Scaling up

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ShaunWhite
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This one's for the bigger guys...

When you were in the early stages of your career, did you find there was a point beyond which scaling up became difficult? I'm not talking about the actual mechanics of trading, getting filled, moving the market etc, I'm talking purely psychologically.

....skip to the end bit if you don't need the details.

I'm at the stage now where I'm reasonably consistant and making daily money far more often than not, but each time I try and push forward the wheels get wobbly even if they don't completely fall off. There seems to be a level that my brain considers to be a 'significant' amount.

When I first started I did the usual £2 then £5 then £10, £20, £30 etc etc and each stage starts with some trepidation but you soon get used to the new size of the numbers, it becomes normal, and you step up. But progress seems to have hit a brick wall (not at £30 I hasten to add). I've tried all the old tricks, scaling slowly, being mindful of managing my new risk vs bank etc, but I seem to have been in this one step forward followed by a quick retreat to safety phase for about 3 or 4 months now and I'm keen to push on especially with summer around the corner.

I'm not being greedy just trying to tip the scales from from nearly, to really, making a decent wage....and I think that 'brink of success' area might be part of the reason. Perhaps it's a fear of failure issue?

...end bit

So, do any of you big dogs recognise this phenomenon, or did you all coast effortlessly through from modest steady profit to pushing the limit of the markets?
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marksmeets302
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When I worked for a market maker, for almost every trade we did we were confident it would pay off. As such our job just became making sure we could do as many similar trades as possible, and as big as possible. I think you need to get yourself to that state where you realize that if you don't scale up you're selling yourself short. If you were trading for a boss he would fire you for leaving too much money on the table. Now you are your own boss. Maybe you should have a talk with yourself?
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ShaunWhite
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marksmeets302 wrote:
Mon Apr 02, 2018 1:20 pm
Now you are your own boss. Maybe you should have a talk with yourself?
Thanks marks, you're spot on, and recognise the kind of working environment you're describing.

I was just curious about peoples' "journey" from doing OK to fully exploiting every opportunity. It's frustrating because apart from a few exceptions it's not even the case that the horse markets are particularly large, so the middle ground should in theory be fairly easy to navigate....'should be' being the operative word.

I do plenty of having a word with myself about it, I'm just not convinced I'm the most effective line manager I've ever had because I don't respect what management-me says; that person hasn't been there and done it. Now.... where's the phone number for the psychiatrist, there's clearly issues between me and my other self that needs resolving or else someone round here is going to be fired. :)
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Derek27
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I'm not one of the big boys but I'm not a little boy either. ;)

Several years ago I started a year with £100, the main idea behind it was to make a fresh start after a turbulent but profitable year. When I reached £200 I doubled my stakes and in a few days I was down to £160. I put it down to a coincidental bad few days and the psychological effect of losing twice as much as I would have done. With hindsight I could say early February wasn't a good time to be doubling stakes.

These days I try to limit my liability (after closing trades) to 1-2% of my capital so my stakes are just growing gradually. Like you I have been struggling to make progress recently and I can't put it down to the time of year because I've been making a few cock-ups lately.
spreadbetting
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ShaunWhite wrote:
Mon Apr 02, 2018 5:39 am
I'm at the stage now where I'm reasonably consistant and making daily money far more often than not, but each time I try and push forward the wheels get wobbly even if they don't completely fall off. There seems to be a level that my brain considers to be a 'significant' amount.
"making daily money far more often than not" doesn't sound consistent to me. I'm not too sure what you mean by the wheels get wobbly either, do you mean you're starting to lose or just scared at the amounts at risk? No idea what stakes or odds ranges you're playing at but may even simply be a case of you're now trying to put thru more money than the market can take at that point that's turning previous markets now into losses.

If you've scaled up slowly as you say it's very unlikely the stake amounts are the issue more likely you're just not as confident about your consistent approach as you thought and now overthinking trades. With every change in our trading approach we always need that bedding in period maybe you're overreacting to these new losses, maybe you've been unlucky and the inevitable run of losses has come as soon as you've upped the stakes so you've put 1 and 1 together and come up with 3. You probably just need to give yourself a reasonable amount of time with the new stakes without concerning yourself with the profit side of things, a good run with higher stakes will easily recover any early losses just give yourself the time to allow the consistency to come thru.
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ShaunWhite
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Honest reply Derek, I appreciate that.

