The week is almost over, so it's time for the weekly summary. At Monday I started my new job. Obviously the focus was on it, and the trading was not that dominant like before. The beginning was delightful. I hope that the new job will have in the long term a positive influence on my trading results. The financial stability will be a lot higher than the last 18 months, where I just worked 50%.
Short term the 100% activity as en employee had a negative impact on my trading results. I traded less, and when I was on the ladders, I was exhausted and impatient. After a bad day, I blew almost 70% of my bank. I couldn't keep the discipline. After that event I decided to trade with a very small bank of 100 Euros. It's sufficient for the stakes I am working with. I swore myself that there will be no more deposits to Betfair in the future. As a consequence I only can scale up with an organic grow of my bank. With other words, I have to go the hard way with 100 Euros to a considerable five digits amount. That's the reason, why the capital on the right side is a lot smaller than some days ago... on the other hand the ROI is looking better, because the new base is just 100 Euros.
I recognized that there was a small mistake in the strategy, which had a bad consequence. In my approach I make something like averaging down the entry price. In the past a trade was more lucrative, when I won it after the second entry. Now I adjusted the strategy in the way that it doesn't matter, if I win the bet with the first or second position. It has two advantages. It's easier to win with the second entry and the risk/reward-ratio is better. Beside I decided to take a bit more risks. As a consequence the hit-rate will be lower, but the pressure to win "every trade" is smaller. In general I will risk one tick to win one. Before it was the half. With this change I adapt more the principle: "Let the greens run and cut the reds."
Without considering the accident, which cost me a medium sized 3-digit-amount, the week was okay. Obviously I couldn't make a lot of trades. I entered the market not even ten times, and the profit was just around one unit.
What will bring the next weeks? I am getting used to the new rhythm with part time trading and working 100% as employee. The USA/Canada tour will bring a lot of opportunities to test the latest adjustments. I expect a lower hit-rate (the mid term target is 70-75%) and a better ratio between average profit and loss. The yield is too good at the moment. With the mentioned parameters it will be somewhere between 10-15%. I think that is a realistic number. So I can't be worried or angry, when the current numbers are going down. In the long term view, I like to compound the profit during a match. Right now this topic is not in the focus. With the mentioned reinvestments, I hope to to refine the yield to 20%+.
Like "Unknown" mentioned is better to update the P+L not every day or week. So it's easier to keep the long term focus. I like this tip, so I will refresh the KPI on the right side just every second week. It will take away some pressure and beside I can save time.
Short term the 100% activity as en employee had a negative impact on my trading results. I traded less, and when I was on the ladders, I was exhausted and impatient. After a bad day, I blew almost 70% of my bank. I couldn't keep the discipline. After that event I decided to trade with a very small bank of 100 Euros. It's sufficient for the stakes I am working with. I swore myself that there will be no more deposits to Betfair in the future. As a consequence I only can scale up with an organic grow of my bank. With other words, I have to go the hard way with 100 Euros to a considerable five digits amount. That's the reason, why the capital on the right side is a lot smaller than some days ago... on the other hand the ROI is looking better, because the new base is just 100 Euros.
I recognized that there was a small mistake in the strategy, which had a bad consequence. In my approach I make something like averaging down the entry price. In the past a trade was more lucrative, when I won it after the second entry. Now I adjusted the strategy in the way that it doesn't matter, if I win the bet with the first or second position. It has two advantages. It's easier to win with the second entry and the risk/reward-ratio is better. Beside I decided to take a bit more risks. As a consequence the hit-rate will be lower, but the pressure to win "every trade" is smaller. In general I will risk one tick to win one. Before it was the half. With this change I adapt more the principle: "Let the greens run and cut the reds."
Without considering the accident, which cost me a medium sized 3-digit-amount, the week was okay. Obviously I couldn't make a lot of trades. I entered the market not even ten times, and the profit was just around one unit.
What will bring the next weeks? I am getting used to the new rhythm with part time trading and working 100% as employee. The USA/Canada tour will bring a lot of opportunities to test the latest adjustments. I expect a lower hit-rate (the mid term target is 70-75%) and a better ratio between average profit and loss. The yield is too good at the moment. With the mentioned parameters it will be somewhere between 10-15%. I think that is a realistic number. So I can't be worried or angry, when the current numbers are going down. In the long term view, I like to compound the profit during a match. Right now this topic is not in the focus. With the mentioned reinvestments, I hope to to refine the yield to 20%+.
