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Thread: The 5 Stages To Betfair Trading

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    Default The 5 Stages To Betfair Trading

    Here is a little gem posted on the Betfair forums by marky sparky. Little out of date on the software front, but a very good read indeed.


    Step 1 - Unconscious Incompetence.

    This is the first step you take when starting to look into trading on Betfair. You know that its a good way of making money because you've heard so many things about it and heard of so many people who make money. Unfortunately, just like when you first desire to drive a car you think it will be easy - after all, how hard can it be?

    Unfortunately, just as when you first take your place in front of a steering wheel you find very quickly that you
    haven't got the first clue about what you're trying to do. You take lots of trades and lots of risks. When you enter a trade it turns against you so you reverse and it turns again .. and again, and again.

    You may have initial success, and thats even worse - it tells your brain that this really is simple and you start to risk more money.

    You try to turn around your losses by doubling up every time you trade. Sometimes you'll get away with it but more often than not you will come away scathed and bruised. You are totally oblivious to your incompetence at trading.

    This step can last for a week or two but learning the Betfair market is usually swift and it won’t be long before you move onto the next stage.


    Step 2 - Conscious Incompetence

    Step two is where you realise that there is more work involved in trading and that you might actually have to work a few things out. You consciously realise that you are an incompetent trader - you don't have the skills or the insight to turn a regular profit.

    You now set about buying systems and e-books galore, read websites and begin your search for the holy grail. During this time you will be a system nomad - you will flick from method to method day by day and week by week never sticking with one long enough to actually see if it does work. Every time you come upon a new tipster, software or trading guru you'll be ecstatic that this is the one that will make all the difference.

    You will test out automated systems, use Excel triggered betting, dabble on Bet IE and maybe more Excel trading with Market Feeder. You might even look at support & resistance to try and figure out a likely range where you'll be able to make a "safe" trade. You'll consider trading software and may even analyse the market with BetMarket Scanner and a hundred other things all in the vein hope that your 'magic system' starts today. You'll be a top and bottom picker, trying to find the exact point of reversal with your indicators and software and you'll find yourself chasing losing trades and even adding to them because you are so sure you are right.

    You'll go into the Betfair General Betting Forum and see other traders saying they make a profit and you want to know why it's not you - you'll ask a million questions, some of which are so dumb that looking back you feel a bit silly. You'll then reach the point where you think all the ones who are calling profits are liars - they can't be making that amount because you've studied, noted form and you don't make that, you know as much as they do and they must be lying. Here's the reality, most real successful traders aren't in forums such as this.

    You will be like a teenager - the traders that say they make money will freely give you advice but you're stubborn and think that you know best - you take no notice and overtrade your account even though everyone says you are mad to - but you know better. You'll consider following the tips that others make but even then it won't work so you try paying for trading courses from someone else - they don't work for you either.

    You might even approach a 'guru' or someone on a forum like this who promises to make you into a trader (usually for a fee of course). Whether the guru is good or not you won't win because there is no replacement for screen time and you still think you know best.

    This step can last ages and ages - in fact and in reality talking with other traders as well as personal experience confirms that it can easily last well over a year. If your bank doesn't blow up in the meantime. This is also the step when you are most likely to give up through sheer frustration.

    Around 60% of new traders die out in the first 3 months - they give up and this is good - think about it - if trading was easy we would all be millionaires. Another 20% keep going for a year and then in desperation take risks guaranteed to blow their account which of course it does.

    What may surprise you is that of the remaining 20% all of them will last around 3 years - and they will think they are safe in the water - but even at 3 years only a further 5-10% will continue and go on to actually make money consistently. By the way - they are real figures in another market which may not apply to Betfair. They are not just some I've picked out of my head - so when you get to 3 years in the game don't think its plain sailing from there. IMO the timeframes referred to can be condensed for Betfair and I'd like other views on this.

    I've had many people argue with me about these timescales - funny enough none of them have been trading for more than 3 years. Sure, I guess there will be exceptions to the rule - but I haven't met any yet.

