Finally, the bubble burst and I lost

Finally, the bubble burst and I lost

After the anger subsided, I felt relieved, finally, the bubble burst and I lost. Not to say I hadn’t lost on random games in the last few months, but week on week, month on month I was just stacking it up. The pressure was building on me, I was getting erratic and I knew it. I bought a bunch of books, of all 10 titles I bought “What I learned losing a million dollars” by Brendan Moynihan jumped out at me. Almost as if I knew I was getting wild and wanted to help protect what I have achieved in this first 9 months of trading.

It’s not as if I wanted to lose, but it was inevitable, the way in which I lost it though was avoidable and that’s where the anger came from. I remember when I used to come home early from a poker session sometimes and Bec would know usually I had done my balls. “Did you play bad or did run bad”? she would ask. Knowing that if I lost playing bad I’d be upset with myself. In fact, when I had played great poker and just got unlucky I was rarely upset (on the back end of a 4 month break even stretch those sessions started to take their toll too but for 99% of the time I was fine). It was the bad play where I used to relive the hand countless times and think about how or what I should have done better. I think its the fact that the mistake is often so elementary and one you’ve made before that pisses you off.

Over confidence and the “invincibility cloak” activated. Really that’s all I can put it down too, the fact that I started to believe I was going to be able to dig myself out of anything. Everything I’ve touched has turned to gold of late and I started getting loose. What started as a small investment with some hedges in place on Mexico against Chile turned into a monster $3,000 loss after I compounded the error by trying to buy my way out of trouble. It wasn’t just the fact I was betting where I have no edge, but I chased, tut tut, naughty boy.

Money lost, nothing lost, confidence lost everything lost. It’s amazing how quickly confidence comes and goes. With those errors came back questions about my lack of judgement in the moment, as well as concerns on discipline and abilities to learn from my mistakes. These were issues I’ve dealt with firstly in poker but trading sport too. I’ve always considered myself a very astute bankroll/ exposure limit manager. I remember seeing people in for $1500, $2000, $3000 in a $2/$3 game of cards and wonder where their limit was. I mean, those games don’t run deep enough that you can ever get that sort of money back in a session, not to mention you ain’t thinking right when you that far down the well. I always limited myself to 2 buy-ins per session with a third available if the game was crazy hot and there were whales throwing good money after bad. In fact I saw it as a big edge I had over my competitors on the felt. They didn’t know how not to lose. By that I mean when they lost, they lost big, when I lost, I lost small. The same principle is helpful in sports too in my opinion.

One quick war story, the one that got away. Missed a big payday the other night, I was fucking spewing. I had a theory that seemed fine but sadly the theory didn’t play out in practice. I’ve attached some screenshots so you can see how things progressed. The short of the long was I had a nice green level book in the Manly v Penrith game a couple of weekends ago. Manly scored probably their 4th try to go out by 20 early in the second half. At Brooky, 20 in front, Penrith playing pretty average, but still, 35 mins to go. Haven’t seen this volume before, but someone comes in and lumps on $25,000 at $1.06 on Manly. Penrith get a scrum inside attacking 30 and I decided to lay $5,000 of the now $12,000 left with some of my green, Mansour over in the corner. When the margin got back to 10 and Manly got 2 repeat sets I decided to hedge at $1.10. Manly seemed to have settled to me and I picked up a few ticks, if they went over in the 4th set, prices would be $1.02. They didn’t score and although I had plans to re-enter, that wasn’t practical as the liquidity isn’t there like it was when the person lumped at $1.06. I hedged for $1,000 profit but Penrith went on to score 27 unanswered points in 35 mins to win the game and I missed out on $3,000 of green. Dirty. Mind you, not as dirty as the backer at $1.06, literally from the moment he backed them, Manly never scored another point.

Period 1: +$10,425.07

Period 2: -$2,371.68

Account balance +$49,857.76 (9 months)

Cheers Mac

Betfair trading and betting profit/loss graph
Betfair trading and betting profit/loss graph
Betfair trading and betting individual plays from 1st of June 2016 to 21st of June 2016.
Betfair trading and betting individual plays from 1st of June 2016 to 21st of June 2016.
25000 backing $1.06 Manly v Penrith 2016 Betfair
What was left of the $25,000 lumpy @ $1.06
Layed $5000 at $1.06 on Manly
How my book looked after laying the $5000 on Manly at $1.06
Level trading book on Betfair. Rugby League NRL Manly v Penrith 2016
How I ended up, as you can see Manly price still $1.18 at this stage. Wish I left it haha

Luke, what is sports trading?

Luke, what is sports trading?

I think it’s time for a FAQ type post. I’m often telling people what I do, I can tell that for the most part, its hard to grasp verbally. Maybe written with some pretty pictures will help people to get their heads around it. Hopefully I can dispel some some of the common beliefs that just aren’t right along the way too.

Q. What is sports trading? 

A. Sports trading is trading the fluctuations in prices before and during the event. Trading the movements of the odds allows you to build whats called “a book” or ledger. Much like a bookmaker builds a book in any of the events they take bets on, sports traders can build their book by backing or laying a particular runner in an event.