I think there's a lot of truth in that... Volatile times aren't good times to press on. Like going live with a bot, it's sods law that says you'll start in a dip.

The current plan is to tick along as is, more (and better) racing should therefore mean profit will no change. As the season develops, slowly push forward and sneak up on the bigger numbers with me noticing.

I've seen a million posts about how to get from A to B, but absolutely nothing about how to get from B to Z. Iykwim. When you look at things like the infamous monthly numbers from Adam, the thing that stands out to me is the way they really push forward so hard and fast once they get going.
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ShaunWhite
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Time and thoughts greatly appreciate sb.

I'll go away and give everything you've said a proper dose of thinking about. I don't just want it to go in one ear and out of the other.
xitian
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I only trade with automation so obviously it’s a bit different, but actually I had a similar stagnation in growth a few years back. I think it was for a few reasons, but partly psychological even though it’s automation that I use.

Firstly I attempted to scale by increasing stakes, and whenever I did, I seemed to go through a bad patch and eventually decide to scale back again. Secondly I had the feeling that I was already doing quite well based on what I had known (or estimated) other professionals were able to earn, and therefore I assumed I was near the edges of what I could achieve with my automation and my skill set. Similarly to that I don’t think I set a really ambitious target. I had a target that was above what I was doing, and continually struggled to pass it, thinking that I only had to do something little to get there.

I’m not entirely sure when the moment of inspiration came, but basically removing that mindset of “what do I need to grow from 8 to 10”, and instead thinking “what if I ever want to get to 20 or 30” helped me to completely think outside the box. It was no longer “what if I just raise some stakes here” but “what fundamental changes can I make to scale up by a factor”. That actually lead to a year or two of great innovation for me. I’ve increased profits year on year since then, and am only now beginning to feel stagnating again, but way ahead where I thought I could have been those years ago.

So for me, continuing to think big (which also means looking at the small details of what I’m doing) has helped me to change things up and in turn find ways to scale up.
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ShaunWhite
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Thanks for that xitian. Another one to really think about.
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megarain
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I do think its a little market dependent .. and is also influenced by whether you decide to be a market maker, or market taker.

So, although I want to add useful info, I feel a little hands-tied.

One comment I would make.

In a book about a bookie in Australia .. the bookie's father was worried his son might not have the mental discipline, to lay horses to lose over Aus 1m.

The first time he did, the horse won .. but, he was over the hurdle, and then regularly laid these sums, and his business/profits grew.

If u can think of it, as just numbers, (or even dont think about it), so long as the market can tolerate your volume, you should be ok).
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Cards37
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Which book was that Mega?
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megarain
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https://www.amazon.com/What-are-Odds-Wa ... 1741666309

It’s an interesting read, with some v good insight.
Nero Tulip
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In some ways it's a case of slow desensitisation. Numbing oneself to the ups and downs, and there will be more ups and downs with more risk / larger scale... depending on how far you push it and whether your strategy suits that or not. The market's capability to handle it and so on is something technical I'm sure you've already considered...but sometimes (as I found) it is a case of transitioning to accepting being more of a pure punter, or at least, enabling the 'does trading = punting debate' to take on a different shape. Sometimes it is right to take more risk, and the size of the risk will not necessarily result in an easy exit - that's quite a big difference for anyone who is used to getting out of everything.

when it happens, you'll remember your first 1k loss, then you'll slowly forget it as it'll be common place, then your first 10k loss and so on.. Get the process right, manage your size correctly and like Marks said, repeat as many trades with an edge as you can, while you have your edge. Don't expose yourself greatly to risk of ruin though, this forum is far better with you in the game :mrgreen:

I'm not entirely sure if everyone is suited to this btw, the losses can have a huge impact on mentality that can often be a step beyond what might seem a good idea.. fwiw I treaded very cautiously, raising levels slowly over a very long time.
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megarain
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That’s a v good post.

Desensitisation does help taking on more risk, but it can b v hard, if not impossible to limit how far that goes.

So, maybe your character becomes less emotional overall, to all walks of life.

That probably is not such a good thing, for a life balance.
stueytrader
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I'm glad I found this post, as I was about to ask about this exact issue - how to scale up in the best way possible. Actually was more interested in mechanics, but the issue of taking larger losses is also pretty key IMO.

I've seen a few mentions of the idea of more gradual scaling here, so I suppose that is a general consensus as to the best way to move up - doubling stake for example may push the mental buttons too much, in one move?
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