Trading Theory

  • So this is really for the geeks like me around here who are in the financial services, or want to be, interested to see what people have to say about strategies for this platform? I have a few things to say to get the ball rolling.
    Imma ignore risk for the most part because that deserves a whole new thread.

    I feel like there is a chance no one cares but oh well....

    I am currently rolling a basic barbell model for what is really a basic trading platform. Some solid Longs, which are easy to pick because certain players are only going one way, and you can mitigate risk with the world cup coming and those likely to receive tfer spec. On that note, it was surprising to me but tfer speculation seems to cause more growth than actual performance, which will change somewhat over next couple of months but should be back come december. If your sensible with your longs and invest enough, your gonna struggle to lose money on her i think.

    Currently on a 1:1 with the longs but I will change to a 2:1 once window shuts.

    Players tend to continue peaking after a fundamental event e.g the di maria twitter hack thing, so you can jump on the band wagon and still make reasonable gains if you don't jump off too late. After the fundamental players always become overpriced and you have to sell before that, on this platform I would say sell extra early because it is small, there are not many people actually buying and selling players, particular in short periods, so shifting a player can be very difficult. After the stock has tanked following the overprice you can usually pick it up again at a lower price to take some profits off the rebound, issue with this is you have to invest a lot to actually make any gains.

    a note on the general LONG TERM
    There is surely an argument that player stocks are only ever going to increase, unless there is a problem with the platform itself. If one subscribes to this theory, any youngish player that is good enough to not get relegated from the index over the next couple of years (e.g. neymar) will only grow over the period. The biggest risk then becomes injury and as mentioned before platform, which we can talk about in a new thread if anyone is interested.

  • Very interesting post and completely agree with your views on a long term basis. As popularity and demand grows it should be fairly easy to gain profits. Particularly considering the average growth of players since the beginning of the platform.

    With regards to risk (which I know you said should be left to another thread), I have analysed its relationship with return as highlighted in the graph below. This has considered the the weekly value of all players over a 3 month basis and analysing the volatility through basic standard deviation. Make what you want of it anyway, I'm fairly new to financial services!


  • Don't aim to hold too long- futures become invalid after three years :(

  • Not quite sure what you are wanting to show with the graph. If you could plot the 'effective frontier' that would be really useful for traders on here, showing what players from what leagues have been on the frontier. Its Modern Portfolio theory for those who don't know, basic but keeps a trader honest and playing less 'hunches'.

    What do you think about high price players e.g over £3 a share currently, roi is much higher buying lower priced ones at least for shorts anyway - obv not so low they risk relegation.

  • How do you "short" on FI? It's only possible to hold or sell

  • By short I am referring to a short term option. Buy and flip as soon as profit is made.

    Its used when buying short term maturing gilts, and also in bond portfolio management. :)

  • @Wemyss can only really be done on the low to mid priced players- the spread on the big hitters is crippling

  • When your looking for a short term flip, do you have any sort of rules you try to stick to? Ie a % of your investment in that player or just a gut feeling? Ive had a couple now where the price is going up and up but comes down just as quickly and I've regretted not selling. The only reason I held on was that it's the transfer silly season and said player is expected to feature (Di Maria) so hoping price will go back up.

    I'm new to this (8 days) so looking for any sort of hints, tips, advice etc

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