Building your bank

[funkydj]

Evening guys,

I was wondering if anybody could give some advice on the best or most efficient way to build a bank up. After a long 9 years of trading on and off both pre off and now mainly inplay, I am seeing regular profits. But unfortunately the company I used to work for went bust in November so I would like to give this a good crack but would need to withdraw most of the winnings to live on, pay bills etc. But then fear the bank wouldn't grow and I wouldn't be a be to increase my stakes to progress. I was thinking of withdrawing 90% of profits each day and leave the other 10% to grow the bank. How has everybody else built their bank? Thanks in advance

[Derek27]

Evening guys,

I was wondering if anybody could give some advice on the best or most efficient way to build a bank up. After a long 9 years of trading on and off both pre off and now mainly inplay, I am seeing regular profits. But unfortunately the company I used to work for went bust in November so I would like to give this a good crack but would need to withdraw most of the winnings to live on, pay bills etc. But then fear the bank wouldn't grow and I wouldn't be a be to increase my stakes to progress. I was thinking of withdrawing 90% of profits each day and leave the other 10% to grow the bank. How has everybody else built their bank? Thanks in advance

Many people with regular jobs have to live off their last paycheque, as they say, you're only one paycheque away from being homeless. People fortunate enough to have savings are effectively living off a paycheque they earned months or years ago.

Personally, I think it's crazy to rely on making a living from trading without having enough funds to sustain you for a fair period of time, in the same way that supermarkets and other businesses don't pay their staff straight out of the till. They have money in reserve to counter the inevitable hard times.

How you go about it depends on the amount and consistency of your profits, but relying on daily profits sounds risky. For example, if I was punting on horses for a living, I'd expect to have losing months and I might be inclined to spend the year living off last year's profits. If you're a low-risk trader and a losing month is extremely rare, it might be a better idea to pay yourself a weekly or monthly salary that's comfortably below your average and let your bank grow with the excess. I don't see having a really good month as a reason for spoiling yourself when the exchange could go down with your open trades the following month - just cautiously bump up your salary if you're doing well.

Perhaps analyse your last few years of trading and plot in an Excel table/graph how much you could comfortably take out a month and allow your bank to grow. You also need to consider that not all trading strategies are scalable, as many find out. Doubling your bank and carrying on doesn't mean you'll double your profits.

[Kai]

Tricky situation but it can be an opportunity as well. You just have to trade well enough and the bank will grow organically as a result. But do not trade with rent/food/borrowed money!

I was thinking of withdrawing 90% of profits each day and leave the other 10% to grow the bank.

Well if you're mainly inplay racing you can probably get away with withdrawing most of it, you probably won't be drastically scaling your stakes there. This market is funny like that, you use smaller stakes but you can make more than most people make preoff on a much bigger bank, since swings are much bigger despite less volume overall.

How has everybody else built their bank?

I had some savings when I started, to avoid these sorts of pressures, so I just made an initial deposit at the start around 500-1000 and learned/built from there, never ended up depositing again. Luckily the bank survived a big early tilt and many outages later. But the first thing I did was build enough savings to live comfortably for a few years at least to cover all worst case scenarios etc, then you can built properly without pressure, like Derek said you cannot afford to trade paycheck to paycheck and have to manage your risk more sensibly than that, on both micro and macro levels.

But I would suggest transferring something like 1-2 extra reserve inplay banks out of your Main Wallet to another wallet on the exchange, in case you get wiped or something, to avoid having to deposit again or triggering affordability checks. Good luck.

[jamesedwards]

If you live in the UK, consider the impact of existing gambling affordability restrictions and the impending new legislation.

It's relatively easy to prove income when you have a job and salary, just flash a few payslips when you get asked. Now you are unemployed you risk having gambling accounts closed because you can't demonstrate a valid income.

With Betfair it seems the most important thing to avoid affordability checks is to never deposit. Therefore on top of the other pressures on cashflow, you really need to try and build and maintain a Betfair balance big enough to withstand a run of negative variance.

[jamesedwards]

....But then fear the bank wouldn't grow and I wouldn't be a be to increase my stakes to progress.

One other thing, never underestimate the impact of stake on your ROI%. Something that makes a good return at £1 stakes can easily completely collapse at £2 stakes.

eg see below my latest Greyhound automation, which shows a very typical pattern of decline as soon as I increase stakes beyond nominal.

Picture4.png

[Derek27]

....But then fear the bank wouldn't grow and I wouldn't be a be to increase my stakes to progress.

One other thing, never underestimate the impact of stake on your ROI%. Something that makes a good return at £1 stakes can easily completely collapse at £2 stakes.

eg see below my latest Greyhound automation, which shows a very typical pattern of decline as soon as I increase stakes beyond nominal.

Picture4.png

When you say you increased stakes to £1.50, do you mean that literally or do you mean they went up 50%?

[jamesedwards]

....But then fear the bank wouldn't grow and I wouldn't be a be to increase my stakes to progress.

One other thing, never underestimate the impact of stake on your ROI%. Something that makes a good return at £1 stakes can easily completely collapse at £2 stakes.

eg see below my latest Greyhound automation, which shows a very typical pattern of decline as soon as I increase stakes beyond nominal.

