Well it's gonna be a quiet week for tennis traders (unless we get those ATP Challenger Tour Finals markets up - get emailing everybody!) so here is something to keep you entertained and maybe glean a few nuggets of inspiration from. It's my interview with one of the most well-known sports traders in the online world, Mark Iverson; a man who has reached a level with his trading that the vast majority of us are looking to attain. I'm sure most of you are familiar with his website and blog already, so no need for a major introduction - just have a read and take on-board some sound advice.....
What was it that lured you into the trading world?
My history with gambling started a long time ago. When I was very young I had a condition with my hip that kept me from going to school for the best part of two years. The only person available to look after me was my Grandfather so every afternoon he’d push my wheelchair to the betting shop where we’d end up fighting the smoke to try and pick some winners. My parents didn’t mind this daily routine until I started back at school. Every morning I’d scan the daily paper to study the racecards and give my tips for the day. They stopped the paper soon after, but that was it – I was hooked.
As I grew older my fascination grew and I became convinced that it was possible to make money from betting on sport but at that point I didn’t know how. I created system after system to try and beat the bookies and got to the point where I was making small annual profits, but it took a long time for the penny to drop on how to make more.
Which sports do you trade, which one provides most of your income and what do you enjoy about trading them?
The majority of my action focuses on cricket with 75-80% of my profits coming from that sport alone. I’m always trying new things though and have good ‘fallbacks’ in Rugby Union, Darts and NFL.
How would you describe your trading style?
I consider myself a position taker, but those positions can vary in length from a few seconds to an hour.
If it's not too personal, what size stakes / liabilities do you work with?
My stake sizes differ and depend on a number of things such as the confidence in my position and the volatility of the market, but to give you an idea they’re normally in the £500 to £4000 range. I very rarely hold positions until the end of an event and will almost always even my book at some stage. I’m acutely aware that I’m still a very small fish in a very big pond.
How long have you been trading for and roughly how long did it take you before you were able to consistently make profit?
In the summer of 2006 I was at a crossroads. I really felt that I’d exhausted all the punting possibilities around and it was only through a bit of luck that my gambling transformation began. I’d bought the book, ‘Lay, Back & Think Of Winning’ written by Nigel Paul to take on holiday and whilst reading it realised that with a relatively small amount of money I’d be able to grow it through careful money management if I adopted a slightly different betting approach.
I’d been a Betfair customer for 5 years, but although I’d heard and previously attempted ‘trading’ on the exchange I’d never felt fully comfortable with the idea. Until then. The book inspired me and within days I was thinking of scores of different strategies for every sport I could think of. I gathered £250 as a starting bank but swore to myself that if I squandered it I wouldn’t top up the account.
Fortunately, I haven’t had a losing month since and although my monthly profits were small to begin with they’ve grown significantly and my annual profit has increased year on year. I hope the trend continues!
What was it that you feel finally enabled you to make that transition from breaking even or losing, to winning consistently?
Careful money management and understanding that I didn’t have to be right all the time. If I ensured that I kept losses small then I became confident that when the big wins came along the rest would take care of itself.
Did you find trading relatively easy to pick up or have you had to struggle to get past the psychological barriers?
I found the first 6 months the most difficult. Until then the ‘punting’ mentality would have a habit of kicking in but over time this faded.
When learning, what did you find the hardest aspect of trading to crack?
Knowing when to be patient! I had an urge to be involved all the time and it took a while to realise that my overall p&l figures would actually be much better if I was more selective.
What was the biggest mistake you made during your apprentice years?
I probably wasted too much time and money on sports that weren’t going to yield results. Looking back I’d have probably been better off narrowing the line-up to 3 or 4 sports much earlier on.
What do you think are the biggest mistakes that new traders make when attempting to become successful?
I would say risk management is where most fall down. If you’re consistently staking 100% of your bankroll on a 50/50 shot then you’ll go bust sooner rather than later. The secret is in staying at the table.
Where did you gain the most valuable knowledge and insight as an up-coming novice?
Mainly, I just kept reading. From gambling forums to recommended books on betting and human psychology, they all came in useful. In addition I also started a blog in December 2006 to plot my progress. I had two main aims – the first was to diarise what I was doing so that I could learn from my mistakes and the second was to inspire anybody who felt they needed money to make money. I guess I wanted to back-up advice I’d been given from an already successful gambler – “that big things are possible from small beginnings”.
If you could give advice to any aspiring trader, what would it be?
Knowledge is everything so specialise in a handful of sports and aim to be the one who knows more than the majority.
What qualities do you believe every trader must have in order to be successful?
I strongly believe you need a plan and need to be organised. Having a clear mind is crucial and helps stave off any temptations to squander profits. A good head for numbers also helps.
What do you still struggle with mostly as a trader and what aspects are you still working at to improve?
I am probably still too risk averse. I prefer a string of steady wins and an accumulation of profits rather than volatile fluctuations. The downside of this is that I rarely get what I would call big wins.
Do you ever have days where you lose focus or discipline, how regularly does it happen and how do you deal with it?
Yes, occasionally, but this is my job now so I realise that if I’m not 100% I’m going to lose money. The downward spiral will nearly always continue if I’m down on myself or don’t have the right frame of mind. Instead, I often reflect on how far I’ve come or just what I need to do to get back on track. Breaking things down into small steps can be a great help.
What are the major differences between trading as a hobby / part-time and trading full-time?
I now have much more time now to go the extra yards. By that I mean the extra research and detail that I just didn’t have time to do when working full time. This does make a difference as I find myself coming up with many more angles than the ones I used to rely on.
What advice would you give to anyone thinking about making the step from part-time to full-time?
Have a back-up plan in place. It’s a very big step to take and now that Betfair have changed their Premium Charge rules it’s very unlikely you can rely on them for all of your future income. Prior to going full time I reduced my risk by reducing my outgoings wherever possible and cleared all of my outstanding debt, (bar my mortgage) to free me of any emotional baggage that could bring me down at the earliest opportunity.
How has the Betunfair premium charge affected your trading?
Fortunately, I’ve yet to reach the 250k Premium Charge threshold that would kiss good bye to 50% of my weekly profits, but I have consistently paid 20% over the last 3 years. The truth is it’s a pain but at least 20% still gives you a chance. If/when I get to 50% it will be a complete game changer for me.
What is the biggest win and worst loss you've ever had (either trading or gambling)?
I lost just short of 2.5k in one day last year when trading the Indian Premier League cricket. This might not seem like a lot to those who are used to bigger fluctuations but for someone who is a plodder like myself this was a big blow at the time.
What do you most love and most hate about trading?
The best things all surround having the freedom to manage my time. It’s great to be able to wake up in the morning and be my own boss. If I want to make more money I know I need to work harder but if I want to spend time with the family I can. The worst things? I guess it’s easy to feel isolated if you don’t make an effort to get out and about, and there’s always a shortage of people who understand what I do. No matter which way you look at it, there’s still a social stigma attached to being a gambler.
What do you feel the future holds for betting exchanges, the markets and yourself as a trader?
The idea of betting exchanges is such a good one that I’m sure they’ll continue to prosper but maybe not in the same format as we’re familiar with now as if the American market opens up anything could happen. As for myself it’s just a case of business as usual until I either start losing or am forced to stop. Watch this space.
Big thanks to Mark for taking the time to answer my questions. Certainly does make me feel like the tiniest minnow in the Pacific Ocean but also realise that it's possible to grow into a Blue Whale. OK, maybe not a whale (they are mammals anyway so doesn't work for the fish analogy), but perhaps a Blue Marlin. Or a Salmon might be more realistic. Actually, a gold-fish would be fine for me!