Monday, 7 July 2008

Doing The Math

Since Last Post P/L: £500.88
Monthly P/L: £500.88
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The last few days have been challenging. Not so much because of the trading but because I've had to take a good hard look at myself and delve into my past results to see if I can pick out any weaknesses in my methods.
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I mentioned in my last post that I felt that something wasn't right and boy am I glad that I've done this analysis. To start the ball rolling I decided to just go back over my last 3 months profit & loss and review the same statistics that had been mentioned by another blogger (you know who you are!)
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The results were interesting even if they did take a few hours to digest:
  • My average win/loss per market : £41.94
  • My average win : £102.15
  • My average loss : £39.16
  • My win % : 57%

Just taking the time to sit down and go through each market has been hugely beneficial with nowhere to hide but the bare facts - it really has been an eye opener! Okay, so what do they mean - what's the big deal? The key thing to remember here is that each of the above are all linked to each other. You can have a great win % but if your average win/loss per market is a negative figure you don't have to be a genius to work out you're losing money etc. From my stats it seems my main strength is cutting my losses quickly as there's quite a big difference in my average win and average loss figures. This is hugely positive and shows that I must be dealing with the psychological aspect of this game pretty well. If I'm looking to pick holes then maybe it's my average win/loss per market. To make a significant and consistent amounts each month this needs to be higher but Rome wasn't built in a day and I'm sure that this number's on an upward curve. Granted, these statistics are only representing my results for a short period of time so I'm now attempting to go a step further. I've already been in touch with Betfair and requested a full list of my settled markets since the 1st January 2007. This will allow me to build a better picture of how well I'm really doing and hopefully help me construct a road map for the rest of the year.

With all of this fresh in my mind I've found it a lot easier to focus over the last few days and it seems to have paid off:

Cricket
Durham v Kent : £170.91
Essex v Yorkshire : £154.96
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Darts
Mardle v Gray : £40.45
Jenkins v McGowan : £0.66
Priestley v Stompe : £1.51
Convery v Klaasen : £21.83
Lewis v Thornton : £28.62
Hamilton v Brenneman : £24.67
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Rugby Union
New Zealand v South Africa : £118.89
Australia v France : £7.61
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Motor Sport
British Grand Prix : £16.87
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On Friday, I was also moved to get involved in the Big Brother 9 winner market. I've not ventured into this area before but after noticing Darnell was a strong joint favourite I felt compelled to shove in a lay at average odds of 3.59. I just can't see him winning and with news that another 3 housemates were going in I was sure his price would drift over the next 9 weeks. At the time of writing he's drifted to 3.80.
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I know, I know, it's a TV show - but if you play it right I'm sure there's plenty of money to be made here. Let's hope I'm right!
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9 comments:

Anonymous said...

Thanks Mark for another informative article.On the subject of cutting losses how quick is quick?(if that doesn't sound double dutch!).Would you get out at a certain % of your position(say 10% of your stake)or just when the position is,say,five ticks down.Finally at what point do you accept a loss on a event?After the first loss,25 % of your stake or any other place?Sorry lots of questions but the cutting of losses is the one thing holding my trading back at the moment(i can take a loss but when is the problem!)Many thanks,Dave.

Mark Iverson said...

Hi Dave,

Thanks for the comments. Sorry for the late reply but I've been away with work and have only just got back.

I would suggest that you cut a loss as soon as the market reacts in a way that you didn't expect. This sounds obvious doesn't it? Think about it though - alot of people are happy to stay in a trade as long as they don't hit their stop loss figure. This is something I don't do.

I'll give an example.

Many times I'll enter a position only for the market to stay stagnant. As this is not what I expected to happen I will often just scratch the trade and re-evaluate. By doing this I am always in touch with my goals/targets being very short term and measurable. Of course, I do still have a stop loss figure just in case the market moves quicker than expected in the wrong direction (this is 2% of my total trading bank on any one event) but I rarely get close to this in one trade as I'm normally in and out of the market very often for short periods of time.

If I hold my postion for minutes rather than seconds I call it a long term trade!

I hope what I've said helps and I'd be keen to know how you get on.

All the best,

Mark

Anonymous said...

Thanks Mark for taking the time to answer my question.I will bother with just one question if i may:when you cut loss a position do you leave a all red book or loss on one and no loss on the other side?
Again i really appreciate you taking the time to help me out,Dave.

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Mark Iverson said...

Hi Dave,

When I cut a loss I always go 'all red'. If I didn't do this I'd be gambling on the end result and this is not something I consider a good idea.

I've come to realise that nothing's guaranteed.

All the best,

Mark

Anonymous said...

Thanks again Mark and i will follow your advice.Best wishes,Dave.

Anthony said...

I always go red too but have considered looking at whether the loss side is more likely to come in or not. Surely if your loss side is currently at say, 5.0 and your breakeven is 1.2, the breakeven is more likely to be the final result. Deciding when to red or green up can be another trade. If you can make money trading you should be able to save money by trading the size of your loss. Have you or anyone else who reads this blog practised this? I suppose it would also depend on which sport it was. Something like horse racing is obvioulsy more volatile, whereas test cricket tends to be a slower market.
Also (sorry, long comment), if you left your loss on one side, wouldn't it equal itself out in the long term?

Mark Iverson said...

Hi Anthony,

It's a good point but for me it would 'muddy the waters'.

Remember that the breakeven figure you mention is only the market's perceived probabiltiy of the end result - when trading inplay these estimations can often be way off mark.

I like to keep things simple in order to maintain my focus but I'm sure there's others out there that follow that approach.

Thanks for the comments and all the best,

Mark

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