How to Improve your Sports Trading Results

Right now as we write this article we'll be shortly taking a well-deserved break from the sports markets, as activity on many of the sports wind down in preparation for the new year.

 

Of course, as an admission that we're addicted to sports trading, this won't be a total break as there will still be lots to trade on. Also we have some trading books to read and we will be taking time out to conduct a review of our 2013 performance and to plan for 2014.

 

We highly recommend that you do the same.

 

Don't get us wrong, reviewing your trading performance is not just a 'once a year' event.

 

We actually conduct different types of review after each trade, after each session, after each week and then again monthly. And we also complete a six monthly review, one of those being now, at the end of the calendar year.

 

While we will be reviewing our P&L figures and drilling right down into the stats such as winning percentage and win/loss size ratio for each of the setups, our biannual review is not so much about that stuff. That gets taken care of on a monthly basis.

 

The biannual review is really a chance to reflect on your results, your plan and your goals from a much higher level. And the best way to do that is...

 

ASK YOURSELF QUESTIONS!!!

 

We know, you'd rather us just give you the answers, but that's not how life or sports trading works. The real insights in life come from questioning what is happening and allowing your inner-mentor to provide the answer.

 

Ideally, the questions will also be customised to your needs. If you relax into the process you'll know the questions to ask. But to get you started, maybe some of the following questions will help provide you with an insight which will make 2012 your best year yet.

 

• Am I enjoying myself?
   
• Have I achieved my sports trading goals? Why? Why not?
   
• Are my sports trading goals still relevant?
   
• Is my sports trading plan current? Does it accurately reflect how I trade?
   
• What is the strongest part of my sports trading plan? What can I do to improve it?
   
• What is the weakest part of my sports trading plan? What can I do to improve it? What can I do to minimise the risk or impact?
   
• What is the area of my sports trading plan that I haven’t really developed to its fullest potential?
   
• Do I really know whether my plan provides a positive expectancy? How do I know?
   
• What is one thing I could do right now to improve my pre-trading preparation?
   
• What is one thing I could do right now to improve my identification of setups?
   
• What is one thing I could do right now to improve my entries?
   
• What is one thing I could do right now to improve my sports trade management?
   
• What is one thing I could do right now to improve my exits?
   
• What is one thing I could do right now to improve my post-trade review process?
   
• What is one thing I could do right now to improve my record keeping?
   
• What is one thing I could do right now to improve my longer term reviews (weekly, monthly, biannually)?
   
• What is one thing I could do right now to improve my discipline?
   
• What is one thing I could do right now to improve my consistency?
   
• What is one thing I could do right now to improve my sports trading psychology?
   
• What is one thing I could do right now to improve my money management?
   
• What is one thing I could do right now to improve my risk management?
   
• What do I fear most in my sports trading?
   
• What am I embarrassed to talk to others about when discussing my sports trading?
   
• What was the low point of the last six months? What will I do to prevent that reoccurring?
   
• What was the high point of the last six months? What will I do to ensure that repeats again in future?
   
• How do I plan to improve in coming months?
   
• What are my current life goals? What are my current sports trading goals.

 

It's that simple. Hopefully there's one or two in the list that you really related to. If not, you'll need to find your own question. Relax, and ask yourself, 'What is the most important question I need to ask myself to improve my sports trading?' Then let the question go. The answer will come when it's ready.

 

Here's hoping 2014 is the best year of your life so far!

For more information visit www.interactivesportsinvestor.com 

The 'Traffic Light' Risk Management Strategy

Would you like to discover a quick and simple risk management strategy that is easy to apply to any trading plan, and has the potential to vastly improve results? Excellent!

We are not talking about the placement of stop losses, which is what most people consider as ‘risk management’. Rather, this is a simple tool for managing the risk in your sports trading activities.

Effective sports trading requires focus and discipline. There are many external factors that can interrupt your focus, and destroy your discipline, such as:

• An unreliable internet connection
• Your sports trading software losing its signal or the betting exchange going down.
  
