Review 2014

With the Davis Cup win of Switzerland (Yes we did it!!) the tennis season is over. So, it's time to write a review of the trading year 2014. I can divide it in three stages.

First stage
The end of the year 2013 was quiet disappointing. I couldn't succeed at the Sultan's Trading Academy, and I was clueless about tennis. So I decided to switch to NBA trading. The first months of the year I traded basketball. After a promising start things turned bad in the early spring. Beside I didn't like to stay awake the whole night to watch some big guys playing with a ball. I decided to return to tennis...

Second stage
In May I was contacted by a guy. He told me that he is a professional sportstrader. At this time I was without big hope to succeed, and I was happy to meet "an expert". I trusted him and we traded together (over Facebook messenger). I transfered big money to his account for beeing part of the trading team which work with a self programmed software. Unfortunately he was just a liar, and he scammed me. I met in the wrong time, the wrong person. If I would meet him earlier or later, it would not happen. After he was not willing to pay me the money back until the beginning of November (despite he promised it like two or three times), I made a final stroke under this bad story. Shit happens in life (I am healthy, have good friends and a nice family... so the financial damage is not the end of the world), and I am sure that 2015 will bring some nice developments in my life.

Third stage
With a reader of this blog and meanwhile a good friend, I started a serious project (Ultimo) about tennis trading. We collected data, wrote a strategy guide and are improving our trading skills on the market. We are not yet over the mountain, but the progress is obvious. The discipline rised, the strategies are proven by Sultan (we have like a Sultan+ guide) and the data collection gives us a good overview about the patterns in the market. So far we documented around 200 tennis matches, more will follow in 2015.

I would say that the 2014 was a rollercoaster like you are looking for at tennis matches. Unfortunately you don't wish that in your personal life. I am sure that the worst part is over. Beside trading happened some unpleasant developments as well. I don't want to go in details, but there were serious problems at my part time job and my living situation after I sold my appartment. Both topics will be solved in 2015. More you can read in my next post, where I will write a preview for 2015.

Learning process continues...

Disappointing ATP finals find their end with the withdrawal of Roger Federer. I expected more fights and more volatility in the market. At least the tournament showed that I am on the right track. Despite the low number of momentum changes, I didn't lose much. Without the mistake, which I made in one of the first matches (Djokovic vs. Cilic), I would end in the green zone.

In general I recognized two problems: Overtrading and the lack of compounding. I added in the strategy guide a chapter about reinvestments. It's a good mix between trading save (no compounding) and aggressive. In my opinion is necessary to work with the greens. If you just leave the trade after a break, you don't make enough money to cover the matches without the expected swings.

The second problem was too much speculation. I hoped for some surprises, but they didn't come. It's a typical form of overtrading. Instead of waiting for a better scenario, I layed some big favourites. Especially in the case of Djokovic is better to wait. Even a price of 1.10 can implode after a break. Fortunately Nishikori fought back, but instead of making a huge profit (waiting for a better price), I just make some bucks. Earlier in the week I lost even more with Nole. I was confident that Cilic can give him a fight, but it was a onesided match like many more. Unfortunately the stop losses didn't work, so i lost the whole stake...

Excluded the Davis cup and some challenger tournaments the season is over. At the start of the year I hoped for the real breakthrough in 2014. To be honest, I am still waiting for it. I am happy with the development since September. With the start of the project "Ultimo" things began to go in the right direction. It's still a long way to go, but after the (scamming) lowlight in the summer, I see light at the horizon. The 2015 will be the decisive year!

Strange ATP world tour finals

The best tennis players of the world (excluded injured Rafa Nadal) are playing this week the final tournament of the year. You would expect a lot of exciting matches with close scores. So far the ATP tour finals were disappointing. It seems that the season was (too) long for some players. Cilic is completely out of shape. Raonic is serving so bad like never before this season. Murray seems tired of the last six weeks, where he played a lot of matches. Berdych had his worst match this season in the opener against Wawrinka. Stan continues with his up and down season. After a strong performance against the bird, he was looking (after a great start) awful today. Only Federer and Djokovic play on a good level. I am quiet sure that they will be in the final at the end of the week.

