Categories
Football Horse Racing Trading Psychology

What Is A Trading ‘Edge’ and How Do You Discover Your Own?

[vc_row][vc_column css=”.vc_custom_1498427789377{border: 1px solid #cecece !important;border-radius: 1px !important;}”][vc_column_text]When you first start on your trading journey you’ll keep hearing the pro-traders saying stuff like ‘you need an edge in the markets’, ‘find your edge’, ‘determine your edge and you will become profitable in the markets’. I’m sure, like me, when you first started out you were confused as to where you could find this edge and just wanted someone to just tell you what and ‘edge’ was!

I remember googling to find the definition of what an edge was – it frustrated me to find there was no simple answer! After a year of trading I now know exactly what someone is talking about when they’re talking about an ‘edge’.

Put simply your ‘edge’ is a piece (or multiple pieces) of information which gives you more knowledge about a market situation than other market participants.

An edge can also come in the form of skill level or a psychological trait. For example, having the ability to stop yourself from overtrading.

But the real edge of a trader comes from their mental capacity to control their emotions, feelings and ability to execute their trading plans.

Here are some sport-specific examples of edges:

Examples of an Edge in Horse Racing Trading

TV Pictures Example

In Horse Racing an edge may be that you have TV pictures. Say you’ve subscribed to RacingUK and you’re watching the horses mill about at the start before a jumps race and you can see that one horse is playing up badly. Many of the market participants may not know this information because they’re not watching TV pictures, but you do, and as such you lay the horse and as the price drifts you back it at higher odds in order to hedge up.

Or

L2B (Lay to Back) Example

You’ve done your morning research on potential L2Bs on the day’s horse racing using Proform’s BetFinder and spot that an opportunity has come up with a certain horse having been backed in way below what Proform’s BetFinder tool would consider value. You also know that the horse is not an angle for pace and decide to lay it just before the off. The horse does as you expected and the odds rise in-play, you hedge up for your profit – winning no matter the outcome.

Football Example

Overs/Unders

Everyone’s expecting goals galore in the big match this weekend and this is reflected in the price, but because you researched the game on Football Form Labs you believe that statistically there is actually a higher probability of the game having Under 2.5 goals. You back Under 2.5 goals at the start of the match and hedge when the odds have reached your target or pre-defined profit level.

Other Examples of an Edge:

  • Taking your losses before they get too big
  • Having done prior research
  • Shorter delay in ‘live’ TV pictures
  • Controlling your emotions
  • Having the control to not overtrade
  • Well controlled bank/stake management
  • Experience
  • Using trading software
  • Being selective about the type of markets or horse races you’re going to trade and having a deep understanding of the market dynamics – ie, specialising in one race type such as maidens only, focusing on the unders/overs markets specifically
  • Being a courtsider
[/vc_column_text][vc_video link=”https://youtu.be/GrWWjNtdt5I” el_width=”90″ align=”center”][vc_column_text]See? An edge can be as simple as that. An example of those without an ‘edge’ would be punters sticking a bet on a match outcome or a horse because that’s their ‘gut feeling’.

The most important thing with an edge is that is applied consistently and proves to bring you profits in the long term. This is where the real edge of a trader comes from.

Lastly, to define your edge you’ll initially want to focus on one or two markets and become aware of that market’s dynamics. For example, if you wanted to focus on trading the Overs/Unders or Correct Score markets in-play then you would need to be fully aware of how ‘Time Decay’ influences the odds movement in this market.

