Cutting losses
LeTiss 4pm wrote:YesFerru123 wrote:Does anyone here actually regularly risk losing £90+ per trade on a regular basis (apart from Euler), out of interest?
Jeff
I know someone who uses a £12,500 bankroll i think Adam Todd used one aswell he tells you in his blog what his stop loss wasOn some of the football markets, I use 4 figure sums pre off, where one tick against you could be risking 100. (I have only used 5 figures once and I felt like I had had 20 cups of coffee, so stopped doing that!)Ferru123 wrote:Does anyone here actually regularly risk losing £90+ per trade on a regular basis (apart from Euler), out of interest?
Jeff
Although there is the potential to lose that, as i get into the market early and know I'm near the front of the queue I dont feel at risk as I know I can (and often do) scratch the trade..
Regards
Peter
I know someone who uses a £12,500 bankroll i think Adam Todd used one aswell he tells you in his blog what his stop loss was
A favourite phrase of Adam's was borrowed from Abraham Lincoln who said, " I may only walk slowly but I never walk backwards!"
Although there is the potential to lose that, as i get into the market early and know I'm near the front of the queue I don't feel at risk as I know I can (and often do) scratch the trade..
Regards
Peter
I've seem the term scratching a trade but am not certain whether it is ..a..putting a closing trade in one click above or below and so losing a little bit of money,..or..b..putting the closing trade at the same price so as to not win or lose any money (in which case the market hasn't yet moved in either direction).
Regards
Peter
I've seem the term scratching a trade but am not certain whether it is ..a..putting a closing trade in one click above or below and so losing a little bit of money,..or..b..putting the closing trade at the same price so as to not win or lose any money (in which case the market hasn't yet moved in either direction).
Hi
Say for instance that I had put a lay bet into the draw market on a football match at say 3.5
I would wait for the money to come down to start to nibble away at my bet. That would be fine (Normally I would have an offset with batches command too - check it out in the user guide)
If however, the whole lot went in one go
, I would quickly put a back bet in at 3.5, thus scratching it ie neutral.
Regards
Peter
PS Jim - I like that saying! I might use that with my manager!
Say for instance that I had put a lay bet into the draw market on a football match at say 3.5
I would wait for the money to come down to start to nibble away at my bet. That would be fine (Normally I would have an offset with batches command too - check it out in the user guide)
If however, the whole lot went in one go
, I would quickly put a back bet in at 3.5, thus scratching it ie neutral.Regards
Peter
PS Jim - I like that saying! I might use that with my manager!
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giulio2010
- Posts: 962
- Joined: Sun Sep 12, 2010 9:11 am
In football market I never have problems to cut my losses, I know exactly what to do and how much risk i put on each selected market. Bare in mind that before approaching a market I study the odds for very long time. By doing this I can average 3 ticks loss at the max. In horses, lets say I back 1000 on the favorite and suddenly out of the blue the price spike 10-15 ticks away from me, sometimes the price come back within 10-15 seconds and sometimes goes even further. If I layed the horse, I have some instict to quickly recover my loss and sometimes I turn it into profit before the event start, but when the odds spike in reverse ( i backed the horse) I get ipnotized.
I remain mesmerized for too long to respond. Sometimes I can not even move my self from the chair and poor myself a glass of water. It 's a strange feeling like the sleeping disorder. Do you know when people talk about possession or abduction by aliens in their sleep, well that is called sleeping disorder and I feel exactly that way when I back a horse and at the same time there is massive spike. There are types of spikes that effect my trading:
The mad bomber, I actually make money out it.
the instantaneous collapse of the market, the odds usually come back where they were before.
The suspicious Spike, it's like some1 on the race course knows for sure that the horse will lose. This last one is where i lose most and I can't decide what to do ... It's not easy to decide whether to close or not because like I said, quite often the odds come back. If the odds come back I lose nothing, if the odds won't come back I lose 30-40 insted on an early cut of 20 loss but if I cut my losses on both scenarios I lose 20 on each spike which is the same of losing 40 on 50% of the spikes and 0 on the other 50% of the spikes. If I feel like that those spikes can damage seriously my bank I stop trading even if it was on the 1st race of the day!!
