Don't Panic

Centre Court Trading had a post yesterday that many of us can probably identify with. He wrote that

...back in March, when I was going through those terrible dark ages, I attempted to change my strategy and be a little more proactive. It back-fired because I didn't fully commit to the change. I ended up not letting trades run long enough, cutting out early due to fear and didn't know what my plan was from game to game.

Probably the single biggest reason why most traders fail is that they cut their winners short and let the losers run, exactly the opposite of what they should do. CCT also said:

There were times yesterday where I was spotting opportunities but, as I've become inclined to do, ignored them as they were not quite as 'sure' as I would have liked. As you can guess, almost all of those opportunities would have produced green positions.

The US Open final was a classic example. I managed to catch Djokovic at around 1.8 after a few games and was convinced by that point that he was going to win. I didn't think there was any point hanging around for a price above evens, as he was looking far better than Nadal. I only went in with half stakes, as Nadal was still level at the time and Djokovic's price was moving out. But my cautious mindset panicked at the first sign of Nadal picking his game up and I bailed out early for a small red. Nadal didn't trade above evens the entire match. I was gutted because if I'd just held on for a few more points (and I was on half stakes so should have allowed for a bit longer holding my position) I would've ended with my largest win for months.

The problem with being as 'sure' as you might like to be before having a bet in play, is that by the time you decide, the bet is likely to be gone. Trade enough, and you learn to harness the 'Blink'* instinct that I have written about before on here. And my advice on panicking at the first sign of trouble, is the same as that of Corporal Jones in Dad's Army - don't. Easier said than done, you might say, but it often pays to "be greedy when others are fearful, be fearful when others are greedy" - Warren Buffett. What is essential here though, is that you stake sensibly. Nervous money doesn't win. Over-staking leads to poor decisions, which lead to losses.

A poster on the Betfair forum had this interesting statistic about BETDAQ's change in fortune since the Super Premium Charge kicked in:

Quite an upturn for them, and some reports suggest that horse racing markets are also steadily improving. Betfair may well live to regret their latest move. While it may be true that only a small number of customers (750?) are directly affected, thousands more are indirectly affected. Either they are closing in on the finishing line, or if not any time soon, at least they aspire to at some time in the future, or they are impacted by thinner markets and less value as the big boys depart for greener, or purpler, pastures. Not to mention that it's very poor PR and people like myself who would have happily married Betfair a few years ago no longer feel the same way. If BETDAQ picks up in the markets less travelled, like many others, I'll be gone.

Boring stuff now, (ok, even MORE boring stuff), and two inter-league games tonight; Manchester City v Napoli and Villareal v Bayern Munich. My crazy spreadsheet thinks City should be at 1.7 v Napoli, and that 1.36 is a value lay. I'm not so sure, and whover said "numbers don't lie" obviously never tried making money from football betting. The Under 3.5 at 1.54 looks value.

Bayern Munich at 2.18 are value to win at Villareal, but no value on the Over / Under as my numbers fall almost exactly where the market currently sits - 2.11 U, 1.9 O.

The Europa League on Thursday has just one inter-league game, which is Udinese v Rennes. I have Udinese at 1.79, the market at 1.94. Unders for me is 1.85, the market around 1.91.

I checked my Premium Charge statement yesterday, and I know I have posted when I have been at 19.99% and had to pay, but last week luck was on my side:

* For any newcomers to this blog, Blink is a book by Malcolm Gladwell, about the first two seconds of looking--the decisive glance that knows in an instant. Add it to your Xmas list as I urged you back in 2008. It's very relevant to trading and the markets. Sometimes, you just KNOW when a price is wrong.