Excelling in mediocrity

I've been experimenting with the Excel automation capability of BetAngel Pro since May and have had several occasions when I've thought I've finally found The Answer! However, so far most of the criteria I've been using have resulted in variable results, normally ending up in a neutral result over several races.

I'm not a programmer, but I did used to be over 15 years ago and I've dabbled with bits and pieces since then to serve a purpose outside of work (e.g. Filemaker Pro was an easy way of creating a database to import and report on my betfair results). I soon found that the Excel macros wouldn't enable me to do what I wanted to try out and so I've delved into Visual Basic / VBA which is a whole bag of tricks included as additional functionality in Excel that I never knew about. It's all very well getting automated, but without a good system it's fruitless. I think the main downfall is that in order to be fully automated, stop-loss is required and as I discussed in a previous post, I'm struggling to find the long-term value of those.

If there is a solution to trading successfully in this manner, I think it would incorporate a mixture of automation and manual skill. I wrote a new automation system this morning whilst watching "Hollyoaks" (Darren has really chanced his luck this time, faking the death of his father, as if lumping his home and business on a roulette wheel wasn't enough before!). Once I got chance to start using it this afternoon, I found that I really needed to ditch the stop-loss and I used the automation to open the trades and I would manually close them unless they reached the offset I'd set (2 ticks).

The real advantage of the automation is that it is a lot faster than me (even on my trusty old laptop!) and it doesn't get bored of looking for the criteria. The fact that it can't deviate from the criteria means that it it possible to test the criteria (if you can be bothered to sit around for long enough) to see if you have an edge and also has the huge advantage of not going on tilt! One point that I noticed was that often after closing a successful trade the system would place another trade before I'd even had time to think about it - aka "striking whilst the iron's hot", which just happens so much quicker than doing it manually.

I was quite motivated to sit it out because the first race I traded, the automation produced 11 successful trades out of 13! I'd already worked out how I was going to spend the £4k I'd have earned next week before the 2:10 started! Of course it's never that simple, each market is different and the subsequent ones didn't work the same.

When I started this blog I wasn't looking for a "system", but I do need an edge to my trading. What I have learnt from reading about the psychological aspects of trading successfully is that I do need a definable "edge" to enable me to remain calm and ride-out losses when they inevitably occur so that I can reap the benefits of long-term profits.

I will be trying out the system further tomorrow, again with small stakes, now that I have had chance to refine it and see how it goes.

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  1. Hi

    How is your trading going now?
    I'm intersted in how you got around the stop loss problem as I the same thing happening time after time.

  2. Hi Peter,

    It's going OK thanks, many ups and downs. I'm currently more optimistic than ever after significantly improving my choice of trades and also working hard towards consistency and discipline. I've tried so many different techniques since my last post on the blog, I have been thinking about making some more posts when I have something to say that hasn't already been covered many times over by other blogs.

    Regarding the stop-loss problem, my conclusion was that it cost me way more than it saved me. Maybe it is a cosy psychological feeling that the stop-loss will somehow protect your trade (and somehow make you a successful trader), but for trading one horse in the few minutes prior to a race I personally don't think it is a good idea.

    It must surely be mandatory to use stop-loss if you are doing unattended / long-term trades of several hours (say, during the morning before racing). I've experimented with this type of trading and despite the fact that they can be easy to identify, the profitability / risk ratio seems low to me. A large bank is a massive advantage too (to be able to trade several races).

    For scalping I think stop-loss is a disaster as the volatility of the market can easily trigger a stop-loss of, say, 2-ticks before heading-off in the direction you expected having closed you out at a loss! What's worse is you are no longer in the market to take advantage of the move you expected. The exact opposite of what you want! Also, I've tried setting the stop-loss at say, 5 ticks, only to become paralysed to exit a bad trade before it got to 5 ticks! I think what is needed is to take responsibility quickly yourself. This becomes easier with practise. I also remind myself that this is what I'm going to do before I start trading every day.

    For swing-trading it's not much better although trailing stop-loss is one method of exiting your trades (but not one I think is that great!). I'd rather exit a swing trade by offloading my stake in portions, say, 25% or 50% at a time when the trend halts - that way if the trend resumes you are still profiting, whilst if it reverses you have already guaranteed some profit and can then quickly close the rest of the trade.

    One other possibility for using stop-loss I think may be where you trade the front 3 horses in the market in a small-field race. Basically if one horse is steaming, then one or both of the others have to drift. This is not a guarantee to profit though if the moves are short-term, however in a market with strong trends, you could place large offset orders on all 3 at the same time (with relatively small stop-losses, using trailing stop), which may well show you a profit. Personally I think these opportunities are more difficult to spot and you'll have to have discipline not to be winging it with this method on every race!

    If you are having a problem with stop-loss time and time again, I would suggest that you need to change what you are doing.

    Thanks for your question and all the best with your trading.