Trading Habits

Been reading this month's Traders magazine, which has a two-part article on the "Habits of Wealthy Traders". This, of course, is directed towards traders of the stock and financial markets, but there is much in the article that can be successfully applied to us sports bettors and traders. I'll list the first ten here and briefly go through them.

1. Wealthy traders are patient with winning trades and enormously impatient with losing trades.
Nothing new here. This is a well-worn motto about letting winning positions run and cutting losing positions quickly. Yada yada.



2. Wealthy traders realise that making money is more important that being right.
This is a bit more interesting. I think Peter Webb had a way of putting this, and it was something like, "Don't fall in love with a position because it will never love you back". Essentially, be completely and utterly prepared to stand your position on its head. Don't stick with something just because you judged it that way at the start. Look what's actually happening and react accordingly. Always good advice.

3. Wealthy traders view technical analysis as a picture of where traders are lining up to buy and sell.
This also is of interest. Here they are saying that charts and trendlines should not necessarily be viewed as indications that a price is going to turn or change direction, but rather as snapshots of where other traders are lining up to buy or sell (back or lay) - a mental shift of thinking in other words. Not sure how useful this is for me however.

4. Before they enter every trade, wealthy traders know where they will exit for either profit or loss.
For me, this is common sense. If I open a trade, I know how much profit I am looking for in advance - although this can change if things turn in my favour (see point 1). The loss should also be pre-calculated.

5. Wealthy traders approach trade number five with the same conviction as the previous four losing trades.
This, I suppose, is all to do with mental toughness. If we really believe that we have an edge of some kind, then we have to play that edge out in the market. Sometimes the market will go against us (variance) but there should be perserverance and the same, steady approach should be adopted come what may. You've lost the last four? Don't allow your confidence to be knocked. Work your way through the variance and come out the other side.

6. Wealthy traders use "naked" charts.
Not so relevant to us exchange bettors, although I'm sure there are some out there who employ "too many" tools and end up clouding the issue. This can lead to a "cannot see the wood for the trees" scenario.

7. Wealthy traders are comfortable making decisions with incomplete information.
Isn't that just trading full-stop? Complete information is having the final result at hand, and I don't know too many people who have access to that. Unfortunately I don't have the Sport Almanac for the years 2000 to 2020 (like Biff did in Back To The Future), so I'll have to settle for making judgements on the information I can get. Not really sure what they're saying here.

8. Wealthy traders stopped trying to pick tops and bottoms long ago.
I like this one. They're saying that the masses look for indications of the top of the peak or the bottom of the valley, hoping to ride the wave - whereas wealthy traders simply wait for it to happen and grab the middle of the move.

This is much more difficult than it sounds of course. On the occasions when I've tried to trade the GGs (which I'm not very good at), by the time I've reacted to a change of direction, it's already bottoming/topped out. This may be more applicable to the financial markets than the betting exchanges, I don't know.

9. Wealthy traders do not think of the market as expensive or cheap.
To apply this to sports trading, I would say they are implying that value is not necessarily the right judgement when trading. Instead the question should simply be "Can I buy or sell this for a profit in the next five/ten seconds/minutes?" There is no "value" in the eyes of the trader, only the knowledge that they can make a profit in the next immediate period.

This one will, I'm sure, open up a right can of worms. I'm sure there are many people who will agree with this, and a ton of people who won't.

10. Wealthy traders are aggressive with size when they are doing well and modest when they are not.
This is the absolute opposite of chasing losses. When confident of a position that is starting to go well, increase the stake. When you've lost a trade badly, scale right back until a real and definite opportunity next arises.


Okay, well that's the summary of part one. I have chased my way through it, and with my superficial brushstrokes, may have lost some of the original meaning, but at least one of these should prove to be relevant to all of us.

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Another good, solid night for me on the markets. I seem to have got my steady approach back that I had in January but seemed to have temporarily lost at the beginning on February. Pleased with tonight's trading:


Football: £134.90 | Tote: |  Total P&L:  £134.90 

 

Football Showing 1 - 5 of 5 markets

Market Start time Settled date Profit/loss (£)
Football / Mgladbach v Hamburg : Over/Under 2.5 goals 24-Feb-12 19:30  24-Feb-12 21:21  1.19
Football / Mgladbach v Hamburg : Correct Score 24-Feb-12 19:30  24-Feb-12 21:20  21.21
Football / Angers v Bastia : Correct Score 24-Feb-12 19:00  24-Feb-12 20:52  50.46
Football / Mgladbach v Hamburg : Over/Under 1.5 Goals 24-Feb-12 19:30  24-Feb-12 20:45  1.09
Football / Dynamo Dresden v Duisburg : Correct Score 24-Feb-12 17:00  24-Feb-12 18:49  60.95