Beliefs

According to NLP (Neuro Linguistic Programming), your behaviours in an activity are affected by the beliefs and values you have associated to it. As an example, say you want to become better at public speaking (behaviour) and you take some classes, but despite all the training, deep down you don't believe you are any good at public speaking, then when it comes around to standing up to speak, your body will respond to your beliefs and your voice will waver, etc. Then, when you get some feedback, you'll filter it through those beliefs, e.g. if there are two people both of whom are equally talented but one has the belief that they are a great public speaker and the other that they are not, then if they both get told that they are really good, one will believe it and use that comment to reinforce their belief further, whereas the other won't believe it and will probably find a way to use it to back up their belief that they are not.

Okay, all well and good but what has this got to do with trading? Well, part of your success or failure is related to the beliefs you have. If you don't believe that you'll ever make a profit or successfully trade at a new level of stake then you will find a way to make that happen. This is where self sabotage appears. Where you do something stupid, knowing it's stupid, but do it all the same. NLP offers lots of processes for changing beliefs but sometimes, just realising that a false belief is present, can help bring it to the surface so you can start breaking it down and challenging it.

Soros wisdom

George Soros, who is a well known, wealthy and highly successful trader and speculator, apparently had a philosphy for being a successful trader and I think it is worth mentioning here. He said, "The way to build long term returns is through preservation of capital and home runs".

So, he basically advises the opposite of what I have been doing (and a lot of others too, I reckon). That is, most people I know would snatch up any profit quickly but let a potential loss ride in the hope that it gets better. Chances are it will get worse, which means with the opposite approach, the Soros approach, the chances are that capital is preserved (as losses are cut early) and as profits are let run until momentum starts to fold, returns are maximised. Of course, when the market does a mad swing the wrong way, that nicely growing number of potential profit ticks may get lost but looking longer term, there should be some big home runs.

Another saying I have found that is attributed to George Soros is, "it's not whether you are right or wrong that's important but how much money you make when you are right and how much you lose when you are wrong"

I like that. It helps me make sense of my past trading mistakes, where I'd scalp a few points and be very happy only to mis-interpret the market direction and then sit there hoping it would swing back again, as my loss was creeping up.

First Post

Hi,

My names Richard. I've got a number of diverse interests and one of those is trading on the bet exchanges. Just to give an idea of what I mean by diverse, I have worked in IT for a number of years (For those in the know or who like IT acronyms: SQL Server, .NET, AS, SSIS, XML, etc), I am an avid screenwriter and involved in putting together a short film (http://diaryofashortfilm.blogspot.com) and am also a hypnotist and NLP master practitioner.
So, basically, I am a bit strange!

The hardest part of my life is trying to find time to do anything! I am in the process of getting married (2 weeks to go) and my finance and I have two kids (Rebecca who is 8 and little Harry who is 2).

The purpose of this blog is to document my progress Bet Exchange trading, starting with a tiny bank of £100 and aiming for a chunky £100K (nice if you've got it). I plan to discuss any ideas, strategies and learnings and feedback on any developments I make in terms of software etc. I'm aiming to put together my own bit of trading software using the Betfair API, so if anyones interested, I can share details of that.

Oh yeah, I intend to focus solely on Horse racing as the market for my trading. I'm not particularly interested in horse racing per se, but it seems to be an idea to focus on a specific market and there are a lot of races every day.