I was left feeling extremely frustrated on Thursday night, and it had nothing to do with the good lady wife professing to a headache. No, it was the result of the trading I'd executed in a tennis match in Chile between a geezer called Souza and another geezer called Gonzalez.
Now I don't think I'm being unfair in calling Souza a tennis journeyman. I hadn't even heard of him before Thursday, truth be known. Gonzalez however, reached the giddy heights of being ranked No.5 in the world not that long ago, before injury rather set him back a bit (well, a lot, actually). Anyway, he obviously was the classier player of the two and having watched his match in the previous round I could see that he was playing well and figured he'd show his opponent a thing or three.
Of course pre-match, he was at what I perceived to be unbackable odds. After the first four games of the match though, during which Gonzalez didn't know which end of the racquet to use, his price had drifted rather. And as it went, I built a nice position, provided of course that Gonzalez would at some point remember that the strings were what he needed to be hitting the ball with. And after winning a couple of games in the first set to show signs perhaps that he was going to make a better fist of things, he promptly murdered his opponent in the openings to the second set to break twice and to look like he was going to squash Souza into the red Chilean clay.
Naturally, Gonzalez' price started to tumble, and the amount of my green started to rise. Happy days, or so I thought.
Now I remember posting a couple of weeks or so ago about the importance of discipline in terms of entry and exit points when trading. I've seen my mentor not enter the market for the sake of a couple of ticks. And it was with that mindset, with Gonzalez at 4-1 up in the second set, trading at 1.53, I decided to wait for my target price of equal or lower to 1.5 to be hit before exiting and banking my profit. For the mathematically challenged (like me), and for the emphasis, that's a change in price of 0.03. 0.03!!!!
Gonzalez lost his service game. And he didn't break back. And he lost his next service game too. He had gone from looking like an amalgam of the best bits of Bjorg, McEnroe, Sampras, Federer and Djokovic to playing like Gunnosaurus, the 7'6" Arsenal dinosaur mascot - wearing flippers.
So with the score at 5-4 to Souza, who was already a set up, I took an opportunity to exit for a small loss. A small loss after being 0.03 away from an exit point for a very nice profit. What a bell-end!
If there are any more experienced traders reading this, I'd love to know their thoughts. My trading guide suggested (very politely, I thought, that perhaps it would have been sensible to take the 1.53). He did acknowledge though, that with the player I was on playing like a dream, 4-1 up in the set, on serve, perhaps I wasn't being that unreasonable in hoping to go below that 1.5 target.
To my mind, on reflection, I would suggest that I got into my anally retentive mode, as I tend to do when it comes to gambling and trading, trying to do everything exactly by the book. I showed the flexibility of a splint, just because I was so hung up on doing everything "properly". I mean, come on...0.03!?!
I should point out, I was flying solo on this one. This wasn't a match or trade that the BetfairGuru was concerned with, so I was making my own decisions.
What a shame.
Oh boy, it's good to know I wasn't the only one who got stung in this game! I had a large green on Gonzo and was fully prepared to let the whole trade run, at least into set 3. I think where I differ from you is that I am more flexible in my approach. I don't have set exit points based on exact prices. I use my intuition and game reading to make that decision, which is something I much prefer to do as every game is different - though of course, there's no right or wrong way, just waht you are comfortable with.
ReplyDeleteSo I am not so pissed off that I missed out on the green because that's the way I trade. Just one of those things; who would've seen Gonzo throwing away a double break up? The only important thing is that you exit for as little loss as possible.
I think it's important that people don't feel they have to copy everything their 'guru' tells them anyway. Trading styles are very personal and not everything you learn will be something that suits you.
I think hindsight makes it much easier to say you should have taken 1.53. I suffered the exact same issue in the Karlovic/Youzhny match the other night, I managed to get equivalent odds of 2.26 matched on him just prior to the first tiebreak and when he had set point he got down to (I believe) 1.26, but whatever the price was I remember thinking that really it wasn't a great price and that a couple ticks lower was a fairer lay price, sure enough it wasn't matched and he went on to lose that tiebreak. Now, admittedly I made things worse for myself by continually backing Karlovic in that tiebreak and although I had a strong green position up until 9-8 I decided that would be when Youzhny would get a mini-break, when he didn’t I lost my bottle and before I knew it he did win the set and I was looking at a massive loss. Again with hindsight it is easy for me to say what I should have done but I’m fairly comfortable with my approach in general and I’m inclined to look back and think in this case it was more a case of poor luck than judgement.
ReplyDeleteBack to your situation and without knowing your strategies etc it is hard to comment constructively but again relating it to me and I’m happy to have an exposure of up to 4, in rare circumstances 5 full stakes and I’m quite selective at what price I’ll take with my initial position. When I want to exit a position I’ll often be not quite so selective and whilst I still take to look a good price as long as it presents some value I’ll take it. This normally because of the inherent ‘opportunity cost’ that holding a position with little movement holds. By this I mean that if a price has a lot further to go against me than for me then by holding on to my current position I can potentially be costing myself the chance to make money. This is often the case when a player is a double break up, the odds on that player can’t go too much further down but a long way to go back – either in the current set or next. You eluded to something similar in the first set of the Gonzalez match where he was nowhere to be seen and a double break down and the market was panicking against him pushing Souza’s price down as low as 1.3 which incidentally was essentially Gonzalez’s starting price. At that point it only really had only one way to go, yes Gonzalez could have retired but if that had been before the end of the set it was a void market anyway. It was the same situation in the second when Souza looked equally poor but realistically Gonzalez’s price was only going to drop another 10 ticks at most.
The other point I would make is it seems as though the 1.5 price was perhaps a symbolic milestone either that it was a round price or it gave you a round all green profit, as opposed to being what you thought the fair price was at 4-1 in the second? Again, I can’t really comment on your strategy without knowing it but I would say that more often than not, that kind of approach is going to get matched when it is a poor price. Of course the advantage it might have is that of ‘opportunity cost’ again, as not monitoring the market gives you the time to either concentrate on other trades and/or perhaps spend time doing more fulfilling things such as spending time with your family.
Anyway, the best bit about tennis is that there are so many matches each week that there is plenty of time to make up for lost opportunities, make back losses and compound profits. Best of luck.
Thankyou very much for your thoughts, chaps.
ReplyDeleteI will respond properly as soon as I can.