In the beginning of his trading guide Sultan quoted Dr. Alexander Elder from 'Come into my Trading Room':
"Amateurs look for challenges; professionals look for easy trades. Losers get high from the action; the pros look for the best odds."
To be honest, I didn't understand this sentence in the beginning. Now I do. How I wrote some days ago, I started a partnership with a professional trader which reached the premium charge of Betfair long time ago. I found out that he is cooking with water as well, but he acts a lot better in the crucial stages of a trade (mainly entry- and exit-points). It's the same thing in tennis games. Rafa and Nole are not that much better than a Top50 player, but in the most important points they can rise their level. On the other side the underdog starts to make mistakes.
Let's go in an example: Today played Ana Ivanovic vs. Serena Williams. The starting price of Serena was 1.25, pretty low in my opinion. On the other hand Williams wins this matchup on a normal day, but some months ago she lost at Australian Open even with a one set lead.
What will do the amateur? He will back Serena since the start, because he is confident that Serena will win. He risks 100 Euros for a profit of 25 Euros. After the first set is looking like an easy bet without much sweat, but Ana is a different player after the break and wins the second set with 6:3. Now the amateur gets worried, the price is already 1.40... in the end he wins the bet, but was a challenge which is not necessary.
What will do a novice? He heard about the value concept and thinks that 1.25 is quiet a low price. So he puts a lay bet since the start. With the same risk of 100 Euros, he can make a profit of 400 Euros (16 times more!). After the first set, the trade is not looking good. Half of the money is gone. Now he has different options. Let's say, he will stay in the trade (if he has balls). So, he would make a nice profit after the second set (if he hedges). The sweat is more or less the same like the amateur has, the difference is the better risk/reward-profile (because Ana was value). Instead of 25 Euros, he can win 400 Euros.
What will do the professional? He knows how strong Williams is and doesn't need the risk to see one way traffic (backing 1.25 is no option for the professional neither). He just enters when the market gives an opportunity. This can be a higher price for Williams or a very low one (for laying). After the first set he lays Williams for 1.10 (for a possible win of 1'000 Euros). If Ana would win the first set, he would enter (or wait a bit more) to back Serena. He trades the market not the players.
Like Dr. Alexander Elder said, professionals are looking for easy trades with good odds. It's quiet easy to lay Williams at 1.10. The risk/reward-profile is brilliant. If Ana wins the first set, he still can enter the market for a comeback (because Williams has the weapons to beat Ivanovic even with a set and break down).
That's just an example, but that's the reality. The professionals are patient. Before the start (especially in the case of the top players) the market is very efficient. There are barely no hidden information. During the match people start to panic, emotions are in the market. Overreactions take place. That's the paradies for the professionals because they are just waiting for this scenario. If there is no such situacion the pros are not involved. At tennis you only have to win the last point of the match. The other ones "don't count" in the end. With this knowledge the professional traders stay calm like Djokovic or Nadal and wait for the right opportunity. If there is one way traffic of the favourite they will not enter the market.
In theory it's quiet easy to trade like this. In reality it's more difficult, but is good to know that the professionals are cooking with water too. They have no crystal ball neither. :-) My partner says that I am like Dimitrov, talented but not proven in big moments. Let's see if the Baby Federer will be one day a real Fedex...
"Amateurs look for challenges; professionals look for easy trades. Losers get high from the action; the pros look for the best odds."
To be honest, I didn't understand this sentence in the beginning. Now I do. How I wrote some days ago, I started a partnership with a professional trader which reached the premium charge of Betfair long time ago. I found out that he is cooking with water as well, but he acts a lot better in the crucial stages of a trade (mainly entry- and exit-points). It's the same thing in tennis games. Rafa and Nole are not that much better than a Top50 player, but in the most important points they can rise their level. On the other side the underdog starts to make mistakes.
Let's go in an example: Today played Ana Ivanovic vs. Serena Williams. The starting price of Serena was 1.25, pretty low in my opinion. On the other hand Williams wins this matchup on a normal day, but some months ago she lost at Australian Open even with a one set lead.
What will do the amateur? He will back Serena since the start, because he is confident that Serena will win. He risks 100 Euros for a profit of 25 Euros. After the first set is looking like an easy bet without much sweat, but Ana is a different player after the break and wins the second set with 6:3. Now the amateur gets worried, the price is already 1.40... in the end he wins the bet, but was a challenge which is not necessary.
What will do a novice? He heard about the value concept and thinks that 1.25 is quiet a low price. So he puts a lay bet since the start. With the same risk of 100 Euros, he can make a profit of 400 Euros (16 times more!). After the first set, the trade is not looking good. Half of the money is gone. Now he has different options. Let's say, he will stay in the trade (if he has balls). So, he would make a nice profit after the second set (if he hedges). The sweat is more or less the same like the amateur has, the difference is the better risk/reward-profile (because Ana was value). Instead of 25 Euros, he can win 400 Euros.
What will do the professional? He knows how strong Williams is and doesn't need the risk to see one way traffic (backing 1.25 is no option for the professional neither). He just enters when the market gives an opportunity. This can be a higher price for Williams or a very low one (for laying). After the first set he lays Williams for 1.10 (for a possible win of 1'000 Euros). If Ana would win the first set, he would enter (or wait a bit more) to back Serena. He trades the market not the players.
Like Dr. Alexander Elder said, professionals are looking for easy trades with good odds. It's quiet easy to lay Williams at 1.10. The risk/reward-profile is brilliant. If Ana wins the first set, he still can enter the market for a comeback (because Williams has the weapons to beat Ivanovic even with a set and break down).
That's just an example, but that's the reality. The professionals are patient. Before the start (especially in the case of the top players) the market is very efficient. There are barely no hidden information. During the match people start to panic, emotions are in the market. Overreactions take place. That's the paradies for the professionals because they are just waiting for this scenario. If there is no such situacion the pros are not involved. At tennis you only have to win the last point of the match. The other ones "don't count" in the end. With this knowledge the professional traders stay calm like Djokovic or Nadal and wait for the right opportunity. If there is one way traffic of the favourite they will not enter the market.
In theory it's quiet easy to trade like this. In reality it's more difficult, but is good to know that the professionals are cooking with water too. They have no crystal ball neither. :-) My partner says that I am like Dimitrov, talented but not proven in big moments. Let's see if the Baby Federer will be one day a real Fedex...
What a post Brulati!
ReplyDeleteI really enjoy reading your blog, your genuine way to relate things that you feel "at the moment". I'm also a sport trader but i've not reached "yet" then premium charge level. ;-) . I've quite made the same experiences you make.
And the question are: how to get finally the killer instinct, how to make the right decisions? Don't be afraid to make errors. Get the feeling that every trade you start will be a good one. Be convinced of what you are doing otherwise all the methods, strategies you use and the talent you have are just half as good as they are. Just do it. Good luck Brulati.
PS: I'm living in Basel and of course FCB-Fan. May be we will meet us once.
Thanks a lot for your feedback! Premium charge level is far away for me... just a very few punters are that good to reach the PC.
DeleteIt's a question of confidence. Good traders are not afraid to lose, because they trust in their long term edge. Beginners play too risky when they have a bad position and act too cautious with a green trade. It's really hard to overcome this pattern. Natural instinct leads us in the wrong direction, that's why 98% of bettors lose in the long term.
Yes, I am a FCB-Fan too. Lately I was not always happy about the club (too much hooligans and fireing MY), but you don't change your favourite team like panties. I am supporter since 1980. Why not, we can meet us one day. You can contact me direct with email (brulati@gmx.ch).