Picture4.png

When you say you increased stakes to £1.50, do you mean that literally or do you mean they went up 50%?

Literally £1 → £1.50. I still haven't done anything further with this other than leave it running in the background. I think I will try upping to £1.50 stakes again just in case the drop last time was an anomaly. Let's see what happens...

[Derek27]

One other thing, never underestimate the impact of stake on your ROI%. Something that makes a good return at £1 stakes can easily completely collapse at £2 stakes.

eg see below my latest Greyhound automation, which shows a very typical pattern of decline as soon as I increase stakes beyond nominal.

Picture4.png

When you say you increased stakes to £1.50, do you mean that literally or do you mean they went up 50%?

Literally £1 → £1.50. I still haven't done anything further with this other than leave it running in the background. I think I will try upping to £1.50 stakes again just in case the drop last time was an anomaly. Let's see what happens...

That really is surprising. I don't do greyhounds but I imagined you'd have to get up to double figures on low-liquid markets for a drastic difference in results.

[jamesedwards]

When you say you increased stakes to £1.50, do you mean that literally or do you mean they went up 50%?

Literally £1 → £1.50. I still haven't done anything further with this other than leave it running in the background. I think I will try upping to £1.50 stakes again just in case the drop last time was an anomaly. Let's see what happens...

That really is surprising. I don't do greyhounds but I imagined you'd have to get up to double figures on low-liquid markets for a drastic difference in results.

I've seen the same thing many times in the past when I've tried building commission churning football and greyhound bots. ROI% always plummets on even marginal stake increases. Probably a factor of the methods I use to try and extract value.

[iambic_pentameter]

Evening guys,

I was wondering if anybody could give some advice on the best or most efficient way to build a bank up. After a long 9 years of trading on and off both pre off and now mainly inplay, I am seeing regular profits. But unfortunately the company I used to work for went bust in November so I would like to give this a good crack but would need to withdraw most of the winnings to live on, pay bills etc. But then fear the bank wouldn't grow and I wouldn't be a be to increase my stakes to progress. I was thinking of withdrawing 90% of profits each day and leave the other 10% to grow the bank. How has everybody else built their bank? Thanks in advance

Some good answers here and my advice would be to perhaps see if you could get some freelance / self-employed work based on what you did with your previous company. That way, you will have enough time to trade alongside that. Obviously register with HMRC for that income if you go down that route.

I'm not full time nor do I have any desire to go full time (how I've matured!) but it might be worth having a main trading bank and split that bank into chunks and only keep what you need in Betfair, plus at least 12 months of living costs in the bank and an emergency fund as well.

That might sound overly cautious but the worst thing you could do, is to start to put yourself under pressure financially and then start to trade erratically.

Iambic

[jamesedwards]

One other thing, never underestimate the impact of stake on your ROI%. Something that makes a good return at £1 stakes can easily completely collapse at £2 stakes.

eg see below my latest Greyhound automation, which shows a very typical pattern of decline as soon as I increase stakes beyond nominal.

Picture4.png

When you say you increased stakes to £1.50, do you mean that literally or do you mean they went up 50%?

Literally £1 → £1.50. I still haven't done anything further with this other than leave it running in the background. I think I will try upping to £1.50 stakes again just in case the drop last time was an anomaly. Let's see what happens...

Didn't take long. At slightly higher stake I gave back 10% of my month's profit in 3 hours. Uncanny, huh?

Picture6.PNG

[The Silk Run]

I agree with you James on the increase in stakes and the subsequent variance !!!
I have tested this to with similar results on the same market, Greyhounds.

I have ran 4 instances for almost four years now with 0.10p stakes churning day in, day out without any anomalies. Small returns, but profit nonetheless.

Back on topic which is very interesting, with likewise responses. I started with a bank of GBP 100.00, and my parents gave me the money as I was a student at the time.

[Kai]

I was a student at the time.

Love this transition. From student to student of the market Technically still a student, no?

[The Silk Run]

I was a student at the time.

Love this transition. From student to student of the market Technically still a student, no?

I think we are all students of life !!! Always learning ....

[Kai]

To get back on topic for those that are building their banks it is definitely not an initial requirement, for whatever reason it's one of the most common questions I've seen. You don't need to prepare large banks to start trading as it's that much easier to lose them and crank up the pressure, you can build them through trading, although it does help to have a large emotional bank

In other words if you can mentally survive the markets then the banks should survive as well. To simplify things to do extreme those are your only two jobs I think:

1. Survive (don't fall apart)
2. Thrive (find an edge)

But, IMHO shouldn't underestimate pressure (!), even world class athletes regularly crumble under it. So when already managing risk it only feels logical to try and manage pressure as well. A big loss hits very different under immense pressure and can take out a large chunk out of your emotional bank, compared to a big loss in a low-pressure environment. Not saying anyone should trade in "zero gravity" since a healthy balance is not a bad thing, but people often invite too much unnecessary pressure on top, which depletes their emotional bank that much quicker, if that makes sense, at which point they start doing stupid things.

Eh, in an ideal world you could throw in managing expectations as well, but very little chance anyone new can do this properly. Mine were miles off as well