One of the things I constant say is that if you open a trade and it hits the point where you decide it is past where you “drew the line”. You should close and take the loss. There HAS to be a point whenever you open a trade that you have this imaginary line. The more inexperience you have, the less flexible it should be. One one gets it right every single time. But in this type of trading you need to kiss a lot of ugly girls (or boys) before you find a nice one.
Taking a loss is something I am very keen to promote among my Mentorship group. Where many traders go wrong is in their inability to “let go” of a bad trade. If you hang on too long it gets out of control. If your opening position is correct then you loss will always be under control should things go badly.
This race is from Lingfield and a maiden race. There are plenty of runners but not many serious players. The favourite is Felwah and is trading at around 2.36 Highly Excited is at 4.6 and the the next 3 runners are around 11-13. When I first assessed the race I couldn’t see a way in, but eventually talked myself into opening a trade. at 1:10 into the video I open up a back trade at 2.5. It didn’t get completely matched, so i go in again at 2.46 My exit position was 2.54 and a loss of £7.38 for my £246 stake. When it turns against me I try to close but do not get all of the stake matched. This is one of the reasons I do not go in too aggressively in markets like this. Getting money in is usually easy. It’s getting it out at a price you want is the problem. I eventually get it closed at 2.58 and decide immediately to add to the lay as there is definitely some opposition to it from at least 2 other runners. My new exit is back at 2.58, but this is by no means safe. the market here is thin, and the odds can move up and down this part of the range very easily. I hope the price may bounce after this rapid move, so add in another lay at 2.6, it doesn’t reach this so I move it to 2.64, this gets matched.
Have at look at this graph:
Notice the huge amount of volume that I highlight at 2.5. When this sort of massive volume hits the market it can often change the direction of a trend. What we see here is that after an initial change it starts to come back before starting drift again. This may be a legacy of this money.
At 3:33 we have all 4 runners on the ladders near to cross over points. This is significant. There is a surge upwards on Felwah and I want to get some more money matched before it breached the crossover at 3. This was triggered by Highly Excited breaking though at 4. There is plenty of slack in this book, which means the odds can move without effecting other odds. I decide to add to my trade again. When Highly Excited reverses I decide to take what I have and green up for £21.30. The move on Flawless Pink gained momentum very quickly and dropped very quickly. Highly Excited held it’s own for a while before succumbing to the gamble.
My next series of trades were poor. I had the potential to add another £20+, but managed to lose £8 by waiting too long. This phase of the market was very volatile. There are 30 seconds to go on the race countdown clock. Flawless Pink has bounced off the crossover at 6. It had come a long way in a very short space of time.
There is a big chunk of matched volume gathering at around 3 on Felwah, Flawless Pink is back at the cross over at 6 and it looks like Highly excited isn’t so exciting after all and has sulked off. It’s worth noting that Dire Straits has had some support too and is under 10 now. With 20 seconds to go, i am pretty much back to square one. But I don’t like to go down without a fight. What I recognise is that Felwah does not want to breach the matched volume at 3. If it does my exit is immediate. Both Highly Excited (has it’s mojo back) and Flawless Pink have both made a dash for their respective crossovers. This leaves Felwah a one way ticket north. I manage to add another £200 to it before it goes over the crossover at 3. At a green of 312 a tick, it doesn’t take many ticks to make a reasonable profit. Once I close the trade I spot that he is playing up a little going into the stalls and help myself to another £8.
I trade littered with bad decisions. But looking back is always easier than trying to predict the future. It took many twists and turns. I close the trade completely 3 or 4 times. But you have to treat each one as a separate trade.
As always I welcome any comments or questions.
I still have some places left for the September date for induction into my Mentorship program. June and July are both full now. You can read about it HERE