Patience is required now more than ever



  • Now the dust is settling on the introduction of the matching engine I would suggest we need to show a lot of patience as this is only step 1 in the development of order books. As suggested not many players will sell at full value at present but I believe that will change dramatically within a few months.

    Currently traders are trying low ball bids to buy players on the cheap these bids will rise over time and spreads narrow as currently only those traders desperate for cash or foolish enough to accept these bids disappear. In addition once we can put sell bids on the system they will obviously be higher than the buy bids so again forcing down the spreads.

    This will take time to settle down and bed in the 2% commission rule to take effect and players will probably fall into 3 tiers:

    In demand/top players: Will regularly sell at market price or instantly at say 3 to 5% below there actual value.

    Middle of the road PB players: Will sell at market price only in play when they have scored etc or instantly at 5 - 15% below market price

    Bottom Feeders: Will sell at somewhere near market price if they have an exceptional performance or instantly at 15 - 60% below market price.

    This always was obvious to those of us with experience of order books if you use Betfair as an example in the early days you could real value on any horse in a race now it looks like this:

    Favourite and 2nd Favourite will be similar to any bookmaker
    Next 3 in the betting you may get a point more than the bookies
    Outsiders you may get 100/1 instead of 33/1

    However all the trading and the money is made on the top few in the race and FI is the same, the majority of volume trading and profit is at the top of the market. If they increase dividends as I expect they will the top players will rise again.

    Therefore I advise all to be patient do not over trade and choose wisely as in a few months everything will look different. Then as more traders join more shares will issue and prices rise so the spreads narrow and you can sell players for more profit.



  • @Fletch said in Patience is required now more than ever:

    However all the trading and the money is made on the top few in the race and FI is the same, the majority of volume trading and profit is at the top of the market. If they increase dividends as I expect they will the top players will rise again.

    I agree but the problem now is there's over 3000 players on the index but only a couple of hundred worth anything, so pumping them again only makes it worse?

    Just looks like FI have issued lots of pace makers & "making up the numbers" players to support the top end players growth, that doesn't look sustainable IMO.



  • It is the same in any form of betting or trading to try to argue otherwise is like trying to reinvent the wheel, let me explain:

    In the majority of horse races over 90% of all bets go on the top 3 in the betting and more often the top 2 if you back a horse at odds of more than 33/1 do you really expect it to win (bit like buying a very cheap player). Occasionally you get lucky but more often lose.

    In football betting the vast majority of money is wagered on favourites such as Man City, Liverpool, Bayern Munich, PSG and Barcelona for example not on Port Vale.

    In stock markets the volume of shares traded on the top 20 shares in the Ftse all share index will be more than the whole of the rest of the index.

    Nothing has changed except that FI have stopped artificially subsidising us all - When all the changes are made and it is so much more transparent many more people will join and invest considerable amounts of money which will support increased dividends and increased prices even those near the bottom. Show some patience and you will be well rewarded



  • @Fletch ๐Ÿ‘๐Ÿผ๐Ÿ‘๐Ÿผ๐Ÿ‘๐Ÿผ๐Ÿ‘๐Ÿผ๐Ÿ‘๐Ÿผ very well said.



  • Fundamentally, Iโ€™m still trying to identify players that will go up in price/demand. Yes they might not sell for as much as their โ€˜valueโ€™ but all the more reason to get in cheaper now. Get a discount at one end before taking a hit at the other. Earn some divs along the way to cover commission/compensate and fund other purchases.

    Thereโ€™s some doom mongers out there but this is a great opportunity to learn, develop and thrive. I still feel that you potentially only need a player to spike once/twice in three years, maybe a defender being the only goal scorer on a Monday night to get PB and eat into cost or sell for profit.

    Iโ€™m setting up my portfolio how I want. Iโ€™ll take advice but cut out the noise. Looking forward to my future FI journey.

    Thanks for the detailed analysis and good luck traders!


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