One of the hardest aspects of trading is knowing when it is right to increase your liabilities in the hope of turning a losing trade into a winning one or at worst a scratch trade. In pure gambling terms this is also referred to as "chasing losses". You know the story. £5 on the nag in the 2.30 at newmarket. It loses so next race you place £10 on a selection. It falls at the first fence. Third race you up the stakes to £20..........well, you get the picture.
Trading, however, is a different beast. During a football match, for example, you have 90 minutes in which you can manage your position. This may entail backing or laying in certain markets to either enhance your potential profits or conversely lessen your overall liaibilities. There is an element of control not available to you if you are a straight punter. (Bookmakers have got wise to this over the past couple of years and have followed the betting exchange model to include a cash out function during the game as an alternative option to doing nothing and hoping your initial selection comes good by the full time whistle. Ray Winstone`s east end gravely drawl in the Bet365 ads to "Cash Out - NOW" is now as immortal a phrase as Harold MacMillan`s "You`ve never had it so good").
So can chasing your losses be appropriate or correct even? The answer is based on a number of factors, arguably the most important being your risk v reward ratio. If you are comfortable enough with, say, a 100% loss, the next question you must factor into this decision is whether you would make the same selection & staking if you could re-run the game. In other words you believe your initial analysis was correct. The goals you were expecting but never came, the underdog taking a 0-3 lead by HT can be put down to an aberration of the well researched stats or just plain sod`s law. On another day you can pat yourself on the back and give the trusty crystal ball a congratulatory rub.
Other instances when increasing your liability can be, for example, where you backed certain scorelines and it is still 0-0 after 80 mins. You decide to LAY 0-0 with enough to cover your initial stake that is heading towards the grave. You have taken the view that a) in play stats (if that is your preferred criteria) suggest a goal is imminent or b) the increase in your liability - the risk - is cheap enough to warrant such a move.
Trading last night was slightly left field in that I chose an Over 2.5 acca in three Spanish games. The laibility was £40 with a maximum potential return of £152. Not, I might add, a common trade for me but there were some reasons why I felt there was some traction in such a selection. The technique I like to employ in these types of trades is to make in-play moves depending on when goals arrive. With staggered KO times this technique is quite easy to implement based on the right scenarios occuring.
The 1st leg - Villareal v Espanyol - got the trade off to the worst possible start as it ended 0-0. Even the late 0-0 lay @ 1.25 failed thus adding a further £5 red to the exisitng £40 liability. The 2nd match - Celta Vigo v Getafe - ended 1-1 thus extinguishing any chance of a profit. Now the 3d game - Levante v Real Sociedad - was, in my opinion, the most likely of the three selections to have goals. Therefore, I had it in my mind that I was going to trade this game with a separate strategy to the original acca in the hope of recouping the £45 already lost. Coincidentally, senior member Ian posted an interesting strategy on the same game not a million miles away from my own thoughts. I backed 2-1 / 1-2 / 2-2 and after Levante went 1-0 up added 3-0 @ 22.0. The total stake on this "second" trade was £20 effectively increasing my overall laibility on the night by an additional 50%.
Levante ended up 3-0 winners so Ian (I did wish him all the luck in the world with his improvised, imaginative effort) and I came out ahead. See image below.
There is the rather unfortunate post script to this tale. Making a decision - not lightly taken - to increase liabilities is, as previously stated, a tricky matter. To ask fellow members in the chat room to follow you on this slippery path is even harder. So my apologies to those in the room for not posting this additional trade that on this occasion did get me out of a hole.
In 1984 England beat Turkey 8-0 in a World Cup qualifier, a game I remember well as I had £25 @ 100/1 on the Correct Score. It was a lot of money to me in those days. It was also a huge scoreline, one that is rarely replicated in the modern age in which we often hear the phrase "there are no easy games any more".
I was reflecting on this after the Spurs v Swansea match at the weekend which ended 0-0 and I suffered a full 100% loss on a trade in which I had backed several high scorelines, 3-0 & 3-1, to the heavy odds-on favs Spurs. Swansea had come to White Hart, er sorry, Wembley, with the sole intention of parking the bus, i.e basically not playing.
