Outrageous risk – Part Two
To recap. Last Thursday we backed the favourite at a fixed time of the day and let our losses run without re-dress. Basically it was dumb, reckless swing trading with complete abandon. By doing this we were opening ourselves to potential losses that could be massive. Only at post time did we bother to close our position. Other than that, we let risk run to its fullest extent.
My question to you, is did we: –
(a) Make a bunch of money
(b) Lose a bunch of money
(c) Neither
Well (a) seems unrealistic unless we were very lucky. You would have been incorrect if you opted for option (a). If you opted for option (b) you would have also been wrong, we didn’t lose a bunch of money. In fact it was (c) that was correct, we neither made nor lost a bunch of money. In fact we were only just short of break even on the day. This illustrates at least a couple of points.
The first is that just as volatility can work against you it can work for you as well. It’s a glass half full / half empty moment. While it may start moving away from you, it can also work spectacularly in your favour. It is no coincidence that most of my biggest ever wins have been on great swing trading races. Again, I don’t recommend this blind strategy as it can be dramatically improved upon. But you can’t escape that, as I showed in an earlier post, some of these swings can be significant. Therefore it’s unrealistic to assume that because there is a lot of movement it will only be in the wrong direction!
In part three we will have a closer look at that P&L and compare it to another and make a couple of suggestions.
Category: Using Bet Angel
