Number 2 - Five Keys to Trading Success

My five keys to trading success

There's obviously other things that you need to master to become a successful trader but I'm not keen on writing huge posts and working on these five is plenty to start with. When mastered you'll have a very solid platform for long term professional sports trading.

1. Mindset
2. Discipline
3. Strategy
4. Preparation
5. Development

Those five aren't really in order of importance, as you'll all be better/more advanced in some of the keys than others. What is important is that you keep working on all areas, all of the time because this is a journey, essentially without an end. The goal is continual improvement and subsequently consistent, long term profits.

1. Mindset

A traders mindset has to be long term and focussed on his strategy but, crucially on the process of executing each trade correctly rather than the outcome of the trade. You must follow the rules of your trading strategy, to the letter on each and every time you open a trade. If you've got a winning strategy with an edge, the only thing stopping you from being profitable is...............you, by incorrectly trading your strategies. You need to condition your mind to accept short term losses as easily as it accepts wins, as you won't win every time but you need to overcome losses and move on. Have confidence in your ability to trade correctly/professionally each time you sit down to trade because if you can do this, you will profit from sports trading long term. I won't go into detail on mindset, as I'm no expert but a great book to read for more info about a traders mindset is Trading In The Zone by Mark Douglas.

2. Discipline

This is probably the biggest problem for most traders & gamblers of any kind, from sports betting to poker and casino, discipline is 100% essential to long term, consistent profits. If you have a profitable strategy for trading football then use it as much as possible (when suitable opportunities arise of course), if you enjoy watching cricket but have no idea about trading it, then DON'T trade it, you will lose money. Stay disciplined and don't waste any of your hard earned profit on throw away bets and trades which you've not fully prepared for.

It's far better to master one sport at a time, even one strategy at a time, rather than winning on football and giving all your profit back on cricket. Yes, there are strategies which can be applied to different sports and some very experienced traders can jump into new sports and make a profit but none of us could run before we could walk, could we?
It takes years of practice to reach a level where you could competently trade a new sport and make a profit with little to no experience. I'm certainly not there yet and like most other traders I know, I've spent far too much money finding out the hard way that I should have stuck to trading just one sport and mastered it before moving onto others. But with racing, cricket, etc, etc it seemed like I was missing out on so many great opportunities to profit. I had to get involved but of course it didn't work, I just lost the money I'd made from football.

I've moved on from that now and also trade tennis (but only if there's no football on, the summer basically) and NFL which is only 1 or 2 games per week for 6 months of the year. In my opinion for what it's worth, in trading less is definitely more. I'd rather make a tidy profit from trading one football match per week than break even or lose from trading football, cricket, racing and rugby in one week. The satisfaction I get from trading one strategy correctly and making a profit, far outweighs the short term buzz from going on a mammoth trading session over 4 different sports and timezones (we've all done it) which inevitably ends in disaster.

A great little resource a friend told me about are the 4min trading videos by the DisciplinedTrader, he is a financial trader but the vast majority of information he delivers is applicable to us as sports traders too. He has a YouTube channel you can subscribe too as well and one thing I still do to this day is watch one of his videos everyday, repetition is the way we learn. I'm disciplined now but there's always room for improvement and as mentioned earlier, this is a journey of constant improvement, almost without end.

3. Strategy

As mentioned on the Football page, there are numerous places to pick up sports trading strategies. Some people sell them as ebooks, others are taught via trading courses or when joining a trading community and then there are strategies which you develop by yourself. On the whole,  I prefer to develop my own strategies, test and tweak them as I go but they always have to give me an edge (a good value position) and I must feel comfortable with the risk while trading them.

Ultimately, if you have a strategy which meets these criteria and you're able to diligently follow the rules of how to trade it, there's essentially nothing else stopping you from making a long term profit. Variance will always be a factor but that is out of your control, the strategy is under your control. But, even a strategy with the biggest edge in history won't make a profit if you don't trade it as it's supposed to be traded. It also won't make a profit every time you use it, no strategy wins 100% of the time so, be prepared for losing trades/matches/days/weeks & months. 

As more and more markets become available so, the number of strategies to trade these markets increases too. There are lots of people trading the Correct Score markets which are attractive because of the relatively low stakes you can use due to the bigger prices available. The halftime markets are another growth area which offer some fantastic low laying opportunities. As you can tell, the potential is huge and there's no right or wrong way necessarily, it's all about finding a sport and a strategy that you're comfortable with. Master it and then begin to add more strings to your bow so, you can adapt your approach and maximise profits and the game changes.

