I don't know which.
Apparently 50% of traders on betfair successfully make steady consistent profits over many events which they then wipe out (and some) with one loss, then repeat the cycle. I have been trading for a few years, some full-time, and I fall into this category. My significant loss would normally be my entire account balance.
I am part-way to understanding why (f***ing software crashes are a good excuse, but really not for all of it). I'm writing this blog partly so that any of the other 50% I'm in with who care to follow my voyage of discovery can do so without risking anything! And partly because I've just found out how to create a Blog and it seems so goddamn fashionable.
I have found a very promising book which was mentioned in a comment of an excellent blog of another betfair trader. I am part-way through it and really feel it is offering something I need (no, I already have a large drinks cabinet). It is purely psychological. Hence the name for my blog. I'm not sure that I should mention the name of the book, because this blog isn't a plug for the book (yet!) . I expect some highly intelligent person will probably comment on it before I do anyhow (if in fact anyone reads this - oh please, the other betfair bloggers have hundreds!).
Reading the book has reminded me of the first few months after I had started trading daily. I was so much more disciplined and I could trade without fear because I didn't have the fear, self-doubt and emotional pain of a large loss in my memory. I could take the trades that went against me because I knew from experience that I had an edge and I would make it back before the day was out (and if it was the last race of the day, then there was always the evening races!).
I have gambled in bookies since I was old enough to look 15 (when I was 17, but Corals didn't seem to mind). Straight-forecasts on the Greyhounds was my speciality then. One Saturday on lunch-break from my Saturday job I won £105 from a £5 bet (normally I would wager £1 but I had a "feeling!"). This was at a time when I earned less than £20 for the day (many moons ago). I think I've been searching for a "system" ever since. Crack-cocaine step aside (metaphorically, don't get me wrong).
I started trading on pre-race horse racing because it seemed that if I could work out how to have more winners than losers that all I then needed to do was increase the size of the trades from my winnings and I'd soon be working from the office of my newly funded villa in southern Spain. Ho ho ho.
What I am learning now is that I seem to have fallen into all the classic traps of trading. It's a bit of an ego-basher! I thought flunking out of university guaranteed that I'd be challenging Bill Gates by now, not falling into utter mediocrity. Anyhow, I will endeavour to keep this informative, here are a few points that I am attempting to fundamentally incorporate into my thinking when trading:
• a better understanding of the competitors / horses in a trading event is not the solution to trading difficulties or lack of consistent results (I guess that wouldn't apply to in-running trading though, but I'm not getting into that).
• it is attitude and state-of-mind that determine results.
• long-term successful traders learn how to think in probabilities.
• the typical trader assumes that he already does think in probabilities, but he doesn't.
Here's a thought to end with. It takes no skill, knowledge or forethought to execute a profitable trade, but long term profitability through consistency despite losses along the way requires a winning traders mindset. It is this that I intend to learn.
My intention is to finish the book, maybe re-read it, for the first time ever construct a trading strategy before starting my trading day and to report back faithfully to my blog with results. I am not seeking to find or write about a "system" for finding successful trades, more an attitude that will enable me to consistently increase my profits without putting my whole balance at risk.
It has occurred to me that maybe in order to be a successful trader I will have to be so mechanical and dispassionate about my trading that I will find it mind-numbingly boring and it will cease to have the attractions that it held for me at the beginning - several blogs I have read cite the desire to get out of mind-numbing day jobs, but if this isn't any more creative and carries a considerable risk then is it a superior option? As I am self-employed this is quite an issue for me and trading would have to be a lucrative way to spend an afternoon.
I will re-start trading in a week and will update before then with any further illuminating insights!