• A knock at the door
• The telephone ringing
• A baby crying
• Hunger
• Noticeably too hot or cold
• Fatigue (hopefully from late night sports trading study, rather than alcohol and party induced fatigue)

And as if that’s not enough, there are many internal factors that can also interrupt your focus, and destroy your discipline, leading you to make decisions and actions based on emotion, rather than following your documented trading plan. You’ve no doubt experienced some of these already. The internal factors would include things such as:

• Hesitation in entering once price triggers an entry
• Hesitation in exiting when price hits your stop loss
• Doubt about your entry after entering the trade
• Fear of exiting at your stop loss
• Worry about how you will explain another loss to your partner
• Any thought about an early exit of this trade, just to make up for earlier losses

There’s a whole lot more, but hopefully you get the point.

One flaw in many sports trading plans is the absence of a valid strategy for managing these risks. So, let’s fix that situation.

The problem is,sports traders have no guidelines as to:

• When the risk justifies us stopping our trading,
• When to just pause trading and manage the issue, or
• When to ignore it and continue trading.

The way we do this is using a very simple risk management strategy developed by Shell, a global group of energy and petrochemical companies. Obviously they didn’t create it for use in sports trading – we just find that it works really well in this environment.

What we need to do is firstly classify your current trading as being in a GREEN, AMBER or RED condition. Think of a set of traffic lights. GREEN indicates that everything is fine. This is the desired sports trading environment. RED is a compulsory STOP condition. And AMBER is a warning that you need to be prepared to stop.

What we’d like you to consider is documenting any RED conditions within your sports trading plan. This might include things like:

• An unreliable internet connection
• Your sports trading platform losing it’s signal (when you have no alternative)
• Fatigue due to less than six hours sleep the night before, or more than four consecutive nights with less than eight hours sleep (customise this for your own requirements)

These are mandatory STOP sports trading criteria. Alongside each of these risks you need to define the actions you will take. For example, how will you manage your software going down? If you’re a long term trader this might not cause too much stress and may actually be an AMBER rather than RED – your stops may be in the market and you probably have alternative software options. However if you’re a horse racing trader operating on small timeframes, this is clearly a RED criteria. You may choose to manage this by having direct contact by phone to the betting exchange operator you use and closing out all positions.

So, for each risk we define as a RED, we simply document a procedure to manage that situation. And when one of these conditions emerges while trading, we carry out our procedure, and then stop trading until the condition has gone.

Now, everything else that is not as serious as a RED, but can still influence our sports trading, is an AMBER. The problem here is, as mentioned before, when does it justify stopping, or when should we just continue with our sports trading?

The traffice light risk management strategy simply states that if you get three or more AMBER conditions then that is also an automatic stop. At that point you can either quit for the day and head for the golf course, or manage your AMBERs back to GREEN and resume trading.

So, if your baby is teething, and just won’t stop crying despite your partners attempts to comfort him/her, and you just suffered your second loss in a row, and you now find yourself hesitating at an entry trigger – that’s three AMBERs.

STOP TRADING!

Before you continue, make sure you manage your risk back into GREEN, or at least less than three AMBERs. Perhaps take a short break to review your two losses and confirm that the setups were valid, review your sports trading statistics to confirm that two losses in a row is a normal occurrence, and conduct a short relaxation and visualization session. If you’re braver than we are you might also ask your partner to take the baby out for a drive (ask nicely though!)

If you’re satisfied that you’ve now managed the situation back to less than three AMBERs, or ideally completely back to GREEN, then you’re right to start trading again. Otherwise, take the day off. Sometimes a ‘three AMBER’ complete break from sports trading is a wise move.

While we all hope that our sports trading will occur within a completely GREEN environment, life’s just not like that. The Traffice Light risk management strategy gives you a simple guideline for when enough is enough – and you need to either stop completely, or reduce some of the external or internal risks. Try it, and see if it helps in your sports trading as much as it does in ours.