Like "Unknown" mentioned is better to update the P+L not every day or week. So it's easier to keep the long term focus. I like this tip, so I will refresh the KPI on the right side just every second week. It will take away some pressure and beside I can save time.
No worries, 100 EUR is more than enough to trade with the values you're using and about organic growth, I don't see another way to scale up as I favour a slow and sustainable increase of stakes.
ReplyDeleteI said this to you before but I´ll say it again, although your strategy changes seem good on paper, I think you are changing strategy and plans too often and I can't understand why. In my opinion, what is setting you back are not your strategies but the occasional mistake!
Also, and this may be related to your professional background, you give the numbers (hit-rate, etc) too much importance, Try to relax about it, I think updating hte results weekly can really help..
Finally, I still think you have all the theoretical knowledge to succeed, but you have to strengthen your pshycological side to avoid mistakes (TraderFeed blog has great posts about this!) and especially give time to your strategies. I liked your earlier plan of reaching 100 trades with the same strategy and then increasing the stakes.
Thanks for the feedback! 100 Euro is definitely enough, a small bank helps to strenghten my discipline.
ReplyDeleteI didn't change the strategy. I still have the same entry levels, I just look for a better risk-/reward-ratio (later exit). It was too much pressure to need a 75-80% hit-rate. When you know that you need 4-5 winners to cover one loser it's not a good situation for your brain. I think something like 6 of 10 it's okay. How it works in your strategy? What is more dominating, the hit-rate or a high risk/reward-ratio? I think you have to find your own way to feel comfortable. Sultan or Alchemist make profit with a hit-rate under 50%. This approach is probably not suited for me, because I become nervous with a 0/5-run. To have the pressure to win in average 4/5 (or 8/10) is not easy neither. So I look for a way between. That was the only change.
Yes, to lower the update frequency was a good idea. Definitely I will do it in the future just one time every week.
I will increase the stakes, when I doubled my bank (200 Euro). Probably it will take even more time, but it's okay. It's a marathon and not a 100 meter sprint.
No problem! In my opinion, generally it is easier to start to build a bank with a high hit-rate strategy because it helps psychologically to win more rather than not.
ReplyDeleteIn my personal case, and as I´m more or less a high-frequency trader who uses several types of strategies in the same match, I don't calculate my hit-rate anymore. But, I can tell you that I rarely go for strategies with a risk/reward ratio above 1, furthermore I adapt my stake levels accordingly to the type of strategy. Stats-wise, I prefer to focus on the final result (profit/loss) than to categorize and calculate stats for each individual strategy (even if I wanted it would be type-consuming). So I can't tell you exact numbers, but I hope what I said it is enough for you to have an idea! If it was not clear, feel free to ask more questions!
You are really helpful, thank you so much! At the moment that's my main concern. A too low risk/reward-ratio brings pressure in the need of a high hit-rate. A too high risk/reward-ratio can give you mental problems of a too long losing streak. It helps to know that your one is below 1...
DeleteLike I wrote that's the main problem of my psychological problems. To be forced to hit 80% correct, is not that easy. To lose 5 in a row neither. I have to find the right balance. The strategies didn't change for a while, it's just the duration beeing involved in a trade. This detail can decide if you are profitable in the long term. That's the reason, why I am so drilled about this figure.
About the KPI I will follow your advise... now we even had discussions with Cassini about it. I know it sounds subjective to include a trade or not. If I like to fake, I would not be that stupid to write about my mistakes and lack of discipline. Well, now I will move ahead and let the last (not that good week) behind me.
Time-consuming*
ReplyDeletebye the way... very nice input about adapting the stakes according the type of strategy. Just recognized that it can be a good option in some scenarios. I had quite a flat staking, but my analysis showed that I have to be a bit more flexible. Just made a trade, but staked too low. The risk was so small that I couldn't lose much. On the other hand I just won 30 cents, because the low stake.
DeleteI hope that you can trade soon again. You have really a big knowledge, it's a pity you can't use it in active way at the moment.
Thank you!
DeleteWhen you're starting the flat stake has some advantages as you should begin with a simple setup. This allows you to know where the mistakes are coming. If you start with a complex setup it may be tough to debug your trading. So, keep that in mind!
Yes, I will keep it as simple as possible. I just saw one opportunity, you can rise the stake, because the downside is very low. Sometimes I reduce the risk, when I don't set a stop loss.
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