The mentioned matches didn't bring good trading opportunities. In such times you have to cut losses or even better to stay away of the markets. I made some mistakes, but in general I am happy about my discpline. Only once I lost more than I should. I underestimated the downfall after a break... so my stop loss orders were useless.

If the needed swings are not coming, it's important to stay patient. I guess that this week was tough for more experienced traders as well. The only halfway tradeable match was Nishikori vs. Murray. There I made a small green. It would be bigger if the Scot would win the second set.

Right now I am thinking about entries during a game. So far I executed the strategies like Sultan. He doesn't open a trade while they are playing. I recognized that there are scenarios, where you can find value during a game. For example when the loss of set is almost priced in, and a player has one or two breakpoints for a second break. Of course you lose two or three ticks when the leader breaks, but if not, you have almost unlimited upside potential. Value is value and it doesn't matter, when it occurs. If you limit your entries to the end of games, you limit your opportunities. It would be like you only buy stocks in the beginning of the day or week... in the reality you buy or sell them when the price is good.

Finally...

It was a tough (trading) year so far, but finally the hard work and suffering seem to pay off. I focused last week on the tennis tournament at Paris-Bercy. I traded almost every day and the result looks quiet promising:

 

One year ago I was a member of Sultan's Trading Academy (STA). In a review I would say, I was not ready at this point. To be honest, I would say the STA is nothing for rookies. It's hard to understand his value approach without a decent market and player knowledge. It can open doors, but you should not be disappointed, when you don't succeed. It needs a lot of hard work and own reasearch to make the breaktrough.

Unfortunately I met in the spring 2014 the wrong person. Instead of hard work (I do now) I thought there is a free lunch. In the end I had to recognize that I was a victim of a big fraud. If you like to succeed, you have to do your own research. Since two months I work with a partner in a serious project (http://brucelaytrading.blogspot.ch/2014/09/project-ultimo.html).

We recognized that the Sultan strategies are a really good base. Actually I didn't want to use them anymore because I was not successful. Our analysis showed that I failed mainly because of the lack of market knowledge. Unfortunately this part is not that well described in the guide.

What did we do? We implemented a huge database with different information about price levels, scenarios and outcomes. Now value seems more "visible". We know the situations which have a good risk-/reward ratio. Beside we added some new strategies to the package of Sultan. All together we are talking about 20 (Sultan has 14). In the beginning it was looking like an overkill, but now it's getting more and more clear when you have to execute which one.

All in all I am very happy with the progress. The profit of 56 Euros seems not that much. Like some readers supposed I lowered my stakes. Before I worked with ten time bigger stakes and the "business model" shows that factor 100 is possible in the long term. How sounds 5'635 Euro profit in just one week?! I would say fantastic!

What are the next steps? We are implementing a trading controlling to improve our trading skills. In the end it's (almost) all about experience. The professionals are talking about 10'000 hours on the ladders to have the necessary knowledge to succeed. I feel more and more that this is true. Every week my confidence is rising. Beside the controlling we will concretise the strategy guide. Here I see the biggest lack of Sultan's trading guide. He is referring to value, but the description of the most common scenarios is completely missing. For him this is not a problem (because is in his mind), but for a third party it's evident.

Until the end of the year I will keep the low stakes. I look forward to the next season. First time I feel really ready for it. Perhaps there is one exception... unfortunately of all things I am a bit afraid of ATP Grand Slam tournaments. With five setters I don't have much experience. Perhaps I will focus at the Aussie Open at the WTA competition until I feel more confident with five set matches.

Until then there is much time to go with some highlights: ATP World tour finals, Fed Cup final and Davis Cup final between France and Switzerland.