I continued trading football odds today at Betfair after successfully trading Champions League yesterday. Five Europa League games got my attention this morning due to the drifting or dropping odds appearing in the graphs. Unfortunately several stop loss limits were hit today and I had to cut my losses early on. What’s even worse one of my trading position would have turned out a large winner, if the stop loss was never hit. Yet, a single winner was enough to make up for the 3 lost trades, leaving just one losing trade in the total profit and loss screen. I let that winner run and eventually managed to avoid losing more than what I made yesterday, showing a profit in the last 2 days.
Cut your Losses
Beginning with the unfortunate events, the trades that lost me money were executed in the following games: AEL vs Mgladbach, Young Boys vs Liverpool, Hapoel Tel Aviv vs Atletico Madrid and Dnipro vs PSV.
AEL vs Mgladbach
AEL’s odds were dropping fast when I first accessed the market. I backed AEL at 3.25 willing to follow the trend. AEL’s dropping odds reversed and almost touched 4.00 before going back down to 3.65 where I traded out. My mental stop loss was in fact placed just above the initial peak, but I missed that up trend and was lucky enough to trade out at considerably lower odds. I also failed to red up correctly due to a sudden odds movement when trading out.
Young Boys vs Liverpool
Again, Young Boys’ dropping odds from 3.50 to 2.80 convinced me to back (short sell) the home win targeting to lay (buy to cover) at 2.50 or lower. The sudden upwards spike though turned on the alarms and I cut my losses earlier than expected.
Hapoel Tel Aviv vs Atletico Madrid
Now this is my best trade of the day, I thought. Hapoel’s football odds were dropping for days and Atletico Madrid had become a huge drifter, pushing the odds from 1.60 to 2.00! Instead of backing the steamer’s odds, I elected to buy Atletico’s since the liquidity was enormous on the favorite team and I could get my bet easily matched. Boy, was I for a surprise! I laid Atletico’s win at 1.92 during a seemingly pullback. The double top got me worried and when I later revisited the market, the odds had already approached my stop loss at 1.80. That is a fine example of cutting your losses when your prediction is wrong, as I would have lost twice the amount, should I have waited for an up trend’s resume.
Dnipro vs PSV
This part of Betfair trading is called: “Stopped out before the market verifies your prediction”! Dnipro – I honestly haven’t heard of this team before – was becoming a steamer while PSV Eidhoven’s odds were climbing to new highs. At first the best entry point would have been at 3.25 but as I wasn’t going to be stuck in front of the monitor for hours, I quickly backed Dnipro’s win at 3.05 and set the stop loss close to 3.50. If the resistance level at 3.3 failed, I was determined to cut my losses. And that’s what happened when the odds penetrated – only for minutes – the resistance level. However, the trend resumed and this trade would have been a big winner if I hadn’t traded out. Been there, done that numerous times, but it still is a heart-breaking phenomenon in trading online.
Let Winners Run
Fortunately trading Maritimo’s odds saved somehow my poor football trading performance of today. This time trend following was proven a profitable trading strategy and completed a short trade between 2.36 and 2.10, taking advantage of the predicted down trend. Given the trend’s strength I initially set my profit target at 2.02 where I would have made about 65 euros, but with 5 minutes left before kick-off, I decided to trade out and begin writing this post. Perhaps I could have left this winner run for a couple more minutes. Hopefully it was worth it.
Cutting your losses and letting winners run. That is one of the most common advice you’ll hear in online trading. The advice applies in Betfair trading as well, where you need to cut your losses when there are indications your prediction is wrong and let winners run when there is no slowing down of the trend or any reversal signals. Usually a single profitable trade should compensate for three losing ones but you can come up with any other ratio, as long as your winning percentage justifies it.
So, it seems I’m discussing a lot about football trading lately, a part of Betfair trading where I’m not that experienced. Is this also new for you or do you consider yourself an experienced sports trader? If so, do you focus on your losses or are you mainly concerned about winners? Let me know in the comments below!