Mid year analysis

One of things I like to do as the summer finishes is take a detailed look at what I’ve done over the year. 

I started off with a 12 new bots this year aimed at horse racing markets. They are purposely pretty generic, by that I mean apply to more scenarios that I would typically aim for. As a result they have a higher turnover of my bank with a smaller than average ROI. 

I don’t have a problem with that, the fact I can just leave them to do their own thing frees up my time to develop other stuff and for stuff outside trading.

If you are close or have been hit by the betfair premium charge then this does wonders the alleviate that. Look at how betfair calculate this and you will see why.

Of the 12, 5 have outperformed my expectations and I am looking to push these on. What’s the best method to do that? These adjusted stake internally, so for example if bot A yielded 5%, and bot B -2% then my daily stake for A would be higher until that yield changed. 

Now I am confident of their performance, I will take the monthly p/l for all 5 and apply the same staking to all 5. I think it’s a good thing to do where you have consistent performers, means less administration and will roll over any downturns. 

Of course that means if I’ve overlooked something or a trend changes dramatically then I will be overstaking as the same staking is used for everything.

I’m not sure if this is the way forward to be honest. It was born out of one bit having a superb month and the staking increasing wildly as I’d allocated a small bank to each bot. 

 I reacted by reducing the % bank stake of everything but the return it was giving me wasn’t worth the administration i was doing in logging the results. 
I know I harp on so much about staking but it’s a key fundamental. My last blog mentioned busting the bank, well correct staking could have prevented the spiralling effect leading to that big bank busting, losing bet!!

I think this will work and I’ve made the correct decision, we’ll see. Have a great autumn and I’ll be back with another double header blog soon. 

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Reset the bank

Not one for sharing news usually but myself and my wife have a new arrival on the way in January. Along with a new motor, a few other unexpected bills have arisen meaning I’ve taken a significant draw-down on my account. I hate doing this, it goes against all economies of scale but is unavoidable.

Operationally wise, I quite like I though and the staking takes me back to the early days when my outlook was perhaps less cynical and fresh. It’s the 3rd time I’ve done it, the first time forced with no option during my very early days went the bank blew! From the number of people inactive traders I see on Twitter selling information, databases, advice or tips i bet it is a common occurrence!

I don’t actually mind trading with a smaller bank, for a number of reasons. I log every trade I do which is linked back to a spreadsheet which gives me my staking. That is at new level and even though I carry the same risk of losing my bank compared to the higher stakes I previously used, the psychologically the pressure seems less. 

Be sure to adjust your staking as every trade you place will be reminder of where you’re at, and where you’ve fallen from.

It also gives a good opportunity to reset, re-evaluate approaches, right or wrong and to give a new target to focus towards. If your monthly  P/L over a yearly forecast has lots of variance it’s a sign you are doing something wrong, maybe discipline or staking. 

If you are starting out, blowing the bank is something that is likely to happen. It natural to experiment and the greedy, dangly carrot will almost certainly contribute. There’s nothing wrong with that, however I would almost guarantee anyone starting out is trading with a bank 50% to large. What that means is you are paying double the price to learn your trade. Be humble and accept that there is lots to learn!

Use a big bank loss as a positive to address the mindset issues you many have faced, reflect on what went wrong and nurse your wounds to make sure you don’t fall next time when climbing the mountain. 

Climb steady!