The more you specialise in something the more you will have an edge over that market. Thankfully there are lots of tools on SportsTradingTools.co.uk that have an in-built edge that you can tap into and use to help you develop your own edge so you begin to profit from the markets.[/vc_column_text][vc_cta h2=”Sports Tool Overview” txt_align=”center” color=”white” add_button=”bottom” btn_title=”Click Here to Discover Your Edge” btn_style=”3d” btn_color=”warning” btn_size=”lg” btn_align=”center” btn_i_align=”right” btn_i_icon_fontawesome=”fa fa-mouse-pointer” btn_button_block=”true” btn_add_icon=”true” css=”.vc_custom_1501077079524{border-top-width: 5px !important;border-right-width: 5px !important;border-bottom-width: 5px !important;border-left-width: 5px !important;background-color: #81d742 !important;border-left-style: outset !important;border-right-style: outset !important;border-top-style: outset !important;border-bottom-style: outset !important;border-radius: 5px !important;}” btn_link=”url:http%3A%2F%2Fwww.sportstradingtools.co.uk%2Fsports-trading-tools-overview%2F|||”]

  • See a quick overview of every Sports Trading tool listed on the website (including Horse Racing, Football and Software)
  • Find out the edge they provide their users with in the markets
[/vc_cta][vc_column_text]There are many ways to define an edge, be it information over the market, your trading style, your research process.

What would you consider to be your edge? (No need to give away any specifics!) Comment below.[/vc_column_text][/vc_column][/vc_row]

 
Categories
Horse Racing Trading Psychology

The Psychological Pitfall of Reading Adam Heathcote’s Blog

[vc_row][vc_column width=”2/3″ css=”.vc_custom_1498050547697{border: 1px solid #cecece !important;border-radius: 1px !important;}”][vc_column_text]Adam Heathcote came to prominence in 2008 when he started a blog challenge to make £150,000 profit in just one year from trading the Betfair pre-race Horse Racing markets. Not only did he achieve it but he smashed it so much he had to raise his goal… twice! Firstly to £250,000 and then finally £350,000.

As you can imagine, Adam caused quite a stir within the sports trading community as everyone wanted to know how a 24-year old could become such an expert and make profits that some professionals can only dream of.

Here is Adam’s screenshotted profit and loss overview. It is quite staggering how quickly he was able to scale up.[/vc_column_text][vc_single_image image=”1636″ img_size=”full” add_caption=”yes” alignment=”center” style=”vc_box_border” onclick=”link_image”][vc_column_text]

Adam’s Blog

You can find Adam Heathcote’s blog here: http://adamheathcote.blogspot.co.uk/. The link provided even takes you to the first page so you can read through it from the beginning – it really is a fascinating read. Whilst Adam doesn’t give too much of his knowledge away he does reveal some titbits of information that are useful for beginners to learn.

Adam had already made a substantial amount from trading Betfair before he started the blog and you must keep it in perspective that a lot of hard work in learning trading is not talked about in his posts. Plus, I’d hazard a guess that his degree in Computer Science may have laid a lot of the groundwork for his analytical thinking which undoubtedly would have helped him grasp trading more easily than your average person. His first foray into trading was in 2007 where he attended a Peter Webb course.

Many people questioned whether Adam Heathcote was real, or whether he was a marketing ploy by Bet Angel – Peter Webb’s Betfair trading software company. I very much believe Adam and his results are real and believe the alternative claims were just jealousy on many people’s part. If you want proof that Adam Heathcote exists he appears in a video for one of his friend’s series called ‘Blag A Million’.[/vc_column_text][vc_video link=”https://www.youtube.com/watch?v=UwevwGUTIi4″ el_width=”90″ align=”center”][vc_column_text]In the video, Adam makes £1,225 in the space of an afternoon. It all sounds so great – doesn’t it? Cue the dreams of you making that much money when you get good enough at trading.

I hate to rain on anyone’s parade, but there are many pitfalls to this way of thinking – and reading the Adam Heathcote blog can do more harm than good for beginners to this game.

The Psychological Pitfall for Newbie Traders Who Read Adam Heathcote’s Blog

A lot of traders read Adam’s blog at the start of their journey and get so excited by it that they set themselves a challenge.

I did. And I’ll freely admit that I failed.

