Bypassing mistakes and increasing efficiency is the effortless way to winning on the Betting Exchanges.
Failing to notice or prevent obvious mistakes, just leads to frustration and financial pain.
Now, we’re going to dissect some of the common mistakes and problems new traders face in the hope it will save you time and wasted effort!
Sports trading is not only difficult from a strategy perpective but also psychologically. Because no matter how good you are at reading charts, monitoring traded volume or assessing market sentiment, everything is useless if you can’t get your personal perspective in check.
But psychology alone isn’t to blame.
Indulging in certain behaviours and routines is the cause of many psychologically based problems within trading.
So, let’s take a look at a few of them, one by one…
Excessive Trading, Over Trading:
A frustrating experience, and one that many will engage in at some point or another. It’s easy to do. The urge as you learn to trade is, to trade as much as possible, and in some cases trade anything. Particularly markets that you don’t really know a lot about.
When you think about this rationally, it’s just stupid.
Firstly you don’t want to trade markets you know nothing about. Information is paramount.
Secondly, there’s the issue of over trading on any one single market. Sometimes born out of four trading fears.
It’s advisable to take a step back, and be specific. Ask yourself for each and every trade, ask yourself:
Why am I taking part in this trade?
Naturally that’s a little bit more difficult when scalping. If this is one of your main problems, I would advise to; be very selective about the windows in which you attempt to scalp the market.
Just remember that missing a trade, is not a losing trade.
A no-brainer. Following on from the previous point.
Why trade markets you know nothing about?
Hoping is never going to make you a profit. So, similarly, why would you trade without any kind of structured plan. Worse still, how can you measure your success, results, and know if you’re going right or wrong when you don’t have a plan to follow?
Of course, that doesn’t mean you need some kind of extensive formal document. Although a few notes about what you expect, and where the opportunities are likely to arise is advisable at the very least…
As video pack users will know, I prefer to use a checklist stall approach.
- Is the trading window active?
- Is there sufficient liquidity?
- How volatile is this market?
- Unique factors to consider?
The key is to keep this relatively short. You should be able to run through it in your head over and over without missing anything, which of course helps you avoid…
There’s no doubt what so ever, chasing your mistakes and reacting impulsively is the biggest bank killer going. The worst thing about this is chasing losses is usually born out of one small foolish mistake, then evolving into a big one.
The problem with reacting impulsively as you are effectively betting with no good reason.
We all know, effective trading only comes from exploiting an opportunity at hand. The two don’t mix.
The best remedy for this problem would be the aforementioned checklist approach, or possibly just taking a break. Particularly if you consider yourself to be a bit of a hothead.
If one thing’s for sure, it won’t help if you…
Use Oversized Stakes:
Again, tied to the previous point, although this can be a problem on its own.
Not all opportunities are of the same size. Meaning, you can’t necessarily scale up each and every trade…
Betfair trading is not the same as Forex or the stock market, in the sense that far less money is turned over. What works on £5 and £10, may not work on a thousand. Not only does this problem come after losing, but sometimes for repetitive winning.
Remember, just because you won on the last trade, it has no link to future performance.
Trading is best done without any kind of emotion or ego. The market doesn’t care for it. Even the best traders don’t predict every single move. They simply sit and wait for an opportunity to present itself.
However, when they do, they ensure that staking is proportionate to that of the opportunity and offer.
The complete opposite to over trading. Some people are more susceptible to it than others.
Information is vital to success. However, over analysing can be quite frustrating in the sense that you understood what was happening, and made the correct call, although spent so long deciding and analysing the situation, the peak of opportunity has already passed.
Sports markets are extremely fast moving. If you’re too slow to react, chances are, you’ll get stung. There’s a fine line between analysing and confirming indicators and throwing everything you have at a potential opportunity.
Hopefully you can see, throughout this article, how these main issues are likely to shape your own thinking and behavior, whilst in the moment, trading the pre-race markets.
Have a think about it:
Which for the five mentioned do you find you are guilty of doing?
Feel free to drop a comment, and open the discussion below, with other readers.