Thursday 11 December 2008

The Apprentice

In the book, "High Probability Trading" the author, Marcel Link, writes "From everything I've ever heard, read and seen, a trader needs about 3 to 5 years to get through the learning period. During this time in which he is learning and honing his skills, a trader will be paying his 'tuition of trading' the same way lawyers, chefs and doctors pay to learn their craft".

I joined Betfair in April 2004, so I should be about done with my apprenticeship.

When I read that piece, I rather thought the author was exaggerating – something along the same ultra-cautious lines that McDonalds informs us that the contents of our coffee cups may be hot, or a fitness magazine tells you to seek medical advice before embarking on a 10 minute a day walking program.

However, after my 4½ years, I think he may have been under-estimating. Either that or I am a slow learner, because I am still learning. The numbers suggest that I am getting better, but every once in a while I do something that makes me question my sanity.

Another piece of advice that I am often reminded of was to concentrate on PPC, an acronym for "Preserving Precious Capital". He says "forget about making money, just try as hard as possible not to lose any" and "the key to being a winning trader is to not lose a lot when you lose. If you cut losses, the winning trades will take care of themselves".


Anonymous said...

And this scenario falls under MOM's "rule 3!"

Managing your money/preserving your capital is crucial in my view, regardless of your approach to markets (Betting exchanges or otherwise.) If you can do that, I believe the profits start looking after themselves.

Thanks for the book referrals, already on my email list to Santa!


Cassini said...

Plenty of good reading ahead for you my friend. When you're done with those, try books by Van K Tharp - Trade Your Way To Financial Freedom to start with.

Anonymous said...

Trading is just like anything else, you will be constantly learning. If you're shut off to learning then you won't get any better at it.

Cassini said...

So it's not just that I'm slow then! That's a relief. Thanks for the comment.