Good thread!
I came from a very ordinary background and my immediate family had always lived and worked locally. Made friends with a guy at school whose Dad had a Commodore PET. I would spend hours with him messing around on it and asked my Dad if I could get a Sinclair ZX80.
On getting my computer I set about a project to analyse football scores and was hooked for some reason. So my first proper job was working for a software distributor. I didn't really have a very impressive set of exam results so I went back to college part time to get better qualifications.
After using my analysis to win, with a bit of luck, a decent chunk of money on the football pools, I looked at Gambling markets, but the bookies edge was too big to overturn. So I started trading / investing on financial markets. I paper traded from 1985 to 1987 when the market crash told me I had much to learn, so I re-started in 1990. I dabbled with loads of different investing and trading styles but while on a business trip in 1994 to Houston I learnt all about Warren Buffett and settled on a long term investing style and abandoned short term trading on financials.
Wind forward 5 years and I realised I'd never be happy unless I was working for myself. I'd gradually worked my way into more senior roles in tech companies, but it was frustrating not being able to live and die by my own decisions, I was always beholden to someone else. So I'd been keen on working really hard on outside interests in an attempt to break out of the corporate world. I had planned to work in financial markets but when I discovered betting exchanges I immediately saw an opportunity (though liquidity just didn't exist back then).
When I quit my well paid job with three young children, everybody thought I had gone completely mad. Especially as I didn't really have a defined plan for what I was going to do. But I knew if I didn't jump first I probably never would. You can plan forever but you can't eliminate risk. So I put pressure on myself to make, something, work.
I had a few ideas about betting exchanges, which were in their infancy back then, and the rest, as they say, is history. I'd say that for most of my career, pretty much nobody including my immediate family believed that I was actually doing what I told them. It would often frustrate me in the past, but I don't really care any longer. Lets just say that ignorance is not bliss!
I started from the same point as everybody, in fact lot worse. I had no advice, no structure, no bloody idea what to do but through a process of trial and error and careful analysis I slowly worked out a clear path forward. From there I just pushed it to it's limits. I never anticipated just what I could achieve. It's given me a lot of confidence but also taught me some key lessons.
I'd say I have changed a lot over the years. When I was younger, I used to be more conservative, logical and risk averse. But now I am happier to trust my instinct, take risk and accept failure. One of the key lessons I learnt is that good things and things are equally distributed. So if you have a positive attitude you often spot opportunities that others don't. If you actively work to find these and do your best to limit obvious errors it will work, not just in trading but in all walks of life. You are not looking to be right all the time just right on average. Set backs, cock ups and losses are normal, you just need to accept them and not let them eat into your consciousness.
Curiously my experience on Betfair also taught me how to trade short term financial markets. When I had tried before I had made a complete mess of it and just couldn't make it work. Now I find it quite easy because I understand the nature of markets and the intrinsic way in which they work and I also have a detailed understanding of risk. I also have a nice framework for tackling new problems and actually enjoy regularly getting a new challenge. Long may it continue!
How does your background influence your trading?
Interesting to hear everyone's background. I've loved betting from an early age - ever since I used to go greyhound racing with my dad at 6 years old. But I was always interested in the mathemetical side and it was a revelation when I discovered Phil Bull's 'The Mathematics of Betting'. This will appear pretty basic stuff on probability theory these days; but it encouraged me to look for an edge where the odds were in my favour. I often tell people that I don't bet horses, I bet odds - and, given the right odds, I'd bet any horse in a race. But it it took the advent of the Betting Exchanges before I started making regular profits. I often look back nostalgically to the early years, when it seemed so easy to make money. The spread firms also offered great opportunities before they tightened their acts up. Someone should write a thesis about how the exchange markets have evolved over the years, becoming more and more efficient. Eventually I lost my edge and it was an expensive lesson, as it took me some time to realise it. Ever since then I've sought to find another one - but although there have been occasions where I thought I'd achieved it, they have never lasted. I tried scalping - naively thinking it would be easy. It's not! I also took the decision that I'm temperamentally unsuited to this form of gambling. I still need the adrenalin rush of the occasional big price winner and so concentrate on finding horses that I feel are over-priced. It's early days on my latest attempt - but if it fails, I always seem able to think up another angle! Regarding my background, I have an ordinary degree in mathematics and spent most of my career as a management accountant and latterly as an analyst. Most days of my life, you will find me immersed in a spreadsheet!
-
superfrank
- Posts: 2762
- Joined: Fri Aug 14, 2009 8:28 pm
Euler,
Re your short-term financial trading, can i ask what markets you are trading, what timeframes, and who with?
Frank.
Re your short-term financial trading, can i ask what markets you are trading, what timeframes, and who with?
Frank.
I tend to do equities and indexes, but I'm also into options. All US and through a variety of brokers, I work with two other guys who are US based on the simlar/same positions. I have to say that my long term stuff has always outperformed the short term stuff, but I'm always fiddling with new stuff in an effort to broaden my skill set.
It was the understanding of volatility that led me to the door of a new way to short term trade on financials. So I am in an out of the market all the time on a frequent basis. It was understanding the relationship between, trade margin, volatility and transaction costs that led me to the door of a strategy I could pursue in financials. I know what upside I need so I sit and wait for an opportunity and then let volatility work it's magic.
