Friday, 2 April 2010

The psychology of losing and the schizophrenia of the Draw

Life is about expectations. If you expect the best, the smell of second is akin to standing next to someone who is yet to embrace deodorant. If you expect the worst, the smell of second is like a garden of roses. You can always try to condition yourself to expect little to try to appreciate the natural smell, but the fact is that once you are accustomed to roses, it can be very difficult to remove them from your memory.

I guess that’s a particularly long winded way of saying I did well this weekend, but I should have done better!

I make no apologies for mentioning figures in this blog. I know there is heavy debate as to whether bloggers should post their profits (and losses). I believe that they help to set the background and provide context. I also believe that they help to show what can be achieved with hard work and determination. I know that the amounts I make are comparatively modest, but I continue to be amazed at being paid for watching events I have watched gratuitously for the first 24 years of my life, and I hope that this blog can show you what can be achieved

With that, I have currently made £325 from Rugby League trading in the space of 26 hours and have open green positions on both qualifying and the race for the Malaysian Grand Prix. Not bad, especially when I consider that I write this whilst being wrapped up warm with glands the size of golf balls and a growing inability to eat solid food!

I also know that most prefer not to read an unedited “I did this and then I did that” account of trading, but if you’ve read this far, then I am sure you can continue to indulge me as I attempt to analyse the trades of someone whose thinking is at best contradictory and confused by feeling ill and at worst, woeful. (Imagine how I will profit if I ever put it together!)

I love the Easter weekend. Two days off work is good. Two rounds of Super League is great. Four games on SKY TV in 24 hours is… well, there are just no words!

And it began with Whitehaven v Barrow in the mud at a sodden Recreation Ground at 6 PM last night. (A kick off I almost missed due to National Rail who conspired to leave me sat on a stationary train with no phone signal for 30 plus minutes yesterday.)

Having seen the conditions and with knowledge that Whitehaven would field two Super League standard players in Gregg McNally and Kyle Amor, I opted to start with a small back of Whitehaven although my pre match trading had been hampered by the fact that, at 6 PM, liquidity in such a game is in short supply and my reticence to embrace red.

As it was, the game was a low scoring affair which saw Whitehaven lead early on before falling to a Barrow side whose overall superior quality shone through as the match progressed. The game also served notice of the change to the draw, but I will deal with this later.

As per standard, I traded out of my small Whitehaven position too early to embrace green and then just made small trades as opportunities arose on my way to a profit of around £35. But this was just the starter and the main course was still to come, Leeds v Bradford. And with a 8 PM kick off, there was just time to get a drink and get back to work.

Now, this is where I start to infuriate myself. At the start, I acknowledged that Bradford were too high, but did not really get involved; opting to keep a fairly level book, but did try to back them shortly before they opened the scoring, but failed to get matched.

Leeds then came straight back and looked to score before turning the ball over. However, possibly due to how I was feeling, I had forgotten to cancel my Bradford back which had been matched, and now could be traded for a nice profit, which I rushed to make – accepting below market value on account of the red on Leeds. (I prefer to make short trades; staying in rarely longer than a set of six.) Only for Bradford to score, and if I had not traded out at poor value, I already would have had a treble figure green screen!

At the same time, a peculiar thing was happening. Last year, two tries to a team would have sent the draw price out to 40. Instead, it had contracted to 20. Now yes, I know that Bradford were the underdogs and therefore the draw contracting may make sense but that’s not how the draw works in RL and I continued to lay the hell out of the draw for the first half, only to reach, at Half Time, a four figure liability on the draw which was trading at the ridiculous odds of 15!

My aversion to red meant that I opted to equalise my book (which by now was just in three figures thanks to some momentum trades). And that was a decision that still irritates me as much as it did then. The fact is, 14 was ridiculous value; almost as ridiculous as the Bulls being up by ten and trading at 2!

Now, I do have a good understanding of Rugby League and am able to spot value, and this was so obvious that everyone could have seen it. However, my aversion to position taking meant that I watched as it went down to 1.08 (The draw shot out to 30+ at this time) when it became value to oppose Bradford who were tiring.

However, I declined (probably due to my computer game mentality when trading although how many times have 1.0s been overturned in RL!) but did eventually lay Leeds at 1.2 only…. To equalise at 1.3!

Anyway, the game went on to finish 20-20, the first draw of the season, and despite making a catalogue of errors, I somehow managed to earn £200 from the game. However, this was more from luck than any skill.

I say that, but it was important to note the increased liquidity flying around in this game which helps me. Last year, I was able to be so successful thanks to spotting value from events and being able to sell them on once the market realised. This produced a very heavy trading style, but one that minimised risk. However, the awful in play liquidity this year and the seeming rise in fast fingers (Or Virgin TV getting slower) has made this impossible. I did however, manage to improvise a variation and that was what helped me to make the profit I did.

And if there is one part of this piece that you should read as a RL trader, it is this.

Previously, I have advocated backing the draw. I now wish to retract this position. Las year, the draw was so easy to trade. You could get ridiculous prices which you could then trade out of as the side behind made their comeback. I remember Saints v Wakefield from last year as an example where I backed the draw at 40 on 78 minutes in a 2 point game. Leeds v Warrington is another where I backed the draw at 70 after 2 minutes. This year, the draw is starting around 25 and reaching ridiculous lows at Half Time.

