Darwin would have been proud
I try and actively monitor everything I am doing in the market, often this can pay dividends in unusual ways.
As a general approach I would recommend storing as much information about what you do as possible, even if you don’t need it right now. I’ve collected loads of data recently from Wimbledon and Euro 2012 but I have no practical purpose for it at the moment. At some point in the future I may revisit it, or find a need for it.
That fact aside noting how well, or badly, you are doing in a particular strategy or sport will help you refine what you are doing and push you to profitability. When I first started on Betfair I didn’t have a clue what I was doing, so I had to guess. I knew that doing something was better than nothing. So as I did stuff, made some careful notes of what worked and what didn’t. Then I started to strike out my errors and focus on why some things worked. Doing that moved me towards strategies that worked and killed off unsuccessful strategies, Darwin would have been proud! I evolved strategies out of basic building blocks and I still do the same today when I try new ideas.
Part of the evolution of a strategy is to keep mutating it. Every now and again I’ll introduce a new characteristic to it and see if that is making it better or worse. I recently mutated a strategy and it improved it a little, so I ‘upgraded’ it to a permanent strategy. No sooner than I had done that than the strategy started to fail. I could see in the figures it had completely flat-lined. Frustrated by the lack of progress I checked records to see when it started on it’s sideways march. It coincided with the moment I had tweaked the spreadsheet. Further investigation, a few video recordings later and hours of debugging and I identified the error. In my tweak I’d accidentally switched a ‘<‘ for a ‘>’ in the spreadsheet. Just that one error caused it to malfunction, but curiously it didn’t completely collapse. So that accidental mutation has sent me off on a new path. I now have another branch of enquiry to follow. I actually prefer this method to developing neural nets. All markets have underlying ‘keys’ in them and trial and error is actually quite an effective way of unlocking them.
So, the moral in this story is: –
Keep good records, even if you don’t need them now. Try things, even if they seem bonkers; and keep mutating your strategy. Small tweaks can lead gradually to very effective developments and multiple versions of them. Afterall, that how over six billion humans came to roam the earth and end up placing bets on other humans! I bet you Darwin hadn’t considered quite how his worked could be applied in 2012.
Category: Trading strategies
