Someone on the Betfair Forum recently posted something sensible. Yes, yes, I know, it hardly seems possible, but occasionally someone actually posts something that is worth reading. Apologies for forgetting whoever it was, (I didn’t note your name down but I will post a link to this entry in the hope that you will claim credit for the idea), but anyway, his comment was that to be successful on Betfair, it is the ‘approach’ that is important and not any ‘system’.
I agree with this statement absolutely. In fact, it’s my approach that I have been fine-tuning since joining Betfair, although I didn’t consciously think of it that way before.
I’m not saying that I don’t believe that ‘systems’ never work (they do if they always represent value), but the poster was spot on when he said that success or failure lies with the overall approach. Having been a Betfair investor for over four years now, I have five golden rules (mostly learned the hard-way) as to what attributes an ‘approach’ needs to have.
1. Software – never invest when you are tired, emotional or when you are euphemistically tired AND emotional. (Drinking and smart decision making have never gone together very well. How many of us would be here today if that were the case?)
2. Hardware – have reliable computer equipment and internet connection and a back-up. There is nothing more frustrating than being unable to exit a position due to a technical glitch.
3. Discipline – never be in a hurry to invest. Wait for an opportunity that looks like value, but never bet just for the sake of it. Some days there may be nothing to bet on. That’s ok, tomorrow there may be a hundred. For this reason I do not advocate having short-term goals. They sound fine in theory, but they put pressure on one to invest when one shouldn’t and vice-versa, to stop investing when one should be making hay. Also, and this should go without saying, never bet more than you are comfortable losing. The fact that a bet is good value is no guarantee that it will win. Expect the worst, understand that the bet was a good bet even if it lost, and look at the long-term picture.
4. Specialise – concentrate on what you’re good at. I have a number of sports and markets that I just can’t get ahead on so I just stay away from them and focus on those markets that I do understand and that make me money.
5. Records – keep accurate records. It is a well known trait of gamblers to remember (and inflate) the wins and forget the losses (ask a gambler how he’s done over the past year and the answer is usually “won a few, lost a few, slightly ahead overall”) but to see exactly what works and what doesn’t, it is essential that you keep track of your results. Numbers don’t lie. I have a spreadsheet dating back to 1/1/06 (one of the few New Year’s resolutions that I have actually kept for more than a week) and it allows me to plot fancy charts and calculate moving averages to my heart’s content.