What I didn’t know at the time was the psychological edge a Betfair trader of this level needed. I fooled myself into thinking that I could learn sports trading within 9-12 months and be proficient to the point where I was making astronomical profits. Why am I telling you this? Quite simply I don’t want you to make the same mistake yourself.

For most people, giving yourself a financial target is a foolish idea for a couple of reasons:

  • It puts pressure on you from the very beginning

The last thing you need is pressure when trading as you’ll make all the wrong decisions

  • It makes you think of your trading goals in financial gains

When you first start out trading, your goal – although it sounds rather counter intuitive – should not be about making money. It should be about learning the dynamics of the markets, ironing out your trading processes, getting your mentality right…and then focusing on NOT losing money. It was a lesson I had to learn the hard way – but you should always play the defensive game first when it comes to trading.

Adam Heathcote’s blog is meant to be inspirational, but it is not realistic – especially for those just starting out on their trading journey. Do not take it as standard that this is the level many people reach after a few years of learning the markets. Adam was an exceptional case by all standards.[/vc_column_text][vc_message message_box_color=”orange” icon_fontawesome=”fa fa-book”]Read the blog post: Trading Psychology: 5 of the Best Books for the 5 best books that help every trader overcome the psychological challenges that come with mastering trading. Mark Douglas’ Trading in the Zone is a must.[/vc_message][vc_single_image image=”1603″ img_size=”medium” add_caption=”yes” alignment=”center” style=”vc_box_border” onclick=”custom_link” img_link_target=”_blank” link=”https://www.amazon.co.uk/gp/product/0735201447/ref=as_li_tl?ie=UTF8&tag=nealmcp-21&camp=1634&creative=6738&linkCode=as2&creativeASIN=0735201447&linkId=7c051da80667370ffe3f4333aa3de2bf”][ult_dualbutton btn_border_style=”solid” button1_text=”Buy from Amazon” icon_link=”url:https%3A%2F%2Fwww.amazon.co.uk%2Fgp%2Fproduct%2F0735201447%2Fref%3Das_li_tl%3Fie%3DUTF8%26tag%3Dnealmcp-21%26camp%3D1634%26creative%3D6738%26linkCode%3Das2%26creativeASIN%3D0735201447%26linkId%3D7c051da80667370ffe3f4333aa3de2bf||target:%20_blank|” btn1_background_color=”#eaca7a” btn1_bghovercolor=”#eabd4b” icon=”Defaults-shopping-cart” icon_align=”right” button2_text=”Buy from iBooks” btn_icon_link=”url:https%3A%2F%2Fgeo.itunes.apple.com%2Fgb%2Fbook%2Ftrading-in-the-zone%2Fid357986493%3Fmt%3D11||target:%20_blank|” btn2_background_color=”#ffffff” btn2_bghovercolor=”#f1eafc” btn_icon=”Defaults-book” divider_text=”Or” btn_border_radius=”1″][vc_column_text]

So, what happened to Adam Heathcote after he hit £350,000?

Rather surprisingly, Adam gave up trading after a few years. From reading his blog and some other sources I think Adam had a larger goal in mind when he started making so much money and that was to start his own business. He also seemed to get annoyed at the unfair Premium Charge that Betfair introduced in 2009 which would have been taking a large chunk of his profits. His business is a health and wellbeing holiday company called Health and Fitness Travel which you can check out here http://www.healthandfitnesstravel.com.[/vc_column_text][vc_message]Links:

