Aside from being a fantastic story about the author’s life, there are various lessons which can be learned from it. There has always been a widespread debate “which is more important? A book or experience?” My take on it is a combination of both. Whilst experience gives you an insight into your own performance, books provide you with an insight into the experience of others, which in turn, can be used to develop your own performance.
The story centres around Edward O. Thorpe, and shows his motivation and determination to beat the game of Blackjack, Roullette, before eventually proceeding onto Wall Street. Whilst reading, you will get a fantastic insight into his thought processes, and how he broke things down into simple steps in order to achieve his goals.
When people first start out with sports trading, they tend to jump straight in, they try a bit of everything without properly researching the subject, they tend to lose money, and as a result they give up. Of course, on the opposite side of the coin, some traders just gel with whatever market they enter, and then there are others who perform well in certain markets and poor in others. Going back to the book, whilst he was unbelievably successful at whatever he tackled, he didn’t tackle them all at once. He studied one topic until he became an expert in that field, made his money from his expertise on that subject, then moved on to the next.
That’s not to say that you shouldn’t look at other markets/sports whilst you are developing your knowledge/skills in another. Quite the opposite in fact, you should look at as many different markets as possible, you don’t have to become financially involved in every single market you are looking at. By looking at as many markets as possible, you will soon find that they all behave differently.
The next lesson I took from the book was: once Mr. Thorpe had made his fortune on Blackjack, he didn’t become over-confident or arrogant by jumping straight in, over-staking on roulette. Again he started his research, and only ventured in with stakes that he felt comfortable using to begin with. He applied the same principle again when he went from roulette onto the stock exchange, starting small. He expected and accepted that there would be some losses along the way, and he trained his mind to behave in a certain way if/when they happened to come along, setting himself strict limits which would allow him to have as many chances as possible.
As you go along with trading, you might find that you did particularly well with one sport one day, you fancy a little change of scenery, so you venture into another sport that evening, only to wipe your afternoon’s work out. Did you become over-confident with your staking based on what you seen on screen? Did you research the subject thoroughly before you joined in? Before you entered the market, did you set yourself a limit as to how much you will prepared to lose?
When you are playing for real money, you will learn a lot about yourself. You will have to face your demons, resisting that urge to chase losses, knowing when to quit for the day, protecting what you have accumulated throughout the day/week/month/year, otherwise trading becomes completely pointless if you are steadily building your bank, only to throw it all away again in a moment of madness.
Developing your preferred trading style is vital. Some prefer horse racing over football and vice versa. Some horse racing traders, mainly the ones who wish to use higher stakes opt for the higher profile static markets whilst others prefer the slightly more volatile races with lower liquidity. Others prefer the flat season over the winter/hurdles season, and again, vice versa. It takes time to become a good all-rounder for the various styles of races available to trade on. Although they all share one specific desired characteristic: Getting out when you need to without hesitation! This rule applies to every sport. At the beginning, you should focus on what you are good at, become an expert at that, then either decide if you are happy with what the markets are giving you for your level of expertise, or step back into practice mode (why throw money away if you don’t have to?) and look to become a “man for all markets”