I traded the early NFL game, this week. I felt much clearer in my perspective while trading the match, not only for each trade, but for the match itself. I’ve been guilty in the past of not having an understanding of my profit on a trade as a percentage of my stake. Mostly I do this when I’ve layed first for a small liability. When I back first it’s easy, buy for ‘x’, sell for ‘y’, profit is ‘z’, ‘z’ is what percentage of ‘x’ (if you didn’t follow the equation at the end there, re-read it, you just slow, don’t stress). When laying first though, I’ve been blinded by the potentially large upside on the trade.
For example, take the trade I did in the Broncos v Kansas City game (screenshot below). There I decided to lay Kansas City at $1.17 for $100. Unlike back betting, where my full risk would be $100 (in this instance), I’m risking only $17. Essentially this means my stake is just $17. I’ve been blinded by the potential win with this lay at times. The most I can win is $100 (if the team I layed in this case KC went on to lose), that would constitute a profit of 588% on my stake ($17). That return is unrealistic from one trade, in this case, a profit of just $8.50 however, would provide me with a 50% ROI for this trade.
That moment of clarity has made me much more aware during my trades of what is a good ROI per trade. Twice I entered the market and twice I made 60%+ on my trade. In the past, with the potentially large upside, I’d often let the trade run and run only to miss the most opportune time to exit the market. This not only has cost me profit, but my original stake in the past, silly prick, me. This has definitely been an “ah ha” moment of my short trading career.
+20 on this match, happy with the profit, but even happier with the ability to refine my process. In my next few posts I will be; setting up some spreadsheets, bankroll, targets and graphs. These things will really help me to stay focused, as I love a good graph.