Now, I do not want to advocate backing 1.04s, but this was the first draw in Super League after 56 games, and it is not so much the starting price I have a problem with, but rather the Half Time price. 15? That is absurd. It is so ridiculous it can only be fairly described by words that have yet to be discovered. Yes, the draw did come in this time, but where is the value?

The other salient point to raise here is that imagine what would happen if Leeds had started to come back. It would be very rare for the draw to be below 10 with 20 minutes to go, and there is a strong chance that you could profit from backing the draw later, and even if you needed to buy it back later, the odds are you probably could do at odds not too much lower than the Half Time price.

I have no idea why the draw has shifted so spectacularly from being something that is so backable to something that should be laid. Are too many people spotting the opportunity and the theory but not appreciating the odds? Or is this a reaction to the RU season where low scores are more popular and therefore the fact that RL sees so many shifts thanks to the number of tries not being factored in? I don’t know, but what I do know is the draw has gone from being my biggest green to my smallest green.

Anyway, armed with this knowledge but with my throat feeling worse than ever, I moved onto Friday’s doubleheader.

Only for the draw to return to its 2009 form in Hull v Hull KR and shoot out to the high 40s as Hull KR built an early 12-0 lead. Yet, they too were underdogs like Bradford although be it more marginal underdogs.

Heavily in profit, I was more than willing to accommodate these odds and felt that they would come back in. Only, to trade out at 28 despite the draw then resembling a one way train to 8 and then back out to 1000. Again, I can only blame my computer game mentality of looking to secure a “win” and despite such awful trading; I did manage to earn £60.

The final game was Saints v Wigan and by this time I was starting to feel worse than ever. Now, I had managed to catch some draw at 30+ in the morning and yet again, knew the direction of the draw… Only to trade out at 28 pre match despite it going to 25 and then being a one way train in the first half!

At times like that, I really do bother why I wonder trading. If I am so risk averse to make trades like that just to “win” well, it’s ridiculous.

Not as ridiculous as the draw however, which was 20 at Half Time! Before sense prevailed and it drifted to 28 which whilst still too short, was approaching reasonableness and by this time, I was satisfied with a profit of around £80.

At this time, Wigan were in the 1.1s and were a definite lay, only my risk averse nature and not wanting to lose any of my earnings from the first half, prevented me from jumping on.

Saints’ comeback brought the draw into single figures for the fourth time in four games and some more trades did allow me to reach my three figure goal. Only, and I’m not too sure what happened next, but I crawled on Saints and then just made a series of abysmal decisions to eventually pull my profit down to £80 but I did climb back to £90.

Either way, I had “lost £30” and it wasn’t even as if I could console myself by saying that I had wanted to lay a big favourite. If anything, the value was with Wigan at above evens!

Although, after 4 games, I was willing to cut myself some slack for the first time ever and blamed it on tiredness / illness and decided to have a quick sleep before waking up to see if anything interested me in play in the evening games.

Which were a complete disaster!

Firstly, I overslept, did not check the team news and placed a lay of Huddersfield pre match and then compounded that by clicking the wrong price in play! I only ended up losing £20 but it was a ridiculous loss whilst the Castleford v Wakefield game is still confusing me.

At 6 – 6, someone placed a lay of £900 at odds of around 5 on Castleford. I regularly follow the non SKY games to see if any value appears and whilst some does on occasions, never have I seen anyone willing to risk £3,600 before!

After that, Castleford sounded like they capitulated as Wakefield went onto an easy victory. I had placed £25 which whilst understandable is in total contradiction to my willingness to take risks when I either have green on the market or the game is on SKY. (my trading style will usually produce some profits for comebacks)

I’ve blogged about it before but if I continue to make such stupid and irrational decisions then the trading ability I have developed and my natural ability to read games will all go to waste.

And it was this that had me so annoyed at the end of the day as well as having ended the day on three successive losses as I went from having £400 profit at one stage to ending up £325 which is still a great amount but the overall losses are really irksome. £75 is a lot of money and it has been wasted wholly unnecessarily. However, if I had started off £75 down but come back to earn a total of £325, then I feel my view on the past 24 hours may be completely different.

So that’s my review of the past 29 hours. Sorry if things seemed to get rather short at the end but I started writing this at 9.30 PM. It’s now 11 PM and I’m desperate for some sleep before waking up for Qualifying for the Malaysian Grand Prix tomorrow.

I don’t make predictions in Formula 1, but what I will say is Jenson Button and Felipe Massa look great value being available in the 20s whilst their teammates are only 7s! Both have a 1-1 qualifying record with their teammates this year and I can’t explain the difference at all.

I may look to edit / tidy this up tomorrow but it is always useful to write immediately after events to capture raw emotions and the one thing that shines through is my risk averse nature needs to be overhauled. For example, if Castleford had scored the next try, I still would have probably looked to lay off at poor value to avoid red.

As always, any comments / feedback will be hugely appreciated and I will respond to the comments on the previous post tomorrow, so long as I am not feeling so rubbish!


  1. Excellent write up Craig and your passion for the game really shows through.

    I hope you're feeling better soon.

  2. Thanks for the comment and well wishes Alistair.

    Surprisingly, I am feeling much better even though I return to work on Tuesday.

    Great timing! :-)

    Hope things are going well at your end.