    Eventually you do begin to come out of this phase. You've probably committed more time and money than you ever thought you would, lost 2 or 3 loaded accounts and all but given up maybe 3 or 4 times but now its in your blood

    One day - in a split second moment you will enter stage 3. That is the Eureka Moment.


    Step 3 - The Eureka Moment

    Towards the end of stage two you begin to realise that it's not the system that is making the difference. You realise that it’s actually possible to make money with a simple moving average and nothing else IF you can get your head and money management right. You start to read books on the psychology of trading and identify with the characters portrayed in those books and finally comes the eureka moment.

    The eureka moment causes a new connection to be made in your brain. You suddenly realise that neither you, nor anyone else can accurately predict what the market will do in the next ten seconds, never mind the next 20 mins. You start to work just one system that you mould to your own way of trading, you're starting to get happy and you define your risk threshold.

    You start to take every trade that your 'edge' shows has a good probability of winning with. When the trade turns bad you don't get angry or even because you know in your head that as you couldn't possibly predict it it isn't your fault - as soon as you realise that the trade is bad you close it . The next trade will have higher odds of success because you know your system works.

    You have realised in an instant that the trading game is about one thing - consistency of your 'edge' and your discipline to take all the trades no matter what as you know the probabilities stack in your favour.

    You learn about proper money management and leverage - risk of account etc - and this time it actually soaks in and you think back to those who advised the same thing a year ago with a smile. You weren't ready then, but you are now. The eureka moment came the moment that you truly accepted that you cannot predict the market.


    Step 4 - Conscious Competence

    You are making trades whenever your system tells you to. You take losses just as easily as you take wins You now let your winners run to their conclusion fully accepting the risk and knowing that your system makes more money than it loses and when you're on a loser you close it swiftly with little pain to your account

    You are now at a point where you break even most of the time - day in day out, you will have weeks where you make 100 ticks and weeks where you lose 100 ticks - generally you are breaking even and not losing money. You are now conscious of the fact that you are making calls that are generally good and you are getting respect from other traders. You still have to work at it and think about your trades but as this continues you begin to make more money than you lose consistently.

    This lasts about 6 months.


    Step 5 - Unconscious Competence

    Now we’re cooking - just like driving a car, every day you get in your seat and trade - you do everything now on an unconscious level. You are running on autopilot. You start to pick the really big trades and getting 100 ticks in a day is becoming quite normal to you. This is trading utopia - you have mastered your emotions and you are now a trader with a rapidly growing account.

    You're a star on the Betfair forum and people listen to what you say. You recognise yourself in their questions from about two years ago. You pass on your advice but you know most of it is futile because they're teenagers - some of them will get to where you are - some will do it fast and others will be slower - literally dozens and dozens will never get past stage two, but a few will.

    Trading is no longer exciting - in fact it's probably boring you to bits - like everything in life when you get good at it or do it for your job - it gets boring - you're doing your job and that's that.

    However, you can now say with your head held high "I'm a Betfair Trader"

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    Great post indeed

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    Thumbs up

    Compulsory reading for anyone starting in this trading caper.

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    i am at step 6 now - i dont know nothing
    справка по The Geeks Toy на русском »» здеся ««

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    For what it's worth Geek - I'm marky sparky ;-)

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    You are indeed a man of many aliases.

    Top post BTW.

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    Quote Originally Posted by westerner View Post
    For what it's worth Geek - I'm marky sparky ;-)
    from many thanx i can assume it is good post, but as i am not english, dont get faintest idea wtf its all about, maybe someone be so kind to translate it to international inglish please?
    справка по The Geeks Toy на русском »» здеся ««

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    great post! feels good to know at which step you are, and how long is the stairway
    (i think i'm at step 3 by the way )

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    I have to add that I wasn't the original author...the content was posted on the BF Forum a while back and I took a copy.

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    Quote Originally Posted by westerner View Post
    I have to add that I wasn't the original author...the content was posted on the BF Forum a while back and I took a copy.
    hmmm...should i remove my thanx ???...










    no, it stays

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    Ah cool, now I don't feel so bad about nicking it from you.

