Do You Have To Pick The Winner To Win?

Most first time traders look at the BallStreet market and decide that they should be buying shares of the team they think is going to win the game. Easy enough, you have a big favorite at home and all you have to do is buy shares and wait for them to win the game before collecting your prize.

Most second time traders will look at those first time traders and smile because simply picking a winning team is probably the worst strategy you can have when trading in the real time markets.

Let’s look at some of the basic core fundamentals of the market and understand why choosing a winner too early will only get you into trouble.

1. You have total control - Picking a winner is literally gambling. You have no information and anything can happen. Why would you ever lock yourself into a team without actually seeing how they are playing and probably more importantly how the other traders are reacting? The object of the game is to create P&L from buying shares low and selling them high. With each new in-game event the price will move so you should be patient and let the game play out and then interpret how the market reacts before making a decision to buy or sell.

2. The game is not directly moving the price - Any and all price movements during a game are based on the other traders in the market. Just because a team scores does not mean their price will go up. This is an important aspect of trading the market and not the game. By simply picking a team to win you are ignoring the market effect of how the game is being perceived by the other traders. Your goal like we said is to buy low and sell high so anytime the market over reacts to an in-game event you have another opportunity to make a trade and profit off of other traders mistakes.

3. Early market trading isn’t as important as late market - Picking a winner in the first half of a game is practically suicide. Anything can and usually does happen during a live event. To decide that a team is never going to be in a weaker position and make a trade to commit your portfolio is a big decision that is impossible to consistently pull off. Just like picking the bottom of the real stock market, it can’t be done enough to make a profit.

4. Short term thinking will lead to long term profits - As the game plays it should create multiple ways on viewing the market; early, middle and late. We know a score early in a game won’t move the market in a big way and a score late in the game could realistically move the market from 0 to 100 so it's important to always understand that you need to trade for the current market conditions. If the market is giving you trading ranges based on how each team is playing you need to identify them and trade with the trend. Sitting back and just buying one team will leave you and your P&L behind every other trader who is buying more shares of your team lower because they are letting the market dictate their trading.

As you are able to trade more games and more markets you will quickly be able to identify why a market is reacting or not reacting and make your trading decisions based on what it gives you. Picking a winning team because you have a “feeling” is just about the worst thing you can do. BallStreet will always reward those traders who trade the market and not just the game. Take a step back from time to time and understand what the market is telling you and make decisions based on that instead of blinding rooting for a team that you think is going to win.