Q. What is lay betting?

A. When I “lay a bet”, I’m essentially playing bookmaker. This means someone has a bet with me on a particular runner in an event and if that runner wins, I need to pay out the person the worth of the bet. If the runner loses I keep the amount bet by the person, just like a bookmaker would.

What is lay betting?
Lay bet overview. You are playing bookmaker.

 

Q. Whats the difference between what you do and a bookmaker? 

A. There are subtle differences, but ultimately there are a lot of similarities to what we do. The biggest difference is obviously the volume, solo sports traders like myself have much smaller bankrolls than your big corporate bookies. As such, the size of the bets taken and placed are much smaller. I’m able to dictate from the get go, how much risk I have on any given trade. Like bookmakers though I can adjust that risk before and during the match.

Q. So you’re just gambling for a living?

A. Well, in short, yes. What makes the proposition different from a few mates having a bet on the footy each weekend though is the ability for me to hedge my position during the event. I often have a number of chances to limit my risk while the match is on, or, guarantee profits no matter the outcome of the event. Check out the screen grab from Betfair on a trade done in the 2011 French Open.

Betfair trading French Open 2011 on Rafael Nadal
Betfair trading French Open 2011 on Rafael Nadal

 

Q. Trading the stock market would be less risky, right? 

A. This is a massive myth. I’d say they carry equal risk, if you buy shares you are making a bet that the value of those shares will rise in value. No one knows, unless you’re insider trading, that would be like fixing in the sports trading world, but that topic is for another day. I’d go as far to say that any investment is a gamble, some bigger than others, but you think the people who had a total of $140 billion invested in their saving accounts during the great depression saw that investment as a “gamble”? Of course not, it was “as safe as houses”. Speaking of houses, do you think the people that bought “sub-prime” homes in the US before the property bubble bust in the mid 2000’s thought they were gambling? No, it was a sure thing, its property. There are no “sure things” when investing at any level.

Q. How do you know what will happen in an event?

A. I don’t, no one knows, but based on my knowledge of how prices move in the market and what might be “more likely” to happen I can take positions before or during a match. Let me give you an example, lets say you look at the form of a race and see that out of the 8 runners, one of the runners has lead in every one of its previous races, meanwhile, non of the other runners have ever lead. You could make a fair estimation that this runner will lead again and place a back bet on the runner, expecting it to shorten in price the further it goes along in front. At a certain time in the race you can place a lay bet on that horse either removing liability or creating a hedge across all of the runners (like the Nadal example earlier).

Q. Do you use any specific tools to trade with?

A. I use a program called Geeks Toy which is designed for sports trading. There is a number of these about, some good, some not. A bunch of guys I know just use the Betfair interface though and they are very successful traders. So you don’t need expensive kit to start off trading, just a smartphone/ computer, internet and maybe a calculator.

Q. Don’t you wish you had security of knowing what you make every week? 

A. I’d be lying if I said there isn’t a part of me that would love that. But at the same time, I don’t see employment or  your own business as anything that is 100% fail proof either. In fact, starting a business is a huge gamble in itself. I had coffee with a friend of mine recently that has gone balls out to start his own business, hes liquidated everything and I mean everything, houses, cars, the lot. On top of that hes in debt, this guy will likely make it happen because thats the kind of guy he is, but still, there are risks attached to what hes done, risks that will have serious financial ramifications if for what ever reason it doesn’t go his way. As for employee status, I hate working for someone else, first and foremost, secondly, just because you have a job that doesn’t mean you will have employment with that business forever. You wouldn’t have to travel far to find someone with a horrible story of being made redundant and depending on their age when made redundant, it can be very tough to get back into the work force.

Q. How much can you make sports trading realistically?  

A. Realistically, its like any other industry, there are top earners and there are bottom earners. Starting out I wouldn’t have expectations too much higher than trying to make a few bucks on the side as you learn the ropes. I know guys quite well that are making between $250,000 – $500,000 P.A, in all likelihood there are likely solo operators making more, I just don’t know them. If you were able to start your own company in bookmaking down the track, the skies the limit.

If you have any other questions you would like to ask, please don’t hesitate to comment below or shoot me an email at lukeamacatyahoodotcomdotau.

Cheers Luke

 

 

 

 

 

£100 to £14k Challenge Round 2!

That’s right guys, I’m back with my second attempt at my challenge. I know I fucked up the first one, but this time around I won’t be making the same mistakes again, hopefully.

Slight change of plan from last time; I’m mainly backing now not laying,  this reduces my exposure in the market and helps my frame of mind during the trade.

So far it’s working quite well, I’ve been mainly backing over 2.5, 3.5 and both teams to score. I’m basing my decisions from data I’ve collated on my website thegoalgenerator.com.

Another technique I’ve been using this time around compared to last is; removing liability. So when I’ve backed over 2.5, the moment the first goal comes, I remove my liability leaving a free bet on overs. If I think game is dead I may hedge and take profit, otherwise I let it run depends on how I’m feeling or how much I’ve had to drink, ha!

I was up about £30-40 at one point, but I lost around £14 on one play. I was happy with my decisions and sometimes picks just didn’t work out unfortunately.

So good news; I’m back and I’m on target. Let’s roll onto next week and make some fucking money!

I ended up +£16.74, after first week of challenge, my target was £10.

Bank – £116.74  – P/L – £16.74

Cheers Jamie

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