What should this blog be about?

Hello. I'm going to ask you a favour. Don't worry, it won't cost anything. I just wanted to see if there was a preferred blog topic. At the moment I'm writing up about whatever interests me around the whole bet trading area and just thought if there was a preferred area then I could do more posts around that.

The main areas I have been trying to cover are broadly:

1) Psychology of trading

2) Bet trading software

3) Building trading software (bots, etc)

4) General observations and how my trades are going

Let me know if there is an area that is most of interest, or one that really isn't. I know I can't please all the people, all the time, but I want to try and please most of you as much as I can. So, any feedback is great.

Thanks.

Some Bot Work

A bit of a bad day on the trading front. I made a mistake whilst in-play and put on a back I didn't intend and lost. Very careless.

I also got started on my graphing application. I used the Betfair API sample code that you can get from the Betfair web site as a starting point and am changing it to be compatible with the GetMarketPricesCompressed function as this can be called 60 times a minute from the Free API. I have also found an open source graphing component that does all that I require. All I now need is time to get it written. I might post it up when it is done, if anyone is interested.

Some Advice From An Old Trader

I stumbled across some of the writings of legendary trader W. D. Gann. Gann (1878-1955) and thought I'd share some of his advice:

"Avoid increasing your trading after a long period of success or a period of profitable trades.
Be aware that you too have bad cycles. Just like the markets, you will have bullish and bearish times in your life. If you have 3 losses in a row stop trading, your cycle has changed."

This one reminded me of some advice in the book, "Fooled by Randomness", regarding how a run of good luck invariably is followed by a bad unexpected incident.

"Reduce trading after first loss; never increase."

I've done this several times. Taken a loss and then upped my stakes in the next race, to try and win it back. Mostly ended up with me down even more. I guess the idea is that when you are losing, your mental state is different to when you are winning. When you are losing, your brain is in losing mode. When in losing mode you really want to lower your stakes to avoid losing even bigger. When you are back in winning mode, then the stakes can go up.

Loss of Control or Control of Losses?

I've been thinking more about losses and how we deal with them. It seems to me that an experienced trader asks himself, "How much could I lose today?", whereas a beginner wouldn't even contemplate the possibility. Unless the idea of taking a loss is already in your mind then if it comes to the point when you have to, to avoid the possibility of taking an even bigger loss, you won't be able to. If you have read my report (see sidebar for a copy), then you will remember about the work done by Kahneman and Tversky on loss aversion. Having already prepared for the possibility of getting out of a trade early with a small loss, if the market turns against you, then you are partial innoculated against loss aversion.

Connecting again

Well, I sorted out the problem connecting to Betfair yesterday. None of the software I had was able to connect. I fixed it by downloading the .NET framework from the microsoft site and re-installed it (used the repair option). I can connect again now, yay! Not sure what broke it. Bear this in mind if you're getting strange connection problems but still have a working internet connection.

Graphs, graphs, graphs.

I didn't get to trade today. I was having trouble connecting to Betfair. I tried Bet Trader Pro, Bet Angel Pro and Betfair Direct, but there was no joy. I assumed there was a problem with the API but none were reported on the site. Oh well.

Instead, I spent a bit more time looking into technical analysis and charting. This is a technique used in financial trading. It is where the trader uses the graphs of price and volume to determine price moves. I've recently started using graphs more, as I find they give a quick indication of any overall trend and sometimes you just get some obvious humdinger trend lines. I want to experiment with some more of the financial type indicators, like bollinger bands (basically a price envelope) and moving averages. Anyone had any experience using them with bet trading?

Status Report

I've found that my recent trading has got much better. I am using a combination of graphs and the ladder trading interface in Bet Trader Pro. I switch to the grid view and check on the graph of the favourite and 2nd favourite and look at the prices of all the runners and using this I get a good idea about the price movement. I back or lay and decide where I will get out if the market moves against me. I then monitor the price and keep checking back to the graphs to see if the situation looks like it has changed. This has worked quite well so far. The only loss I had was due to Bet Trader Pro crashing before I closed a trade. It could have just been one of those things, so I'll give them the benefit of the doubt. I have noticed that this version of the software can freeze every so often if you change between grid and ladder interface regularly (which I do). It's either a teething problem of the new version or its down to my machine. I don't know.

I havn't had much time with Bet Angel Pro yet, as I'm just getting used to Bet Trader Pro, but I will get onto it.

As far as developing my own charting application, I have found a graphing component that does what I need and just need a bit of time to do some development work.

If you have read my special report (available from How to Stop Losing), then you will know I am putting a DVD together. All is moving forward there. We're busy getting the script together and everything is moving forward nicely.