How to Blow Your Trading Bank
6 Easy-to-Follow Steps
Charlie Munger, Warren Buffet's best friend, said: "All I want to know is where I'll die, so I'll never go there." Unfortunately, no one can tell us this. But what if I told you where you will lose all your money? All you need to do is never go there.
Without further ado, here are six ways to lose all your coins…
Put it all on a sure thing
Picture this: Man City are playing Real Madrid in the second leg of a Champions League semi-final. City are two goals ahead on aggregate with five minutes left to play of normal time. You notice that the odds of Man City progressing to the final are 1.03. Chicken feed if you stake 1-2% of your trading bank on it, right? But what if you stake every penny you have? Man City have been dominating Real in both legs so this bet is certain to win. You put it all on. Just as you start planning how you'll spend the easiest few bob you've ever made… SUSPENDED. Rodrygo has scored. No problem, Real don't have time to score again. SUSPENDED. Rodrygo! Effing Rodrygo, you talented bastard! Your heart's pounding. But it's no problem. City can win in extra time. You start bargaining with the Betfair gods: please let City win and I'll never risk it all again. Please, please, please. But Dias clips Benzema, the ref points to the spot, and Benzema ruins your month. You only need to lose once doing this to lose everything. This is sport: anything can happen. You WILL lose it all eventually.
Deviate from the strategy
The best way for a great strategy to fail is to customise it. Let's look at TTM's Laying over 3.5 Goals strategy. The strategy says that max trade time is 10 minutes. But maybe the market isn't moving as quickly as you'd hoped, or maybe you've got a good feeling that there won't be a goal any time soon. You decide to stay in a bit longer than the strategy says. It's a free country and I'm not your dad. But you're not following the strategy, are you son? You're waiting for a goal to go in and for the strategy to fail. The rules of a strategy aren't recommendations. They're commandments. Break them and thou shalt spaff away thine trading bank in no time flat.
Let your losses run
It's easy to follow a strategy and cash out when there's green. But what about when it's red and your strategy says that it's time to get your coat? Cutting wins short and riding losses is an excellent way to give your money away. Don't be the last person at the party: you'll end up washing the dishes.
Double down
Want to lose money two times, four times, eight times, sixteen times quicker? Then double your stake after a losing trade. Doubling down seems an obvious loss recovery strategy to new traders. And you might think that you've discovered the secret to astronomical wealth. But there's a reason that you'll never hear an expert telling you to double down. It might work a few times, but your bank isn't infinite and there are only so many times you can afford to double down. Hint: it's a lot fewer than you think. Instead, accept loss as part of the process. Your aim is to win more than you lose. Simple. So if you have a loss, clear your mind and move on to your next planned trade pronto.
Insure every bet
Betfair's markets are efficient. You will struggle to find a "no-loss" strategy. Like Bigfoot, there are rumours that no-loss strategies exist, but I've never seen one in the wild. When you insure your trades up to their eyeballs, you're basically looking for a no-loss strategy. But ask yourself this: if you had confidence in your selection, why are you insuring it and minimising your potential returns? Let's say you're laying the draw. You insure the trade by backing 1-1. If either side win, you will get your profit from the Match Odds market, and you will have a loss in the Correct Score market. You will "win" more trades like this because 1-1 is the most common draw result. But when games end 0-0, 2-2, 3-3… you lose TWICE. You've created a situation where you win small and lose big. Like Mark says in the 3-0 Reloaded video: "If you spend more time profiling games and less time trying to figure out how to insure a trade, you will be more profitable."
Believe that every day will be like today
You've had a great day. Every selection has been a winner. Maybe you're the luckiest man alive. Maybe you're a genius. Maybe it's time to chuck away the staking plan. Tomorrow, you won't be betting 1-2% of your bank, you'll start betting 10-20% and start making Elon Musk money. Turns out, today was just one of those good days. Tomorrow is meant to be a bad day, but it's going to be 10-20 times worse than it needs to be. On the other hand, if you've had a bad trading day, tomorrow might be different. Don't throw away a great strategy, and don't withdraw all your money and give up. If you've got a good set of strategies, good match selection, and a good mentality, you can take the rough with the smooth. On good days, keep your feet on the ground. And on bad days, remember that you can't lose if you never give up.