As one of our resident pro traders, Ian, wrote in a email to me after that game, "....... there are so many instances of sides being prepared to concede massive percentages of possession and territory and do nothing other than set up to dig in and hold on". He continued in a slightly more emotive vein that "Personally, I found Swansea's performance disgusting. As a supporter of a lower ranked premiership team myself, I can honestly say that I would rather see my team make some attempt at active involvement in a game even if that was a tier lower, than watch them adopt this nihilistic destructive attitude that makes a farce of the beautiful game".
As traders we know the dangers of becoming too emotional can lead to lack of focus, poor decision making, a loss of rational persepctive. Ian recognised this and correctly reflected on how we, as traders, can take advantage:
"What it does do - I think - is create trading opportunities from a completely different angle. Where as traditional thinking has us looking to trade on the assumption that goals will come (a) fairly early and (b) in reasonable number, it should be possible to identify matches where the imbalance of ability is so great that it reduces the favourite's chances of winning rather than enhancing them.
Stats may have had Spurs ready to put 3 or 4 past Swansea, but Swansea's immediate and obvious lack of any desire to win changes the perspective. What I am looking at is the fact that possession is no longer a factor in games where it is conceded so readily. Swansea held out specifically because they didn't have possession. They didn't have to force things. They didn't have to do anything other than position themselves and react. In those types of games trading on the fact that the favourite will have to work specifically very hard to get a goal in front, we perhaps look at a trade which lays the AOHW initially with a view to securing some profit in the first half which we can leverage".
With those wise words in mind I looked at the PSG v Lyon game on Sunday evening. Pre match Over 2.5 was trading @ 1.24, PSG in Match Odds @ 1.19, AOHWIN @ 2.32. A quick bit of research showed that of the 19 goals PSG have scored in the league so far this season, 15 have come after the HT interval (79%), with just four (21%) netted in the opening 45 minutes of matches. As James Eastham, a pundit with betting.betfair puts it: "This is partly down to the way PSG and their opponents play: while Neymar and co. dominate possession from the start of matches, the opposition focus almost exclusively on putting up resistance, and do so successfully for some time, only to eventually be ground down by PSG's relentlessly superior technical skills". The game mirrored these thoughts exactly with the score at HT 0-0 and PSG ending up eventual winners 2-0.
So next time you see those skinny prices in games involving the likes of Real Madrid, Barcelona, Bayern Munich don`t think a goalfest, consider the opposition. Think contrary!
Switzerland has given the world cheese with holes in it, clocks, dodgy banks and quite a good tennis player. It is also the home to member Nivek who has been part of the LTF community for many years. His participation has been fractured during this time due to the arrival in his household of twins but like the aforemonetioned Roger Federer who also became a father to a couple of sprogs he has bounced back from parental duties to lead the charge once more in the trading room.
August was a particularly fruitful month for Niv both in quality & quantity of trades posted. Typically using small stakes of around €10 euros per trade he made over £100 which is a fantastic return in terms of ROI.
£15 on its way Sir!
SMARKETS - A SMART MOVE
Smarkets entered the betting exchange arena in 2008 and, along with Betdaq, its predecessor, have remained behind Betfair in terms of client base numbers and consistently better liquidity. You need players and their money so Smarkets have for a while now been attracting new customers with its "Matched Betting" promotion drive. Why pay 5% commission when you can do it for 2%?
For an excellent article on Smarkets + Matched betting please go here
To join (see list of prohibited countries) using referral code: yugo04
FREE TRIAL: Come and join our experienced & supportive live trading football communityhttps://t.co/i6z7De5IXA pic.twitter.com/CVN2jbLmzP— tradingfootball (@footytraders) August 1, 2018
FREE TRIAL: Come and join our experienced & supportive live trading football communityhttps://t.co/i6z7De5IXA pic.twitter.com/CVN2jbLmzP
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