Guest writer Mr Wh1te (aka The Challenge Man) is back with a mixture of thoughts and warnings about how the perception of traders on Footstock and Football Index can affect the platforms going forwards.
Some of this I can admit I have experienced on social media- especially when I was new to Football Index. Luckily, I joined the official forum where there were very patient and modest members to advise newbies; I do wonder how I would have reacted if I'd headed to the twitter timeline first (not that there aren't loads of great accounts to follow on there too!)
I think both the forum and twitter have improved over time. We see much less pumping and dumping of players... possibly due to changes on the platform rather than trader behavior though? We shall see with these x5 IPDs. But we do see a lot of boasting, showboating and 'I got one over yous'.
Often, I've felt the banter and the positive messages must all be helping the product grow- people want to join in the success. I haven't thought about it from the losing side's point of view. Fortunately (as it was a different market back then), no one bragged about selling their Robert Beric to me prior to him signing for some MLS team! Different days back then though, I ISd back to FI at a minimal % loss but if that had happened now, I'm not sure how I'd react to seeing a tweet boast about the sale and me losing 100% of the hold!? Mainly, I guess, as FI used to give us IS on the house, I always thought it was very hard to lose all your money. The game has changed now and there will be hard lessons so I can totally understand Mr Wh1te's comments on this now that it is solely player vs player.
With FI taking themselves out of the market recently, Football Index is going through the phases towards order books and it is trader vs trader- someone will be left holding the retired player and those sent to China/MLS losing 100% not just up to 20% like the old IS days! We have seen the market slow down tremendously. I've shifted 4 or 5 high profile players since listing 90% of my portfolio since the dividends announcement. I think traders are now learning, or becoming very wary that there is a lot more pressure on decision making as even those who are skilled short term traders, now have to be prepared to hold players for a longer time if things go pear shape. One thing is sure though, there will now be big losses for traders and as Mr Wh1te explains, it may be the interaction from other traders that either supports them in understanding and learning or turns them away from the platforms.
I still feel, with a clear set of trading rules to follow and discipline, you can make money on these platforms, have lots of fun and trade with less risk than using bookies for football bets and I know Mr Wh1te isn't saying otherwise. The overall message I get from reading this is, it makes me think traders will need to be very thoughtful on their interactions with other traders in future.
So read on for some good reminders and warnings to us all, new or veteran, using these platforms going forwards.
Perception To Others
This article is different to my usual articles in that it doesn’t involve maths and is not directly related to my trading. It is aimed at both Football Index and Footstock and the arguments contained within these are applicable to both.
Both sites are player v player. In both, you cannot win unless someone loses. Both pay rake (a return of some of the total commission paid as a bonus. In Footstock, this is in the form of freerolls, money added to tournaments and the reward system. You don’t have to have paid commission (packs/swaps etc) but the total of what the site earns is calculated and then some given back. In Football Index, it is given back in dividends/deposit bonus etc. Then to profit I need to sell my player to another user, at cost price + divs earned to break even. This cap app comes from another user and then they need to do the same. On both sites, users money comes in (say £50,000). The rake comes off (say £1000 which is 2%). That leaves £49,000. I put in £10k of that. I make £5k profit. That leaves £34,000 to be shared by other users, which is £6k loss for them. The maths works for both sites.
I am aware that even just writing this will make me a hypocrite in some others eyes but rightly so.
The final section ‘But Someone Has To Lose’ is the most important, make sure you read it.
The first thing to understand is, in gambling, most people lose. This is a fact.
On FI and FS, it appears most people win. This is a belief (though I would argue that it is a fact).
On FI and FS, it appears that most people win because those engaged on the sites through social media actively are the ones we see winning. They win because they engage, they ‘put in more time and effort’ into researching and reading. This is a belief. One I think it is backed up by figures. (I believe this is also true of other forms of gambling such as poker, those who engage more, win more.
For these figures, I will use 600,000 as users on FI.
FI Forum – 200 active max? Twitter – 200 active max? The biggest Facebook group of 8,000 have less than 200 active max. This means, 600 actively engaged with a wide audience. This is 0.1% of accounts. If we multiply the active users by 5, 1000 on each, that is still only 0.5%.
Let’s be generous and say there are only 100,000 user because the rest are closed accounts. This is only 0.6% of accounts at 200 active each or 3% at 3000.
Let’s be over generous. 600,000 accounts. 8000 on Facebook (confirmed in big group), 1000 on forum and 58k on twitter (following). This is still only 11.2% accounts.
These are tiny, tiny amounts. The rest of the users will go by word of mouth, seeing snippets of information depending what flashes up on Facebook/Twitter or chats down the pub with their mates. It is the perception that FI is seen in these snippets that the majority of people will make up their mind. If they aren’t bought in, then this is what will make them join/stay away. If they are bought in, this could be the difference between staying and leaving.
I should also add that it is my belief that this is multiplied because people (in general) have far more in FI/FS than they would be comfortable with in any other gambling site. I see people with £20,000 ports arguing its better than losing a £5 acca at the weekend. I don’t believe these people would sit with £20,000 in their skybet account. But it is seen here as ‘investing’ and as such, people are gambling here with scared money. This makes their perception even more important (they wouldn’t be panicking if they had £20 sat in a sub £1 player. But up that to £200 in a player and multiply by a few players and it is soon easy to understand why this is more important).
What Does Perception Mean?