Adam Heathcote’s Blog: http://adamheathcote.blogspot.co.uk/

Adam Heathcote’s Business: http://www.healthandfitnesstravel.com[/vc_message][vc_row_inner][vc_column_inner width=”1/2″][interactive_banner banner_title=”Trading Psychology: The 5 Best Books” banner_image=”id^1604|url^http://www.sportstradingtools.co.uk/wp-content/uploads/The-Disciplined-Trader-Mark-Douglas-Book-Cover.jpg|caption^The Disciplined Trader – Mark Douglas|alt^The Disciplined Trader – Mark Douglas, Book Cover|title^The Disciplined Trader – Mark Douglas, Book Cover|description^The Disciplined Trader – Mark Douglas, Book Cover” banner_height=”ult-banner-block-custom-height” banner_height_val=”300″ link_opts=”more” banner_link=”url:http%3A%2F%2Fwww.sportstradingtools.co.uk%2Ftrading-psychology-5-best-books%2F|||” banner_link_text=”Read the Blog” banner_overlay_bg_color=”#4aa8c3″][/vc_column_inner][vc_column_inner width=”1/2″][interactive_banner banner_title=”The 3 Best Betfair Sports Trading Books for Newbies” banner_image=”id^1586|url^http://www.sportstradingtools.co.uk/wp-content/uploads/Mastering-Betfair-How-to-Make-Serious-Money-Trading-Betting-Exchanges-Pete-Nordsted.jpg|caption^Mastering Betfair- How to Make Serious Money Trading Betting Exchanges – Pete Nordsted|alt^Mastering Betfair- How to Make Serious Money Trading Betting Exchanges – Pete Nordsted|title^Mastering Betfair- How to Make Serious Money Trading Betting Exchanges – Pete Nordsted|description^Mastering Betfair- How to Make Serious Money Trading Betting Exchanges – Pete Nordsted” banner_height=”ult-banner-block-custom-height” banner_height_val=”300″ link_opts=”more” banner_link=”url:http%3A%2F%2Fwww.sportstradingtools.co.uk%2F3-best-betfair-sports-trading-books-newbies%2F|||” banner_link_text=”Read the Blog” banner_overlay_bg_color=”#4aa8c3″][/vc_column_inner][/vc_row_inner][/vc_column][vc_column width=”1/3″][vc_widget_sidebar sidebar_id=”gp-horse-racing-sidebar”][/vc_column][/vc_row]

 
Categories
Trading Psychology

Trading Psychology: 5 of the Best Books

[vc_row][vc_column width=”2/3″ css=”.vc_custom_1498050547697{border: 1px solid #cecece !important;border-radius: 1px !important;}”][vc_column_text]A key part of any trader’s edge is their mental ability to control their emotions and actions when trading. They say trading is 80% psychological mastery and 20% skill. The following 5 books will help you on your way to mastering your emotions in the market.

Trading in the Zone – Mark Douglas

Widely regarded as the go-to book for learning about learning the psychological demands of trading, Mark Douglas’ book ‘Trading in the Zone‘ takes the reader on a journey of reprogramming their current bad habits in the markets. 

If you’re at that stage of your trading where you’re still too impulsive and end up ruining perfectly good trades, or at the other end of the spectrum, letting your bad trades run then this book will help you on the path to eliminating these key errors.

Mark Douglas provides examples of how and why the mind works the way it does when encountering such psychological challenges that the markets can provide. The book is simple to read and understanding is gained through Mark’s excellent use of stories and allegories which likens the experiences of the market to real world experiences that we can all relate to.

If you’re looking to improve your understanding of how you react in the markets so that you can adapt and minimise the errors then this book is for you.[/vc_column_text][vc_single_image image=”1603″ img_size=”medium” add_caption=”yes” alignment=”center” style=”vc_box_border” onclick=”custom_link” img_link_target=”_blank” link=”http://amzn.to/2wy50R7″][ult_dualbutton btn_border_style=”solid” button1_text=”Buy from Amazon” icon_link=”url:http%3A%2F%2Famzn.to%2F2wy50R7||target:%20_blank|” btn1_background_color=”#eaca7a” btn1_bghovercolor=”#eabd4b” icon=”Defaults-shopping-cart” icon_align=”right” button2_text=”Buy from iBooks” btn_icon_link=”url:https%3A%2F%2Fgeo.itunes.apple.com%2Fgb%2Fbook%2Ftrading-in-the-zone%2Fid357986493%3Fmt%3D11||target:%20_blank|” btn2_background_color=”#ffffff” btn2_bghovercolor=”#f1eafc” btn_icon=”Defaults-book” divider_text=”Or” btn_border_radius=”1″][vc_column_text]

The Disciplined Trader: Developing Winning Attitudes – Mark Douglas

A different spin on ‘Trading in the Zone’, ‘The Disciplined Trader’ focuses on how to keep your cool, cut out the emotion and regaining the psychological composure that is the key trait of any consistently profitable trader.

