Updated: Dec 1, 2020
It’s very easy to feel like you have the reading of the market, however, be aware the rug can be pulled from under your feet, or as they say at Football Index HQ “the game has changed”.
We have to remember the market is fluid and uncertainty can be dealt by external factors of Football Index decision makers. It feels like when I was winning £500 a day on the Roulette machines, only for the Algorithm to get an update and ‘backing the Goblin ’ no longer became a viable free money strategy!
I’ll talk through a very high level seasonal cycle I might have expected and brief idea how I was going to trade (though in reality I trade on cycles and events within cycles etc).
Expected Season Cycle:
June/July: media madness – transfer players
August: sell your transfer rumours for big profit, start scooping up solid PB players who have had a dip
Sep/Oct: relax enjoy the reaping from your PB players. Move some money into those players who got the most favorable CL/Europa groups
Nov: start selling some PB peaks and moving into transfer targets for the winter window
Dec: transfer rumor in full swing
Jan: mid Jan, like Aug, start moving back to pb dip players. With an eye on CL/Europa knock out draw
Feb/March: all about teams who progress to late stages of CL/Europa
Apr->June: Euros! Back the announcement, steady rise to Euros. Watch out for players crashing out of CL/Europa who might be good value again for Euros
June-Aug: decision time… we know a div review is happening but likely to be another media div promotion too. (I’d probably sell my Euros players on peaks in the build up or group stage of the tournament and start getting onto transfer targets early… sell transfer targets early and move to PB players ready for a div increase!)
I’m sure other traders see it slightly differently, perhaps depending on whether they are long term vs short term, or they move into those cycles at different times. But I’d like to think none of the above is too controversial or surprising, seems logical to me!
What really happened?
Up to Nov/Dec it was all as planned. Very profitable, very predictable. However, there was a PB boom, more so than expected, and this threw things a little. I can’t call them overvalued … yields are better than ever with back to back div increases and prices still not back to pre-split. But in terms of their price from one day to the next… they shot up perhaps too quickly like Icarus! As a result we had PB players in decline for a sustained period – up to present
We also had some shockingly complicated promotions, which in my view, ruined what the January feel good factor should have been.
We also have this concept of fear mongering and instability floating around on various platforms. By this I mean; MB changes imminent, expansion plans with no meat on the bone, Kimmich will change position, TAA will have the matrix changed, Kroos & Messi are too old, Neymar and Pogba will lose value to transfer etc….and Corona Virus.
Right or wrong or complete myth… regardless which side of the arguments you fall on – I believe this has contributed to large cash balances and a breaking of the natural cycle. Paired with Football Index not coming out with any statements to assure traders about rules being fixed in place… and what seems to me like a delayed Euros announcement. I also feel boosting the CL last 16 would have been a smart move.
Those cash balances have then seemingly seen huge rises in few players, as people flock towards the safe bet.
Where do I find myself?
This break of natural cycle is like the moon shifting the tides. I pride myself on ability to stay on trend. However, for the first time in a long time I have significant capital tied up in stagnant holds with no obvious short term gains on the horizon.
Where did I go wrong?
I withdrew a lot of money, this perhaps wasn’t the mistake, but then I didn’t remain patient. I used some of that money to top up my preferred holds – without really considering if it was the right time to do so. I too quickly wrote off certain trends. I overreacted to Corona threat (sold my Serie A holds!).
How to get myself back on track?
Option 1, sell the players I think will be stagnant?
I’ve decided not to, their long term prospect is too good I don’t believe I could recoup the short term losses quickly enough to get back on these players before their rise. Part of this decision is I’m still uncertain where I would move the money. £40k into Kane? Mbappe… been there and done it before and seem to be able to rise £1 or so, but never the huge rise I expect. I could deposit new money on them, but not sell to buy as the margins aren’t there (never wise to trade up cheaper shares to more expensive either, as the chances of recouping the losses on fewer shares is that much harder, and the weight of money required to get the necessary cap ap is unfathomable).
So it’s option 2; hold and switch my short term trader hat for long term holder. I’ve re-assessed the holds and have full faith in their long term ability – I’m not holding through stubbornness or not wanting to take a loss (like my Chief Editor Westy!). I genuinely see their long term value increasing a lot and no easy opportunity cost in the meantime.
Silver lining is, where I withdrew so much, I also have a warchest with which to buy in on the next trend when it becomes obvious – maybe the Euro announcement will fuel the fire!
I hope you have all traded the recent times better than I have and if you haven’t, don’t panic! Try and reassess any holds before selling up in frustration. Always opportunities to make money on Football Index whether it’s buy, hold or sell.
Good luck! Let me know your experiences by leaving a comment or writing a guest article for us. Contact us.
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