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    And I think "Eureka" moment corresponds with another moment than "You suddenly realise that neither you, nor anyone else can accurately predict what the market will do in the next ten seconds, never mind the next 20 mins."; it's moment when you realise that odds do mean nothing, absolutelly nothing for the outcome of the game.

    When I started betting, about a decade ago, I thought it was enough to choose low odds match, and the result will come itself; it took me very long time to realise and accept that odds do not affect outcome (in fact, I'm not sure I fully accepted it yet), and it especially applies to under/over market; I missed many games where my statistics, info or "feeling" was telling me to back under or over, but I didn't dare to do so just because odds were 2.30 or so, and also many times I backed under or over just because odds were as low as 1.50, and despite my analysis showed it was not so safe bet, I thought "Shut up, the market surely knows better!"... just to discover later that match finished just as I supposed, so either I missed profit, either incurred loss due to "psychological" impact of odds.

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    Interesting points made.

    I was always under the impression that it was always best to remain in Conscious Competence, simply because there was less chance of errors creeping in, as you are ensuring you do everything as it should be done, as opposed to operating on autopilot.

    Wednesday- The First half goals market in the Juve Fulham match just now was bouncing around 2s at about 15 mins AFTER the first goal had gone in! I was going to steam in on over 1.5, but thought that for it to be at 2s with 1 goal already scored and so early in the half, somebody knew something I didnt! Suffice to say, I spent the next 75 odd minutes kicking myself.

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    many thanks to whoever wrote this article and to geek and marky sparky for sharing. the information on here for new traders is essential reading and gives you a massive heads up from someone who has sweated years of experience by compiling it. this thread needs to be kept alive!

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    Not to be confused with the 5 stages of death (or losing when gambling)...

    http://www.youtube.com/watch?v=XCoaBN6iOu0

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    Default Been There--Done That

    Yes Indeed, the ladder to sucess is long and hazardous, and only the most dedicated and intellegent will make it to the top: Even "Lady Luck" has to take a back seat on this journey because though she may ease the climb on occasions, in the end she will make a bolt for the door and leave you high and dry:

    Those few who do finally make it to the top may not be aware of it untill bit by bit, inch by inch, bet by bet, they realize (NOT SUDDENLY) that things are better now than they have ever been and while it lasts, just keep on keeping on untill the FINAL awareness hits home that they may just have finally made it to the top:

    One year later a new awareness hits home and it is the realization that while it is great making a steady income how bloody boring life seems without that challenge which we have left behind: Where to From Here?

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    Sounds like good advice

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    I used to use this system for training train drivers, we had the concious competence and unconcious competence in the training analysis, we also added to that the "Kolbs Cycle"

    I know thats not about betting etc but it is psycholgy all the same

    Now where do i make my fortune to get out of that god forsaken railway

    Cheers Wullie

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    Hi All,

    I love "The 5 Stages" and periodically re-read it whilst waiting for the "Eureka Moment".

    For a long time, I lost far more money trading (horses; the favourites) than I ever did backing them. Now 17 months of using software to aid my trading I only lose a little more trading than I did betting.

    I'm still in stage 2 waiting to find an "edge", having followed the route so accurately outlined (weight of money, support and resistance, moving averages, follow the trend, oppose the trend,
    fibonacci, etc, etc)

    I never would have believed that what, at any one time, is essentially a coin toss situation could be so difficult to "get right" (in one race last weekend I got all ten trades I put on wrong, a 1 in 1024 shot), but that is the fascination. What a kick it is.

    In September 2012 I'll have done three years trading (evenings and weekends) not counting the two or three years I played with it without the aid of software and it will be interesting to find out whether or not, I have made it to Stage 4.

    Great post "The 5 Stages" thanks for putting it up,

    MC

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    I'm right in the middle of step 3. And I am not kidding, but believe me before I reach step 3 i've been trough thousands of scenarios - in Betfair, other bookies etc. No I don't bet on Horses I don't like em. Only soccer Hope soon to get level 5 I can help if someone have questions.
    Btw I am studying finance at university and believe me this is helping me A LOT.

    PP. By helping you it's good for me - you will have to go trough my steps which means you will have to lose a lot of money And someone like me will take em - thats it . And I will really try to help out

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