It’s simple:

• GREEN is GO,
• AMBER is CAUTION and
• RED is STOP, but
• 3 AMBERs are equivalent to a RED. Stop trading, or manage those AMBERs back to GREEN.

Happy (hopefully GREEN) trading

Find out more at www.interactivesportsinvestor.com 

Boredom - The Road to Ruin!

I had planned an afternoon of trading tennis today and was all ready to go when the rain started in Gstaad so all the matches were delayed - hence no tennis now this afternoon.

This normally leads to me having a look around the Betfair markets for football or horse racing to trade but often because I hadn't planned to trade these markets I trade matches or races that I haven't really done the necessary amount of research on or even if I do my research the matches don't fit my criteria but I trade them anyway out of boredom or a misplaced sense of duty that I 'should' be trading. More often than not this leads to poor trading and losses and you are left with that horrible sensation of thinking you would have been better off doing nothing.

So I suppose the moral of this story is don't trade for the sake of trading, only trade markets that you are experienced in and that you have a good understanding of. So for example, don't trade a Japanese football match (unless you have a good understanding of the league and the teams involved) or a tennis match between 2 players you have never even heard of because ultimately, this is just gambling and you have no more than a 50% chance of getting it right.

As with most things in life its quality rather than quantity of trading that really counts so if you find yourself in this situation - scouring Betfair for something to trade - imagine how you will feel if you trade for 4 hours and end up losing money compared to how you would feel switching off your PC and going to play golf and then trading the matches you want to trade later or tomorrow.

Anyway, I'm just off to trade Croatia v Italy in the 2011 Water Polo Championships!!

For more information on trading the sports markets, visit www.interactivesportsinvestor.com  

Is Making Money on Betfair really that Easy?

We talk to people all the time that want to make money trading/gambling on Betfair as they love Sport and they see it as an opportunity to give them an enviable lifestyle and release them from the shackles of their boring 9 - 5 life.

What never ceases to amaze us though is that the vast majority of these people are not willing to put the time and effort into becoming successful. More often than not, they will deposit a couple of hundred pounds in their account and after a few weeks, they have lost it and they become disillusoined and then think that its just not possible to make a living trading on Betfair.

Now, consider this, how long does it take to train to become an accountant, a doctor or a vet or in fact, how long does it take to become proficient at any well paid job - the answer is typically measured in years and definitely not months.

Consider also, in any other profession would you not have some sort of formal education to become proficient? Well why do people undertaking a career (even if its part time) not take advantage of the education and help that is available? I can only guess that it comes down to the fact that they are not willing to pay for this education - but what about the saying 'speculate to accumulate'. You will lose far more money than it costs for the education by trying it on your own and you will probably give up - denying yourself the opportunity and lifestyle that sports trading undoubtedly gives to those willing to master it.

So the next time you start trading, ask yourself, are you giving yourself the best chance of success? Why not complete our Free Investor Profile questionnaire to get an idea of the level you're at - click on the following link take the Sports Traders Health Check  

For more information on trading the Sports Markets, please visit www.interactivesportsinvestor.com.

What is Value?

I was on the Betfair forum the other day having a chat with various people about various things and we got onto the subject of value and one guy was adamant that there was never any value in backing tennis players at odds of less than 1.08.

Now I could see his point in that you have to risk a lot of money to make decent returns backing at odds as low as this but as far as I'm concerned you can get value at any price if the price you are paying is too low. You will notice as well that liquidity on matches where the favourite is priced at under 1.1 is normally very high because a lot of punters see backing the favourite at these prices almost as 'free' money which of course it never is as now and again the huge underdog pulls off a massive shock and wins - thats the beauty of Sport!

