Learning to trade (financials)

I've been doing pretty well trading the financial markets (albeit with a small bank) in the past year and while it's good to pat oneself on the back for a job well done, I won't pretend I didn't catch some good lucky upswings which greatly added to the total. Still, I feel I'm learning all the time and still find it absolutely fascinating, which is great as I don't get bored reading or learning about the topics.

But there's tonnes of room for learning/improvement. Despite keeping in the black, I've really only dipped my toe into the water of financial trading and want to take it a bit further. So tomorrow, I'm starting that diploma with the Irish Institute of Financial Trading and I'm looking forward to it immensely.

The course was expensive, €950 in fact, and I'm not naive enough to think this will be some sort of silver bullet that will make me become a super trader or anything - but there's only so much you can learn at home from reading books/websites and I think the course can't hurt. I've hear very good things about it anyway so fingers crossed.

When I first started trading on Betfair, I lost a fortune and I wish there had been some sort of course out there back then. I eventually done Peter Webb's course (founder of Betangel) and it set me on the right track. That course was expensive too but it paid for itself numerous times over at this stage. Hopefully, this diploma course will eventually earn/save me €950 cost the cost over time.

Elsewhere, I see that Greece hasn't met its targets and we have (yet another) 'crisis' with the Euro. You kinda wonder how many crises' (is crisis' the plural of crisis?) we can go through before the arse just falls out of it.

Whatever happens with the Euro and Greece, hopefully some of us can make a couple of bob out of it somehow. I've no positions at the moment though as I have to get some funds back into my trading accounts (I withdrew quite a lot when I went off on hols).

I've a busy week ahead and my missus is away for the week at Cambridge to study so I doubt I'll get near the Betfair markets as I'll be minding my daughter when I'm not working. If I can nip and hour or two here or there, I'll report on my progress.

Messing in the markets

Some weird goings on in the Betfair markets today and some person/people were  fecking about with some really large orders, pushing the prices around. For the most part, I managed to avoid getting taken out although I’ve decided to quit trading for the day as it’s just too weird.

I don’t know what these people are at sometimes or what the hell their game is. Can they be making money by messing up the markets like this?

If so, more power to them but I don’t like this kind of carry on. As Father Ted might say, “Down with this sort of thing!” 

I tried to get a couple of screenshots while it happened. For example, you can see Cunning Act here – it was trading around 5.0 and then whoosh!!   this backer takes out thousands and brings it down to 4.0 in just one go!

Later on, this same person was lurking in some other markets trying to bully the prices, using stakes of between 20K and 50K. In this screenshot, you can see him with 25K around the 3.2 price. 

A few minutes after this was taken, he moved the stakes down and took out about ten ticks in one go. I’d estimate that there was around 15 grand taken out. Still haven’t figured out how people are making money like this. 

Any suggestions? 

Anyway, with all these shenanigans going on, I’m happy to jack this in for the day with a profit of just under forty quid:

The magnet effect

Done a quick round of trading just there - only had an hour as I was working today and I've a few things to do tonight. All went well and I earned just under seventeen quid in that hour. Not huge of course, but pennies make pounds.

I'm reluctant to call it a strategy, but I was using a style tonight that I sometimes refer to as the 'magnet effect'.

I use this sometimes and it has proved useful in the financial markets too. The idea is that people are drawn to round or significant numbers (especially traditional punters) and usually set the minimum/maximum price that they'll take at such numbers. For example, you might hear of someone backing a horse and saying something like "I hope I get 4/1 but the lowest I'll take is 7/2"

In that case, 7/2 (4.5) is the 'anchor' price in that persons head. He's unlikely to say that he'll take a price no lower than 71/20 for example (4.55). Many other people may also have this anchor - so it kinda acts like a bit of a magnet. If the price was 4.6 and slowly shortening, I'd be fairly confident that it would hit 4.5 and maybe bottom out or flatline for a while as people take their prices (and won't go below).

It works the opposite way too sometimes.  A price might be trading in between 7.0 and 8.0 for example. But if it's rising slowly and hits say 7.6 or 7.8, I'm usually confident it will be dragged up to the round number of 8.0.

This is why I call it the 'magnet' effect as once the price goes past a certain tipping point, it is 'dragged' to the rounder number, almost like a magnet has a pull on it.  Sometimes I'll get in with a quick scalp and lay at 7.6 and back at 7.8 as you'll often find a queue at the round number.

Of course, you have to be careful on Betfair around the 'crucial' prices such as 2.0, 3.0, 4.0, 6.0 etc as the increments change at these points.

I'm not saying it's a fool proof strategy, it's certainly not - but it's worth knowing that a lot of punters still like round numbers. Perhaps it's something we have more of in Ireland and Britain stemming from the traditional non-decimal prices?

Anyhow, here's today's P&L:

Smooth enough day

As mentioned  before, I've been neglecting the Betfair markets lately so I decided to do a few hours today with some small-ish stakes. Going to call it a day as I've to help my daughter with her homework now.