I remain mesmerized for too long to respond. Sometimes I can not even move my self from the chair and poor myself a glass of water. It 's a strange feeling like the sleeping disorder. Do you know when people talk about possession or abduction by aliens in their sleep, well that is called sleeping disorder and I feel exactly that way when I back a horse and at the same time there is massive spike. There are types of spikes that effect my trading:
The mad bomber, I actually make money out it.
the instantaneous collapse of the market, the odds usually come back where they were before.
The suspicious Spike, it's like some1 on the race course knows for sure that the horse will lose. This last one is where i lose most and I can't decide what to do ... It's not easy to decide whether to close or not because like I said, quite often the odds come back. If the odds come back I lose nothing, if the odds won't come back I lose 30-40 insted on an early cut of 20 loss but if I cut my losses on both scenarios I lose 20 on each spike which is the same of losing 40 on 50% of the spikes and 0 on the other 50% of the spikes. If I feel like that those spikes can damage seriously my bank I stop trading even if it was on the 1st race of the day!!
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Mr Undercover
- Posts: 226
- Joined: Thu Nov 03, 2011 7:22 pm
I think someone has already made the reference but here is Adam T's gospel on the topic.
http://www.punterprofits.com/horse-raci ... raders.php
Holding onto a lossing position is often recipe for disaster, all the professional seem to say have a threshold at which you get out either a % of pot e.g. never accept a loss of more than 10% of total pot or look at it from the perspective of number of negative ticks.
A lot comes down to experience and information, sometimes you can learn to read a situation, and pattern of money as it exchanges, how much resistance is there on the opposing side, are other horses moving to take up the slack, how permanent does the move feel so how likely is it to rebound... you can get a feel for these things if you watches 100s of trades. You can't always be right however so in my opinion you need an 'amber' and 'red' point of resistance. Red is the emergency "get out now" button at all costs, never cross that threshold, 'amber' is the assess and don't blink if 30secs no improvement get out.
http://www.punterprofits.com/horse-raci ... raders.php
Holding onto a lossing position is often recipe for disaster, all the professional seem to say have a threshold at which you get out either a % of pot e.g. never accept a loss of more than 10% of total pot or look at it from the perspective of number of negative ticks.
A lot comes down to experience and information, sometimes you can learn to read a situation, and pattern of money as it exchanges, how much resistance is there on the opposing side, are other horses moving to take up the slack, how permanent does the move feel so how likely is it to rebound... you can get a feel for these things if you watches 100s of trades. You can't always be right however so in my opinion you need an 'amber' and 'red' point of resistance. Red is the emergency "get out now" button at all costs, never cross that threshold, 'amber' is the assess and don't blink if 30secs no improvement get out.
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Groovyelms
- Posts: 277
- Joined: Fri May 20, 2011 7:42 am
Tnx Mr Undercover good link from a past master of the Ladder...
"think someone has already made the reference but here is Adam T's gospel on the topic.
http://www.punterprofits.com/horse-raci ... raders.php"
"think someone has already made the reference but here is Adam T's gospel on the topic.
http://www.punterprofits.com/horse-raci ... raders.php"
It is at this point traders get married to the trade,giulio2010 wrote:In football market I never have problems to cut my losses, I know exactly what to do and how much risk i put on each selected market. Bare in mind that before approaching a market I study the odds for very long time. By doing this I can average 3 ticks loss at the max. In horses, lets say I back 1000 on the favorite and suddenly out of the blue the price spike 10-15 ticks away from me, sometimes the price come back within 10-15 seconds and sometimes goes even further.
you should of closed out imediatley and moved on, there are some market manipulators out there bookies laying of liabilities etc ,but we cannot do anything about that, sometimes am on the right side of those manipulations, if you are on the wrong side hey life go,s on more trades out there
Dont get married to the spike divorce it and take a hike to the next market
G all this sounds like is that your mindset to trading is in reverse, if you were to turn it around then you would be able to poor that water no matter where you are in the room. You sound like you are connected to the bankroll to much and it musnt take a dip. My bankroll i treat like its locked in a garage, i only check on it if there has been a disaster like Betfair locking us all in with a crash, other than that i only am interested in TURNOVER at the end of the week. I dont care if i have 40 losses while i have been trading it is where you cut them is what matters and as long as my turnover is there i know i will collect what i need to transfer at the end of 30 days.giulio2010 wrote: I get ipnotized.