From a traders perspective its less stressful trading down at 1.1 price range but clearly to make decent returns you have to have a large bank to play with. The reason its less stressful are that say you back the server at odds of 1.1 and he gets his serve broken in the first game then his price would only go out to around 1.2 maybe 1.25 so you have 'lost' 15 ticks eg using a stake of £500 you would be £60 down if you were to hedge out but remember the favourite is still priced at 1.25 so still heavily expected to win so you have a choice, you either let the trade run in the hope that he comes back (the chances are that he/she will) or you hedge out and take the £60 loss and recover this later by backing the favourite at the new higher price.

Compare this to backing a moderate favourite priced at 1.6 with £500, now obviously the returns are much higher if this player wins and you have backed them but in the same scenario if the favourite's serve was broken early then their price could quite easily go out to around 2.1, if this happened you could hedge out for £120 loss - its more likely to happen and if it does you have a much bigger loss. The problem with trading in this price range is that when a point goes against you, the money on the ladder can disappear and if you want to hedge out you end up having to hedge out at a ridiculous price as its the only price available.      

I guess as with all these things it depends on your attitude to risk but you do have to question why liquidity in matches - tennis especially - is so much higher when there is a heavy favourite involved.

For more information on trading the Sports Markets, please visit www.interactivesportsinvestor.com
            

Will he stay or will he go?

Well as a keen Man City fan, I have been reading with interest over the last few weeks about the Tevez saga and whether he's leaving or not. It now looks like a foregone conclusion that he is heading back to Corinthians and I just wish they had let him go sooner as the last thing any team needs is player whose heart isn't in it. Let him leave and start focussing on the players that are there and the new season.

What will be interesting though will be to see if the odds on City to win the title start to go out as a result of him leaving. They are currently 3rd favourites and priced at 5.2 but they were as low as 4.9. I have no doubt that him leaving will impact the team adversely, when he didn't play last year, the team didn't look as dangerous and he scored a third of City's league goals last year.

However, I was surprised when I looked at the stats in more detail as actually City didn't really miss him that much when he didn't play - in the 2 seasons he has played for City the team has won 52% of the matches he has played in and 50% of the matches they have played without him. Also, the team only scores 0.06 less goals per game without him in the team.

So I predict, that City will cope without Tevez fine next year although City's price to win the title will drift a bit over the next few weeks when they secure Aguerro and he starts banging in the goals, their price will start to come in again.....or is that just wishful thinking??

For more information on Sports Trading, please visit www.interactivesportsinvestor.com        

  

Tennis In Play Odds

I was trading a match this morning and it reminded me of why I love trading tennis so much because the opportunities to make profits are amazing. The match in question was Kolar v Pervak at a WTA tournament in Austria. To give you some background, Kolar is a sixteen year old who has been quite successful on the ITF tour and is obviously one for the future but this is her first WTA tour event. Pervak is a seasoned pro and is ranked 61 in the World.

Anyway, Kolar won an error strewn first set 6 - 4 largely due to the fact that Pervak was serving terribly, she must have had around 10 double faults. Anyway, Kolar then went a break ahead in the second set and in fact raced to a 5 - 2 lead and by this point she was priced at around 1.04 but remember, she was only one break of serve up and was a game away from the biggest win of her career. There wasn't actually much between the players on the day, Pervak was just making more unforced errors.

As you can guess, Kolar tightened up as victory was within her grasp and Pervak won the second set and then went onto win the match so anyone that Layed Kolar late in the second set would have made a great return whilst risking little.

The point I am trying to make is that when trading tennis you have to look at the big picture and work out the real chances of a certain outcome happening. In the example below, whilst Kolar should have been favourite when she was 5 - 2 up in the second, should she really have been priced as low as 1.04. Remember, she is only 16 and has never even played a WTA event before, she was bound to tighten up.

So when trading tennis, don't just look at the ladder interface on ISI Trader, make sure you think about the bigger picture and try and think what each player is thinking. You will find that players are priced too low sometimes as they approach victory as closing out matches is always difficult especially for the underdog.

For more information on Sports Trading, please visit www.interactivesportsinvestor.com.