It was the understanding of volatility that led me to the door of a new way to short term trade on financials. So I am in an out of the market all the time on a frequent basis. It was understanding the relationship between, trade margin, volatility and transaction costs that led me to the door of a strategy I could pursue in financials. I know what upside I need so I sit and wait for an opportunity and then let volatility work it's magic.
-
giulio2010
- Posts: 962
- Joined: Sun Sep 12, 2010 9:11 am
In Italy when I was a child I could go to the bar and play the coupon for my father. Sometimes I played my own moeny when I was 8-9 years old. There was a very popular competition where you had to guess the results of 12 out 13 football games to win money or 13 of 13 to get the jackpot. Bets did not exist or were illegal back then. When I was 9-10 years old I spent hours on the night to develop systems for this contest. Then when elaborated the right one I went to my grandmother every weekend and she gave me 15.800 LIRE (5 pounds) to play my systems. From thirteen years of age I won sometimes with 12 results. My grandmother used to gave me almost everything since the money was hers but she is a very generous grandmother. In nine years won almost 5 million lire (1600pounds) then the breakthrough at 22 years old, it was the year before Diana was killed ... I was at wedding all day but when i came back home I have Realized I made 13 out 13 .. I was very young and scared. . If the local would find out I would have lost it all so I have waited one year and left my country saying I was going to study in a foreign country. All my friends now know why I left 
. Isn't dangerous anymore as It used to be.. Since then I find the way to bet on single events but without major success, and trading did not help either because of my background. When I have almost run out all my resources by chance I have met my mentor Which had been out of the country as well and decided to meet as we had quite few things in common .. We have met in Betfair.poker.room chat as she was waiting for a night event ... Since then I can say I feel like when I was a kid and started to gain some results again since 1996...
P.S. I have just found a sample...
. Isn't dangerous anymore as It used to be.. Since then I find the way to bet on single events but without major success, and trading did not help either because of my background. When I have almost run out all my resources by chance I have met my mentor Which had been out of the country as well and decided to meet as we had quite few things in common .. We have met in Betfair.poker.room chat as she was waiting for a night event ... Since then I can say I feel like when I was a kid and started to gain some results again since 1996... P.S. I have just found a sample...
You do not have the required permissions to view the files attached to this post.
Do you find that trading financials overcomes the liquidity barrier problem you have on Betfair, allowing for much greater earnings?
Jeff
Jeff
Euler wrote: It was the understanding of volatility that led me to the door of a new way to short term trade on financials.
Ok then. I get it I am the only one on here that has absolutely no background whatsoever that could possibly help me with this trading lark 
No wonder I am finding it so hard 
The only thing that may help is getting my business to a success took lots of very hard work so I aint no quitter. Very interesting thread though, whats the next thread then
No wonder I am finding it so hard The only thing that may help is getting my business to a success took lots of very hard work so I aint no quitter. Very interesting thread though, whats the next thread then 
Malcolm Gladwell is my favourite author.
I've read every book and article he has published. He helps challenge what you might otherwise think about any particular problem and make you think about it in a different way. You might disagree with Malcolm, buy you'll start thinking about the problem in a different way.
In his book Outliers - Malcolm talks about the 10,000 hour rule. Essentially this rule says if you want to be really, really good at something, you will need to invest about 10,000 hours at that activity. See in particular Euler, JG, Mugsgame et al.
But, the other thing, in addition to investing 10,000 hours is opportunity. The conditions must be right. Bill Gates went to the same school as Paul Allen - they are both computer geniuses. Bill's parents were upper middle class. His mother held afternoon tea parties at their house to fund Bill and Paul's class connecting to the only main frame computer in that part of the country at that time. Sure, Bill and Paul worked hard and were extremely talented. While those were necessary they weren't sufficient conditions for success. What was also needed was opportunity (funding from his mum, a super computer nearby for them to learn on, a school where a teacher tought computer science etc etc).
If Bill Gates was born in Glasgow or Perth or Mumbai or Pittsburgh then there is no Microsoft.
For those interested in a short passage on opportunity and the 10,000 hour rule see http://www.gladwell.com/outliers/outliers_excerpt1.html
Applying this to Betfair. Only certain people will ever put in the time (10,000 hours) to master trading and making money from betfair beyond trading. And for some the opportunity will not be there. Some of those who reaped the most were there in the exchange infancy when all sorts of anomalies arose and could be exploited for profit. The market always changes and those who follow it closely with their 10,000 hours plus experience are best placed to keep profiting.
Can a newbie profit. Maybe, but long term, skills need to be acquired and that might take 10,000 hours to get to be "a master". Don't believe me, read the book. Certainly it took 10,000 hours for me to get to the top of my chosen profession.
I've read every book and article he has published. He helps challenge what you might otherwise think about any particular problem and make you think about it in a different way. You might disagree with Malcolm, buy you'll start thinking about the problem in a different way.
In his book Outliers - Malcolm talks about the 10,000 hour rule. Essentially this rule says if you want to be really, really good at something, you will need to invest about 10,000 hours at that activity. See in particular Euler, JG, Mugsgame et al.
