Build your notes
The key to uncovering patterns hinges on record keeping
Good evening valued subscriber
A lot of budding traders want to run before they can crawl. Crawling is slow, tiresome and seemingly bears little fruit. But the baby steps are important. They move you forward, even if slowly. It’s during this key building phase that your future fate hinges on. If you do not learn correctly, you will ingrain bad habits that will destine you for failure. If you go through the steps slowly and thoroughly, you’ll be running towards your targets with little to no effort. The effort is in the building phase and this where most give up or arguably worse yet, skip steps or learn improperly.
One of the key aspects to the building phase is taking notes. Taking notes is tedious. But it’s how you gather the pieces of the puzzle. With constant effort, after a certain period of time the pieces of the puzzle begin to fall in place. This is where things start to take shape and that’s when your results begin to take off.
When I first started trading I would fire up the markets gung ho trading anything and everything to see what sticks. This cookie cutter ‘one size fits all’ approach to every market led to marvellous results early and coincided with my turn to profitability around February/March: I had my first £100 day at Cheltenham and I begun scaling up my pre race staking aggressively until it came cascading downwards only a few months later. It wasn’t until I begun taking notes of my performance that I came to realise that what served me so well in 1 type of market worked against me in another. I was comfortable scalping handicap and Grade/Group 1-3 horses due to the stability on offer that was propped up by the rich data for the horses running.
This same technique proved to be disastrous in Maiden/Novice races where there was no such form on offer and prices were volatile.
When I turned profitable on test cricket, the results translated to immediate losses in the 1 day format of the game: Test cricket is slow and early wickets are not as penal price wise as they are in T20 where prices move aggressively and quickly. Dealing with non international players I hadn’t heard of and trading games on pitches I’d never seen cost me a great deal of money.
When I transitioned from pre-race to in play trading, I developed a keen eye for reading a horses running style but seemed to always hit big losses that would ruin my ROI%. It wasn’t until I begun to understand the style (stiffness, length, fences) of race courses and couple that knowledge with the horses running that I was able to bear the fruits of my hard work.
Whether you like it or not, you have to lose to learn in this game. Each loss demands rigorous analysis. Then you have to plug the gaps. Keeping notes on what trades you enter, why you enter them and how they play out is how you uncover patterns in the markets that are there for you to exploit. Patterns do not reveal themselves to the naked eye. But if you build notes long enough, you will see things that others miss and that is where the value lies.
Trying to apply 1 strategy to every market will result in a lot of wasted energy. The key to finesse is to know what strategy to deploy and when. Picking your spots and waiting for opportunities to come to you is only possible when you know what you’re waiting for.
Note taking is so hard and tedious because nothing makes sense in the beginning. Everything is random and disorganised. But as you gather more and more information, you can then decide what metrics to keep and discard, what’s of use and what keeps showing up. Do this long enough and things become instinctual. The road to great trading is slow…but as with any worthwhile pursuit, results gather pace. Stick with it. It will be worth it in the end.
AT