4. Preparation

For some people this is the boring bit (I love a good stat so quite enjoy doing my research) but without doing your preparation, you're seriously limiting your chances of making a consistent profit. My TOOT strategy is specifically designed for matches which have a high probability of having 3 goals or more (although 2 is enough to profit) but it also needs the entry price to hit by a certain time into the match. Without doing the prep work to find out which fixtures are most likely to fit those criteria, how could I possibly trade a match with any confidence about making a profit?

The more research/prep work you can do the more confident you'll be that the matches you've picked to trade, are the best opportunities to profit from. You should know exactly when you're going to open the trade, exit the trade and everything in between long before kick off so, you'll be prepared for anything that happens during the game. This is vital to avoid those 'rabbit in headlights' moments which can happen when you're not prepared for the trading session or you're trading a sport you've not traded before. You end up sitting on your hands and staring at either a red book or a missed opportunity to make a profit.

Doing the preparation also enables you to remove a lot of the decision making from your trading sessions. The less decisions you have to make during a match the better, because less decisions means less mistakes. If your pre match plan is to green/red up as soon as the first goal goes in, then when the goal comes you simply click the button and exit the trade, no thought needed, no mistakes made. Without that pre match plan, when the goal goes in you sit there for a few minutes and think -

• 'I could take a small profit now by greening up or I could let it run for a while, just in case there's another goal.' 

You wait 5mins but there's no more goals and now you think - 

• 'Ok, no more goals yet but there's definitely one coming soon and its hardly worth greening up now anyway, I'll let it run to scratch'.

Then the match really picks up pace and there's goalmouth action at both ends but still no goal and the price has gone past your scratch exit - 

• 'Still no goal but I'm looking at a small loss now anyway so, I'll let it run until I'm down to 50% loss, then I'll red up'. 

Your 50% loss exit arrives and you take the red book, 5mins later a goal goes in - 

• 'I wish I had stayed open! Why, did I close? I knew there would be another goal, f*ck this trading lark!'

Obviously, this is just a made up example but most traders I know, myself included have been through very similar situations in the past and will again if trading without putting the work in beforehand with the prep. My point is, why put yourself through all that? Be prepared and if you stick to the plan, your trading sessions will be a lot less stressful. Make one decision before the match starts and stick to it, rather then making three decisions, under stressful conditions during a match and inevitably get some if not all of them wrong. Remember greening up for a small profit, even a much smaller one than you could potentially take if you stayed open and the game went the way you hoped it would, is never a bad decision.

5. Development

This is a journey which hopefully leads to consistent, long term profitability but to reach this ultimate goal, you have to keep developing your trading ability. Prepare, practice (with real money, more on this later), review, amend and implement, then repeat over and over again.

One simple thing which will make a huge difference to your development as a sport trader is to make notes on every trading session you have. The notes should cover everything from what your pre match plan is and how you traded the match inplay to what the results were and what you learned from the session. You will learn something from each trading session you have, either about the strategies you use and how you trade them or about yourself and where you can improve your performance.

When I started trading football, I quickly realised I needed some structure to my trading so I developed an inplay trading template which enabled me to record prices, strategies and thoughts as the mach progressed. A simple word document, it also broke the match down into 15min sections with the relevant strategies listed for each section because at the time I was trading many more strategies, most of which were only suitable for certain points in a game. As I had only just begun my journey it took sometime to memorise all the different options I had available to use during a match so, this was a great help in the early days and also aided my game reading skills. I strongly suggest that any inexperienced traders out there who are not already recording their trading sessions, try something similar and see how much difference it can make.

One thing to note is that after a match it's always useful to write a short review of how you felt the session went, good, bad or ugly, write it all down and be honest about it. But, remember it's about how your traded your strategies, not how much you won or lost. Then before your next trading session, sit down and read the review of the previous session again. This will help all the vital bits of information sink in, so that you can hopefully avoid making the same mistakes again. I'll try and upload an example of the inplay template when I get a chance so, you can see what I'm talking about.

Please feel free to email any questions and follow me on Twitter @DarkDyson where I update live trading sessions regularly and check back here for more posts soon! Good luck with your trading.