I remain mesmerized for too long to respond. Sometimes I can not even move my self from the chair and poor myself a glass of water. It 's a strange feeling like the sleeping disorder. Do you know when people talk about possession or abduction by aliens in their sleep, well that is called sleeping disorder and I feel exactly that way when I back a horse and at the same time there is massive spike. There are types of spikes that effect my trading:
The mad bomber, I actually make money out it.
the instantaneous collapse of the market, the odds usually come back where they were before.
The suspicious Spike, it's like some1 on the race course knows for sure that the horse will lose. This last one is where i lose most and I can't decide what to do ... It's not easy to decide whether to close or not because like I said, quite often the odds come back. If the odds come back I lose nothing, if the odds won't come back I lose 30-40 insted on an early cut of 20 loss but if I cut my losses on both scenarios I lose 20 on each spike which is the same of losing 40 on 50% of the spikes and 0 on the other 50% of the spikes. If I feel like that those spikes can damage seriously my bank I stop trading even if it was on the 1st race of the day!!
1 Disconnect from your bankroll (you have invested that money to trade so technically its spent)
2 Dont borrow money to trade big no no (this puts a terrible mental preasure on ones trading descions)
3 Work on a 1/2 ratio at least. (Lose 1 to gain 2) i try for 1/3 that way losses dont mean anything mentally
4 I thank Peter,s wonderful course 3 years ago because all the bits i took from it have now all fitted in and that is how long its taken me to obtain the mindset.
I wish you good luck in cutting them short
I think that allot of people completely over complicate trading ,
it really isn't rocket science you know
,
Trust me, it carn't be if i can do it
Cutting losses is important yes, but then again so is maximising profits, you would be amazed the amount of times people panic and bail out of a perfect good trade with a 3 tick profit when they should have had 10. This will kill you too long term if not addressed.
imo you should never be in a position that one bad trade ruins your day,
10 + tick losses will and do happen, they can not be avoided, but such a loss should not be the end of the world, even if your a scalper and certainly not if you go in for the longer trades.
it really isn't rocket science you know
,Trust me, it carn't be if i can do it
Cutting losses is important yes, but then again so is maximising profits, you would be amazed the amount of times people panic and bail out of a perfect good trade with a 3 tick profit when they should have had 10. This will kill you too long term if not addressed.
imo you should never be in a position that one bad trade ruins your day,
10 + tick losses will and do happen, they can not be avoided, but such a loss should not be the end of the world, even if your a scalper and certainly not if you go in for the longer trades.
Quite right Freddy.
Most novices look for complex reasons why their trade went against them and some refuse to accept that it was due to circumstances beyond their control...or outside their line of vision.
It isn't often that 2 threads appear that are synonymous but since they are both by the same author, it should come as no surprise. Take a look at how prices are a law unto themselves "What Do Prices "Know" That You Don't?"
viewtopic.php?f=36&t=7439
No single person has ALL the information about any one horse, least of all the trader and, as the VT says, "price is knowledge". No matter how compelling the logic that dictates that a horses odds should move in one direction there are always forces at work that will cause the odds to go in the opposite direction. Accept this as a measure of unpredictability and you cannot fail to see the necessity of stop losses.
By entering a trade as either a back or a lay bet you are, de facto, intending to profit from the direction you have "chosen". Backing a horse in a trade means that you are committing to a downward movement in the odds and laying first is demonstrating a conviction that the odds will rise.
The need for a Stop arises because, even though your logic may be sound, prices will often/sometimes go opposite to the way you expect. There are 3 variations why this is so.
Firstly, the spike. Most experienced traders benefit from the "spike" (mad bomber not excluded) whereas inexperienced traders can more often be trading in the wrong direction. Nevertheless even the most experienced trader can be hit with an unexpected loss and whilst the brave hang on for some retracement, there is no correct place to exit since a loss is a loss. Accept it and move on.