It is important to understand that when I refer to perception in this article I am referring to things we say that can be seen by others in an opposite way. I am not talking about detailed discussions (as can usually be found on the forums) but the short statements, more likely found on twitter, that give off a perception that people don’t challenge, they will just store in the back off their mind and it builds up a picture. That person is Steve. So, here goes…
This is a common one that we see at the moment. You have bid on the matching engine and got a bargain. Great you should be chuffed. Your perception is that the ME has made you money. However, poor Steve who you bought from, well he needed the money. And your bargain with 40% off has just cost him 40% of his bankroll. He is feeling pretty down about it. Then as he is scrolling through social media, he sees more comments about people grabbing bargains. He won’t celebrate in their success because all he is thinking about is how he got screwed over. He will probably leave FI now and tell his 5 mates how he got screwed. That one single ME bargain being posted on twitter just cost 1 customer and 5 potential new ones. This is replicated many, many times.
Remember, FI and FS are both player v player. Every time you win, someone loses. Every time someone sees that loss posted publicly, they are less likely to engage again. Imagine you are playing monopoly with friends (What? I love monopoly, leave it alone!) and you win. Then you go and post it on social media for all to see. The next time you win, you post it again. The third time Jim wins and he posts it too. Saying how great he is. Well, Steve keeps losing and is pretty fed up being slammed at being bad when he looks at his Facebook page. Steve stops playing, and he advises his other friends not to join the game. And that is without money involved!
The Messi Equation
I saw a post this morning along the lines of ‘Ronaldo wins divs again and people say he is too old’. In with this I lump any of the smaller players who win divs and get boasting posts of ‘that is 20% of his cost’. I would also add in posts such as ‘I bet those people who sold are feeling stupid now’.
Well no, I bet they aren’t because they have a different perception to you.
I will use Messi as an example. At some point Messi will retire. You may be happy with those dividends and his cost. I am assuming most people will think they will be selling before he retires and not lose money. It is player to player. Someone will get left holding Messi and lose big. Any new users holding will feel scammed. No doubt they will be told ‘you made a bad bet, it was obvious’ as it’s what normally happens. Those players then leave. And tell 5 friends. And we are back to Steve.
It doesn’t matter to me whether you lose on Messi or the next person does. What matters to me is someone will lose big. And when they do, they will invariably leave.
Another popular one across both sites is ‘you must use this software, the premium is worth it’ and this one is perhaps one of the most dangerous to potential new users. Every time you say this, the perception you give is that new users need to use paid tools or they won’t do well. This will put a lot of people off. Besides, what kind of message is it anyway when we say ‘do well with your football knowledge but not as well as those who buy bots’ because that’s exactly what these paid subscriptions are, bots. Well, Steve doesn’t want to have to buy subscriptions to do well.
Somewhat out of date but I have included it as both sites are still feeling the ramifications and will do for a long time. Both sites have had this thrown at them. ‘But it is just a Ponzi.’ We have all encountered it. But instead of arguing against it, people just deny it. The fact is, they do resemble a Ponzi. As does the actual stock market. I would have joined FI 6 months earlier but the reason I didn’t, came down to one interaction with one well-known user on twitter (who I decline to name). I asked ‘is this not just a Ponzi scheme’ and got back ‘no don’t be so stupid’ or something similar. Had that person said ‘you know, it does resemble a Ponzi but it is different and here is how…’ then I would probably have signed up there and then. By denying what was obvious, instead of debating and explaining, he pushed me away. He probably thought he was doing FI a favour. I have long argued across media that we should be saying ‘it may resemble a Ponzi but…’ instead of ‘no, it is not a Ponzi’ and I think from speaking to people, we are still feeling the ramifications of that.
Ironically, with the removal of IS, FI is now less like a Ponzi than it has ever been. The moral of the story, FI and FS have many faults. Don’t hide away from them, don’t pretend they don’t exist but do talk about them, their impact and why misconceptions are right or wrong. Otherwise we just end up back at Steve, who won’t join and tells his mates.
I am lumping in a few comments here. Anything that leaves people feeling stupid is going to leave them feeling like Steve. A selection:
It was obvious. It’s your fault. You should have seen that coming. (This is the section I am probably most guilty off and normally I say it when people are whining. It’s not a good look.) Throw in comments like ‘see you were wrong’ which we are currently seeing on both sites with 0.5% rises after 20% dips which frankly, say more about you than the other person anyway.
Anything that makes someone feel like they have made a mistake especially when they don’t think they have (for instance IS being removed on FI or the raffle on FS) is going to make someone feel like Steve.
But someone has to lose, surely?
Yes. Yes they do. And this much is most certainly true. However, I feel we have a duty to make sure people have a fun time when they lose. Because if they don’t, they leave.
We have a saying in poker. Don’t tap the glass. Weaker players are known as fish. If you tap the glass (tell them they are wrong, rubbish etc) they either 1) learn to get better or 2) most commonly, just leave.
Bookies win because others lose. Who do bookies treat the best? The losing players. Why? Because that is where they make the most of their money.
The key point in all of this, from FI and FS to bookies and poker, is that whilst we need people to lose, we want them to do it happily and slowly. If they are unhappy, they leave. If they lose quickly, they leave. The best type of player we want to be against consistently is those players who almost break even. They have some good wins to keep them in the game and don’t lose enough to think it is unbeatable. You want to win 2% a month off players and keep the profits coming in rather than win 20% in one month and then they leave.
Make no mistake, every single time someone leaves one of the sites you have money on, your EV just got a little lower.
And that is something you CAN affect.
Guest writers always welcome! Just get in touch!
Many thanks to MrWh1te! You can follow MrWh1te on twitter @Challenge_FIS
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