With many of our habits of ill-discipline in the markets being formed by beliefs that are learned to function effectively in society this book explains why the profitable trader needs to learn how to become systematic in all aspects of their trading.

The book will show you how to understand your emotions in the markets and how you can create a mental structure to protect against the shortcomings.[/vc_column_text][vc_single_image image=”1604″ img_size=”medium” add_caption=”yes” alignment=”center” style=”vc_box_border” onclick=”custom_link” img_link_target=”_blank” link=”http://amzn.to/2uxH133″][ult_dualbutton btn_border_style=”solid” button1_text=”Buy from Amazon” icon_link=”url:http%3A%2F%2Famzn.to%2F2uxH133||target:%20_blank|” btn1_background_color=”#eaca7a” btn1_bghovercolor=”#eabd4b” icon=”Defaults-shopping-cart” icon_align=”right” button2_text=”Not currently available on iBooks” btn2_background_color=”#ffffff” btn2_bghovercolor=”#ffffff” btn_icon=”Defaults-book” divider_text=”Or” btn_border_radius=”1″][vc_column_text]

The Chimp Paradox – The Mind Management Programme to Help You Achieve Success, Confidence and Happiness – Prof. Steve Peters

Master the voice of the chimp inside your head, which often causes you to make highly irrational decisions with this ‘The Chimp Paradox‘ by renowned psychology professor, Steve Peters.

Whilst this isn’t a trading book, much of the information contained in it is perfectly applicable to the everyday life of a trader. This is one of the most interesting books I’ve read on psychology and will help you learn just how gaining introspection of your life outside of trading impacts your life in the markets.

Steve Peter’s has helped all manner of Sports Professionals and played a key part in Britain’s success at recent Olympics. It’s a fascinating book about mastering the voice inside your head and one that comes highly recommended.[/vc_column_text][vc_single_image image=”1605″ img_size=”medium” add_caption=”yes” alignment=”center” style=”vc_box_border” onclick=”custom_link” img_link_target=”_blank” link=”http://amzn.to/2vFcnKc”][ult_dualbutton btn_border_style=”solid” button1_text=”Buy from Amazon” icon_link=”url:http%3A%2F%2Famzn.to%2F2vFcnKc||target:%20_blank|” btn1_background_color=”#eaca7a” btn1_bghovercolor=”#eabd4b” icon=”Defaults-shopping-cart” icon_align=”right” button2_text=”Buy from iBooks” btn_icon_link=”url:https%3A%2F%2Fgeo.itunes.apple.com%2Fgb%2Fbook%2Fthe-chimp-paradox%2Fid482894788%3Fmt%3D11%26at%3D1000lybC||target:%20_blank|” btn2_background_color=”#ffffff” btn2_bghovercolor=”#f1eafc” btn_icon=”Defaults-book” divider_text=”Or” btn_border_radius=”1″][vc_column_text]

Thinking, Fast and Slow – Daniel Kahneman

Again, not a book specifically on trading, but one that will give you a deep understanding of how and why the mind works so often on an irrational basis.

One of the first questions novice traders ask any professional is “what trading books do you recommend?”. No surprise then that this very question was asked when I was on Peter Webb’s Masterclass course (you can read my review of that course, here). To my surprise, Peter didn’t mention either of Mark Douglas’ books above but instead recommended Thinking, Fast and Slow by Daniel Kahneman.

