Nobody is perfect
You know what, nobody is perfect. You are either a liar or perfect, and nobody is perfect.
We all get emotional, we all defend our views and our patch of turf vigorously, sometimes errantly! But when I started Betfair trading twenty years ago, I wanted to achieve something really special. So each morning I wake up, that’s my objective.
I think about what I can do today to nudge my activity to a new level. I think hard about what I, not others, are doing and how I can best improve my own performance.
Keeping the focus on that really makes a difference in the long term. Every tiny little increment adds up over time to much bigger improvements.
A simple idea
I started trading by accident. When I started on Betfair I did something that I knew worked, arbing.
I would scour bookmakers, sportsbooks, anywhere that would take my money and then hedge the position on Betfair. To cut a long story short, when I was welched by a bookmaker I figured there had to be a better way. My idea was to ‘arb’ on Betfair. Put two orders intot he market at different prices and wait for them to match.
To my astonishment, it worked and I suddenly realised I’d discovered something new and unique.
I also figured that other would discover this as well. So I’d better work on improving that strategy, one step at a time. Everything you see now had that starting point.
Everything I do now was a variation of that simple starting point.
Compound interest is the eighth wonder of the world
An oft-quoted phrase is that compound interest is the eighth wonder of the world. While this refers to its use with money, it’s applicable everywhere. Reinvesting can really deliver spectacular results.
As long as you keep a focus on core principles a tiny improvement soon compounds to something much bigger and that’s my philosophy with trading. Everybody is unique so keeping a focus on what you do and improving that will get your much further than you think.
Kaizen
Many years ago I was in a meeting when this concept was introduced to me. Kaizen, roughly speaking it’s Japanese for ‘Good change’.
I didn’t enjoy working for the MD of this particular company. He has just replaced somebody I respected and he immediately promoted somebody over me who really wasn’t very well suited to the role and was inexperienced. It wasn’t the fact he did this that annoyed me, it was the fact he didn’t talk to me about it or explain, he didn’t allow me to improve. It wasn’t much longer before I left the company.
The only snaffle of gain from his appointment was, ironically, learning about Kaizen. This MD encapsulated this principle in one word, so I am thankful for that. Sometimes you are not quite sure if you are doing the right thing, so it’s nice to get confirmation.
Wiki says “The Japanese word kaizen means “change for better”, with inherent meaning of either “continuous” or “philosophy” in Japanese dictionaries and in everyday use. The word refers to any improvement, one-time or continuous, large or small, in the same sense as the English word “improvement“.[5] ……. the word “kaizen” in English is typically applied to measures for implementing continuous improvement, especially those with a “Japanese philosophy”.
Don’t rest on your laurels
I’ve never rested on my laurels in anything I’ve done and I’ve always been self-critical and exploratory in my outlook.
This is simple to do.
When you fail at something you try and understand why and take corrective action. When you succeed you also put yourself under the magnifying glass to improve. Your learn in either direction and build on it. Over time you build a clearer and clearer picture. But you also take tiny steps forwards. Each step can be tiny on its own, but in aggregate it usually adds up to something much bigger.
Over time you can achieve stupendous things from quite simple starts, and that’s something I’ve achieved with Betfair Trading. Strategies that started with the simple process of trying to get two orders matched for £2 on the Betfair exchange, have expanded into a myriad of opportunties.
You can even see this princple in place for Bet Angel. For newbies all the features may seem a little overwhelming, but they all started at something more simple and have been expanded over time. They all exist for a reason and to expand your edge.
When you first do this, the improvement you see will not be obvious, but over long periods of time, it’s huge. This is also applicable to typically the way I trade. If you have seen me post P&L’s yes I get big results. But most of my money is small amounts over time. It’s less risky and more profitable in the long term than the manic whipsaw of big gains and big losses. Slow and steady wins the race!
That’s typically how I find all processes work, including trading. You start with something simple, build on it and modify it over time. If you don’t choose this path then, as in all competitive situations, you lose your edge over time as people who are actively trying to improve eventually move past you.
This is why it’s also important that the focus should be internal, not external. No amount of focusing on others will bring improvement, only focusing hard on being better delivers what Kaizen promises.
So that’s why I recommend you follow this, apparently Japanese, principle.