without exception) that even after taking a trading course they still lost money for quite some time after, and some are still losing money now, but are determined to try and crack it.
Yes teaching and getting positive outcomes with so many variables in the market and personalities one can only teach so much. At the end of the day the basic understanding of what moves the market is not that hard
The few that succeed really enjoy what they are doing, you might almost say they become addicted to trading, I think if you don't really love what you are doing then the chances of you eventually getting there are really small. The pros on this board such as Letiss recommend that you should trade what you know about and enjoy. This makes a great deal of sense to me. So if you love football and have a great passion for it, then that should probably be the first sport you want to look at with regards to trading.
Yes i enjoy trading in particular horse racing that's all i trade.


At the end of the day we have to carry our own cross.

Thank you again
Regards
ubetido
steven1976
Posts: 1744
Joined: Tue Jan 19, 2010 6:28 am

Not understanding a sport can cause losses. Stick to what you know would be my best advice. I know traders who make 20k + a month on football for many years, but constantly lose on horses.
Bluesky
Posts: 420
Joined: Mon Sep 19, 2016 9:26 pm

steven1976 wrote:
Thu Aug 10, 2017 4:30 pm
Not understanding a sport can cause losses. Stick to what you know would be my best advice. I know traders who make 20k + a month on football for many years, but constantly lose on horses.
Excellent advice, imagine how wonderful it must be making that kind of money from a sport you really enjoy watching.
weemac
Posts: 1216
Joined: Mon Sep 16, 2013 8:16 pm

Buying high, selling low.
threedogs
Posts: 79
Joined: Mon Jan 20, 2014 10:24 am

Excellent reading about the issues which affect the price of a horse however Adam Todd say it doesnt matter which way a price goes it is how you deal with the trade thats vital and does something called advanced coin toss trading which just proves that price direction taken at complete random will make profits by how the trade is managed ...
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ruthlessimon
Posts: 2094
Joined: Wed Mar 23, 2016 3:54 pm

... & one of those options, is to just hold to post.

Which, done 1000 times, ends up looking something like this:

Image

The most likely scenarios being a return on stake, between 0.0% & -0.4%

Which might explain why he no longer trades
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