Not a bad old day really but frustratingly, I nearly had a clean sweep except for one race where I lost €2.05. I was also up to twenty quid green on the last race but made some bad calls and had to get out in the end for a profit of just €3.89

20 good races from 21 is nice but it's a little bit annoying when one goes wrong all the same. Still, I'm relatively happy with the sixty five quid earned.

I wasn't really trading any particular style today as such, I was just doing it on instinct and how I felt at the time. I think I'm getting better at this and felt in the zone today - gut instinct is not just guessing, it's all your years of experience trying to come through your sub-conscience.  I guess I haven't really nailed down one style and perhaps it's best to keep trying different things to keep on top of the markets.

I was trading since 2pm and it's nearly 6pm now so I guess that works out at over 16 quid per hour. Not earth shattering to be honest but I suppose it's still twice the minimum wage and I won't turn my nose up to it.

Didn't take too much risk today and kept my stops tight.   Didn't bother firing up Betdaq today but I'm going to try to use the Daq again later this week.

Today's P&L:

Dublin, gold, education...

Had an amazing weekend last week with Dublin winning the All-Ireland. I got a ticket at the last minute and I won’t even try to put into words what it felt like to see them win after 16 long years of heartbreak.
Needless to say, we all had a great weekend and please God it won’t be so long before we win again!

Regarding the course I’ve mentioned, I’ve decided to do the Diploma in Financial Trading as an evening course. I had a chat with one of the lads that runs it and we both agreed that the introduction course would probably be a bit too basic. It’s not cheap, but I think it will be worth it.  Hoping to start the October course.

I’ve been up to my eyes this week so I haven’t been doing any actual trading. More’s the pity!  My ‘momentum strategy’ told me to go short on a shit load of commodities and some indices a couple of days ago but I didn’t get a chance to play. Bloody raging now as loads of prices have collapsed. I feel like I’m missing a lot of opportunities lately with all the market moves so I want to get some proper money back into my accounts and get up and running ASAP. 

Gold hourly chart:

I’m getting out for a jar this evening as my daughter is having a slumber party with six other seven-year-olds. Yikes!  Before I go though, I think I’ll have a crack at the Betfair markets for an hour or so. 

Dublin lift Sam:

Cracking trade…

But I just wish I had more on!

I was trading a few markets on the machine this evening – nothing too mad as I was keeping an eye on the dinner (roast Angus beef – yum). Anyhow, I layed Monster Munchie at 3.0 and backed Supa Seeker at 5.2. This was based on my ‘momentum’ strategy.  

Anyway, I was using small stakes but the next minute... whoosh!  Monster Munchie drifts like a barge and Supa Seeker gets hammered in. I then backed Monster Munchie at 4.4 and layed Supa Seeker at 3.95 as the horses were going into the stalls. It was a cracking trade but I’m gutted that I didn’t have much money on. In the end, I made twenty quid which is grand but it was one of those double trades that doesn’t come along too often so I’m a bit peeved all the same.  If I had been using full stakes, I could have made hundreds but thems the breaks I guess. 

Anyhow, sorry for the lack of posting recently, as some of you know I’ve had some family issues and funerals etc so I haven’t been trading that much. I got back to it this week though and intend on getting back into the financial trading maybe next week.

On the financials front, I’m strongly considering doing a course with the Irish Institute of Financial Trading, possibly the Intro course starting in October. 

Readers may be familiar with the guy who set it up, Peter Brown, who often appears on shows like Vincent Brown etc. 

Anyhow, I went to one of his talks the other night and went in with a fairly closed mind expecting a hard sell. It was anything but – he talked with passion about the markets and really got me interested. The courses are expensive but you get quite a lot covered so I might just treat myself. 

On the GAA front, my beloved Dublin play Kerry in the All Ireland Final on Sunday. I still haven’t got a ticket but I’ll watch it in the pub in town anyway for a bit of atmosphere. I was 15 the last time we won Sam (1995) so this will be one hell of a special day if we can do it again. Win or lose, I’m going to have a good day out and a nice few jars regardless!

On the reading side, I've finished a lot of books since I last done a book review. Don't have time to go into details right now but New Market Wizards turned out to be a cracking read and gave me plenty of ideas. I've got my hands on both Nick Leeson books since watching 'Rogue Trader' and the one about stress proved very insightful.   At the moment, I'm reading 'God in the pits' and so far, so good.  Hopefully I can do some reviews when I get time.

Off now to eat that roast…

Back with the 'daq

Haven't used Betdaq in donkeys so I'm going to have a play around today just to see what liquidity is like.

They should have picked up some customers from Betfair over the years through commission/premium charge and other PR disasters but I'm not quite sure they've capitalised on the negativity towards Betfair.  If they had done a Ryanair style ad campaign criticising their opposition, I'm sure they'd have more customers but they didn't seem to go down that route.

Anyway, from first glance, liquidity seems very light across some sports although it's still very early in the day. But for example, on the St Leger, Betdaq have only matched one fifth of what Betfair has.


I noticed a few arbing opportunities over the past couple of days between the exchanges (backing on one, laying on the other) but whether or not it would work in reality (bots mopping them up & actually getting matched on Betdaq) remains to be seen - might give some a try today anyway.