But, the other thing, in addition to investing 10,000 hours is opportunity. The conditions must be right. Bill Gates went to the same school as Paul Allen - they are both computer geniuses. Bill's parents were upper middle class. His mother held afternoon tea parties at their house to fund Bill and Paul's class connecting to the only main frame computer in that part of the country at that time. Sure, Bill and Paul worked hard and were extremely talented. While those were necessary they weren't sufficient conditions for success. What was also needed was opportunity (funding from his mum, a super computer nearby for them to learn on, a school where a teacher tought computer science etc etc).
If Bill Gates was born in Glasgow or Perth or Mumbai or Pittsburgh then there is no Microsoft.
For those interested in a short passage on opportunity and the 10,000 hour rule see http://www.gladwell.com/outliers/outliers_excerpt1.html
Applying this to Betfair. Only certain people will ever put in the time (10,000 hours) to master trading and making money from betfair beyond trading. And for some the opportunity will not be there. Some of those who reaped the most were there in the exchange infancy when all sorts of anomalies arose and could be exploited for profit. The market always changes and those who follow it closely with their 10,000 hours plus experience are best placed to keep profiting.
Can a newbie profit. Maybe, but long term, skills need to be acquired and that might take 10,000 hours to get to be "a master". Don't believe me, read the book. Certainly it took 10,000 hours for me to get to the top of my chosen profession.
Investment product lawyer. At the risk of being ridiculed, I put together lots of structured products. Of course, no one invests in much of that any more, so it's been tougher since 2008. Started in 1993. So certainly well beyond 10,000 hours (which is about five years work for a busy lawyer).
I know this is going a bit off topic, but did you sense that, prior to what happened in 2008, your clients were aware of the risks posed by those products?
Jeff
Jeff
gazuty wrote:Investment product lawyer. At the risk of being ridiculed, I put together lots of structured products. Of course, no one invests in much of that any more, so it's been tougher since 2008.
Hi Ggazuty wrote:Malcolm Gladwell is my favourite author.....
There is a link about bounce here:-
viewtopic.php?f=2&t=4153
Within it is a link to a real life study that is worth a read..
Gladwell's books are very thought provoking; I posted on here the other day about how you can get an instinctive feel for the markets early in the day, one member (Hogden) mentioned that he can get a feel just by looking at the markets
Regards
Peter
Thanks Peter, looks a very interesting thread. Will read in detail.
On Jeff's question. I guess it was in 1994 or 1995 we switched over from a mainframe computer to windows. And in an early version of microsoft word you could get it to do a calculation of reading literacy required to understand the document. The document was an investment prospectus I had written. I still remember, the reading literacy required 5 years of tertiary education. And this was a product for the person in the street.
Then i remember in 1997, working on a big corporate restructure. My own mother threw the documents away when she received them as a shareholder in the mail, thinking they were marketing junk.
So for a long time I knew the investors didn't understand.
Before 2008, I thought some people in the investment world themselves were really smart. Post 2008, I keep thinking about this article I read in 2002, again from Malcolm Gladwell. http://www.gladwell.com/2002/2002_04_29_a_blowingup.htm
What I've realised is that many people are "salesmen". Most are genuine, but still just salesmen drinking their own cool aid. They believe, but have no idea about risk.
On Jeff's question. I guess it was in 1994 or 1995 we switched over from a mainframe computer to windows. And in an early version of microsoft word you could get it to do a calculation of reading literacy required to understand the document. The document was an investment prospectus I had written. I still remember, the reading literacy required 5 years of tertiary education. And this was a product for the person in the street.
Then i remember in 1997, working on a big corporate restructure. My own mother threw the documents away when she received them as a shareholder in the mail, thinking they were marketing junk.
So for a long time I knew the investors didn't understand.
Before 2008, I thought some people in the investment world themselves were really smart. Post 2008, I keep thinking about this article I read in 2002, again from Malcolm Gladwell. http://www.gladwell.com/2002/2002_04_29_a_blowingup.htm
What I've realised is that many people are "salesmen". Most are genuine, but still just salesmen drinking their own cool aid. They believe, but have no idea about risk.
Thanks for your reply Gazuty.
As an aside, I like this quote from Taleb in that article:
'For when he looked around him, at the books and the tennis court and the folk art on the walls -- when he contemplated the countless millions that Niederhoffer had made over the years -- he could not escape the thought that it might all have been the result of sheer, dumb luck.'
I think it behooves all traders and gamblers to ask themselves whether the success they have achieved could be due to sheer dumb luck, and whether it could disappear if the market fundamentals change or when a few outliers in a row come along...
Jeff
As an aside, I like this quote from Taleb in that article:
'For when he looked around him, at the books and the tennis court and the folk art on the walls -- when he contemplated the countless millions that Niederhoffer had made over the years -- he could not escape the thought that it might all have been the result of sheer, dumb luck.'
I think it behooves all traders and gamblers to ask themselves whether the success they have achieved could be due to sheer dumb luck, and whether it could disappear if the market fundamentals change or when a few outliers in a row come along...
Jeff