Admittedly, it is a long read and filled with high-level information so it’s one to take your time with. Give a chapter a read and then let it sink in over a few days and see where your cognitive biases are misleading you, and then go back to the book.

Alternatively, if you wish to gain an insight into whether the book is worth is worth a purchase (it is) then watch the Horizon documentary ‘How You Really Make Decisions’ with the author, Daniel Kahneman, on YouTube.[/vc_column_text][vc_video link=”https://www.youtube.com/watch?v=7Ha34Vu1zZo&” el_width=”90″ align=”center”][vc_single_image image=”1608″ img_size=”medium” add_caption=”yes” alignment=”center” style=”vc_box_border” onclick=”custom_link” img_link_target=”_blank” link=”http://amzn.to/2vEUT0v”][ult_dualbutton btn_border_style=”solid” button1_text=”Buy from Amazon” icon_link=”url:http%3A%2F%2Famzn.to%2F2vEUT0v||target:%20_blank|” btn1_background_color=”#eaca7a” btn1_bghovercolor=”#eabd4b” icon=”Defaults-shopping-cart” icon_align=”right” button2_text=”Buy from iBooks” btn_icon_link=”url:https%3A%2F%2Fgeo.itunes.apple.com%2Fgb%2Fbook%2Fthinking-fast-and-slow%2Fid464822423%3Fmt%3D11||target:%20_blank|” btn2_background_color=”#ffffff” btn2_bghovercolor=”#f1eafc” btn_icon=”Defaults-book” divider_text=”Or” btn_border_radius=”1″][vc_column_text]

Zen and the Art of Poker: Timeless Secrets to Transform Your Game

Much of the psychology tactics used by the world’s most successful Poker players intertwine with those used by the most successful traders. A short read, ‘Zen and the Art of Poker‘ explains why those who keep their cool and play the long game are the winners in the end.

I loved this book and had to buy it after reading the preview. Almost every poker reference in it could be switched for a trading one and it’ll help you visualise your trading in terms of sitting at a Poker table, trying to keep your cool and coming on out on top of your competitors at the end of the game.

You’ll be able to fly through it in a few days and be able to take numerous lessons from it into mastering your sports trading.

Thanks to Caan Berry for suggesting this one![/vc_column_text][vc_single_image image=”1609″ img_size=”medium” add_caption=”yes” alignment=”center” style=”vc_box_border” onclick=”custom_link” img_link_target=”_blank” link=”http://amzn.to/2vERSgF”][ult_dualbutton btn_border_style=”solid” button1_text=”Buy from Amazon” icon_link=”url:http%3A%2F%2Famzn.to%2F2vERSgF||target:%20_blank|” btn1_background_color=”#eaca7a” btn1_bghovercolor=”#eabd4b” icon=”Defaults-shopping-cart” icon_align=”right” button2_text=”Buy from iBooks” btn_icon_link=”url:https%3A%2F%2Fgeo.itunes.apple.com%2Fgb%2Fbook%2Fzen-and-the-art-of-poker%2Fid361825426%3Fmt%3D11%26at%3D1000lybC||target:%20_blank|” btn2_background_color=”#ffffff” btn2_bghovercolor=”#f1eafc” btn_icon=”Defaults-book” divider_text=”Or” btn_border_radius=”1″][vc_message]Also on my list to read: Market Wizards – Jack D. Schwager, The New Market Wizards – Jack D. Schwager, The Little Book of Behavioural Investing – James Montier and The Mental Game of Poker – James Tendler.[/vc_message][vc_column_text]If I could recommend only one book I’d say you should go with Trading in the Zone by Mark Douglas. But I’d definitely recommend at least watching the Horizon documentary ‘How You Really Make Decisions’ as it gives a fascinating insight into how the brain works.

If you’ve read any of the above books then comment below with your thoughts of how it helped your trading.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_widget_sidebar sidebar_id=”gp-horse-racing-sidebar”][/vc_column][/vc_row]