Secondly, the reversal. You may be lucky to have been party to the TV pictures showing your horse sweating badly under the sadddle and have exited your back to lay trade, or you may just have to expect an irrational reversal at any stage in your trade for reasons that are simply not obvious to you. For every trader, money management (the correct balancing of %age win rate/gains/losses) is how you survive in overall profit when the unexpected happens. Scalpers who profit by 1-2 ticks necessarily have a tighter stop loss than trend traders who can afford a greater leeway, even if that leeway is sometimes technically incorrect. If the odds reverse then it is wrong/dangerous to stay in the trade whether its though laziness, irrational belief that the reversal is temporary or by simply falling asleep at the wheel.
Finally, Noise. Noise complicates trading for the novice and until you gain understanding how volatility affects "noise", it is foolish to use stakes beyond the minimum. Most markets exhibit noise as the odds move (usually 1-3 ticks) constantly in wave patterns without actually breaking out of a tight band. Irrespective of your trading style, noise bands need to be ignored for the purpose of establishing sensible stops. In highly volatile markets scalping is an art form that takes years to perfect.
If PRICE contains ALL the data that is necessary to drive movement, then however strong your conviction that you are trading in the right direction (or that the odds will eventually conform to your will), you are destined to fail unless your management plan includes not just a willingness but an expectation that you will often have to deploy an appropriate stop loss.
PS Adams Post is a "must read" for newbies.
http://www.punterprofits.com/horse-raci ... raders.php
Most novices look for complex reasons why their trade went against them and some refuse to accept that it was due to circumstances beyond their control...or outside their line of vision.
It isn't often that 2 threads appear that are synonymous but since they are both by the same author, it should come as no surprise. Take a look at how prices are a law unto themselves "What Do Prices "Know" That You Don't?"
viewtopic.php?f=36&t=7439
No single person has ALL the information about any one horse, least of all the trader and, as the VT says, "price is knowledge". No matter how compelling the logic that dictates that a horses odds should move in one direction there are always forces at work that will cause the odds to go in the opposite direction. Accept this as a measure of unpredictability and you cannot fail to see the necessity of stop losses.
By entering a trade as either a back or a lay bet you are, de facto, intending to profit from the direction you have "chosen". Backing a horse in a trade means that you are committing to a downward movement in the odds and laying first is demonstrating a conviction that the odds will rise.
The need for a Stop arises because, even though your logic may be sound, prices will often/sometimes go opposite to the way you expect. There are 3 variations why this is so.
Firstly, the spike. Most experienced traders benefit from the "spike" (mad bomber not excluded) whereas inexperienced traders can more often be trading in the wrong direction. Nevertheless even the most experienced trader can be hit with an unexpected loss and whilst the brave hang on for some retracement, there is no correct place to exit since a loss is a loss. Accept it and move on.
Secondly, the reversal. You may be lucky to have been party to the TV pictures showing your horse sweating badly under the sadddle and have exited your back to lay trade, or you may just have to expect an irrational reversal at any stage in your trade for reasons that are simply not obvious to you. For every trader, money management (the correct balancing of %age win rate/gains/losses) is how you survive in overall profit when the unexpected happens. Scalpers who profit by 1-2 ticks necessarily have a tighter stop loss than trend traders who can afford a greater leeway, even if that leeway is sometimes technically incorrect. If the odds reverse then it is wrong/dangerous to stay in the trade whether its though laziness, irrational belief that the reversal is temporary or by simply falling asleep at the wheel.
Finally, Noise. Noise complicates trading for the novice and until you gain understanding how volatility affects "noise", it is foolish to use stakes beyond the minimum. Most markets exhibit noise as the odds move (usually 1-3 ticks) constantly in wave patterns without actually breaking out of a tight band. Irrespective of your trading style, noise bands need to be ignored for the purpose of establishing sensible stops. In highly volatile markets scalping is an art form that takes years to perfect.
If PRICE contains ALL the data that is necessary to drive movement, then however strong your conviction that you are trading in the right direction (or that the odds will eventually conform to your will), you are destined to fail unless your management plan includes not just a willingness but an expectation that you will often have to deploy an appropriate stop loss.
PS Adams Post is a "must read" for newbies.
http://www.punterprofits.com/horse-raci ... raders.php