1) Rules are to be read, not broken!
I’m sure many of us have been guilty at one point in our lives of skimming over, or outright ignoring the supplied manual when trying to assemble our brand new oak-finished, flatpack IKEA wardrobe, to only find out soon afterwards that we’ve placed the door the wrong way around (or something of the sort).
The difference between IKEA flatpack furniture and Football Index is that one of them you might be slightly annoyed at the fact that you now need to reassemble the furniture, as well as possibly receiving the “I told you so” echoed from your spouse next door, and the other being that you end up losing literal money for your mistake. One hurts your pride, the other your pocket.
So how do you avoid this? Well it’s very simple; you take the time to learn the basics before attempting to play the game. You may get the irresistible urge to deposit immediately, start spending and go with the “I’ll learn as I go” mantra. However, unfortunately this is a sure way to place avoidable bad bets and lose your hard earned money. It’s VITAL that you understand the rulebook which can be found in the Football Index Academy.
To save you some time we’ve created a “2021 Beginners Guide” video series, where I walk you through the rulebook, step-by-step, simplifying all of the information you need to know. Check out the video series here:
2) Start off Small, Slow & Smart
“Mighty oaks from little acorns grow”
To become a mighty oak, you must first be a little acorn. Starting off with a small account is safe, sensible and smart. So how much is a small account? First and foremost it’s completely subjective and relative to your own financial income/capacity. You may start with thousands of pounds, or £10 (min deposit), as long as it’s relative to you. A small portion of your monthly wage could be one way to quantify this figure.
So why take things slow? Just like we don’t run before we learn to walk, the same principle needs to be applied to our trading. It can take some time to fully understand the Index intricacies, therefore it’s wise not to jump in with both feet without testing the waters first.
Becoming a smart trader doesn’t happen overnight, no matter how many player highlight reels or MOTD episodes you digest. It’s inventible that you’ll make mistakes. The trick is not to make the avoidable ones, which you can achieve be taking things small and slowly at the start. For some of you who may be tempted to think “but small and slow is boring”. I pose this question to you; which is more boring, losing money, or making money?
3) Join Free Community Groups/Forums/Chats
An excellent way to extend your knowledge and fast-track your Football Index learning is by getting involved with online community groups/forums/chats. This is a fantastic resource for traders of all levels and can act as a great guide and mentor, especially when starting out. Many groups encourage interactions, share experiences and welcome questions.
The Index has its own community group, we do as well here at Football Trading. Twitter is also another great place for information as a large part of the Index community congregate to thrash our topics, insights and discussions. If you already use Twitter then you will know to tread cautiously – Twitter has been tarnished as a ruthless and unforgivable platform at times – so tread carefully.
When sifting through advice/recommendations/information/data etc. it’s important to take everything with a pinch of salt, even from the most reputable and respectful of sources. Things aren’t always black and white on the Index. There is often no right or wrong way to trading, and can often come down to a matter of opinion, not fact. And an opinion is just that, it’s an opinion.
4) Don’t buy who you ‘like’ – Research is Key!
One mistake which almost every amateur makes on Football Index when starting out, myself included, is purchasing players who you know and like, particularly from the club which you support. Now this isn’t so much of an issue unless you’re testing the market. However if this becomes a core method for reasons to purchase a player, then you will be setting yourself up to fail.
We discussed in our ‘2021 Beginners Guide’ series on how best to identity, evaluate and research which players to consider bringing in to your portfolio. Without planning and thorough research you are relying predominately on hope and luck, not skill.
Without research, you’re solely relying on a gamblers hunch, which essentially is the opposite ingredient for successful trading/betting on Football Index.
5) Entry and Exit Points
What’s the point? Well an entry point is the moment at which you enter the trade/purchase, whereas the exit point is the moment you decide to sell. Before bringing in a player to your portfolio you need to consider your entry point, maybe it’s a specific price-point or possibly your target player is currently injured and therefore you may want to wait to enter the trade at a later point in time.
Similarly to your entry point, it’s just as crucial, if not more so to consider your exit point. This can be challenging at first and will probably take you some time to gauge, although it is definitely worth getting in to the habit of thinking about, otherwise you may end up left in a difficult situation where your player isn’t performing well and you act irrationally, as opposed to sticking to your initial exit point plan.
You should have an of how long you plan to hold your player, is it for the entire 3 year bet? Will you be selling before the Euros 2021? Having m and planning multiple exit events allows you to further control over your portfolio, as well as minimising risk.
6) Don’t Panic Buy/Sell (FOMO)
The emotional aspect of trading/betting should not be underestimated. Warren Buffet who is regarding as one of the most equipped and successful financial investors of the 21st century. He once stated that “the stock market is a device for transferring money from the impatient to the patient” and the Index as not too dissimilar. Patience pay profits.
Acting on your emotions is very risky and often unrewarding. If all of a sudden Jadon Sanchos’ performances dip and he goes on a goal draught, does that warrant him being sold? Hopefully not. Most players, even Messi, drop in and out of form from time to time. This is a classic example of an impatient trader who decides to abort mission to then jump on the hottest in-from player.
Usually this happens because of two main reasons; the first being that you don’t have solid reason as to why you purchased your player in the first place, maybe you read an enticing article online. The second main reason is because of FOMO. Fear of missing out (FOMO) is a social anxiety which stems from the belief that you (individual) is missing out, whilst others are gaining. This psychological phenomenon is ever present in modern society, magnified through technology/social media which is capable of crippling and clouding your judgement.
This emotion is important to be aware of as it’s easy to fall in to the trap of blindly following the crowd, opinions, tips, twitter threads etc. as the green arrows on screen appear to validate that you’re missing out on the community favourite buzz-word “rocket”.
Other than the psychological aspect of FOMO, the other side of the coin to reactionary trading is that you either forgot and deviate from your original purchasing plan, or even you didn’t have on in the first place.
7) Back your own bets!
As mentioned in the previous point, it’s easy to become distracted and swayed from player to player, particularly as a new joiner. One thing is for certain and that’s that you’ll always make mistakes and bad decisions, in life and on Football Index. The goal is to become less frequent with poor decision-making and more confident with your choices.
Even if you’re wrong, as long as you back your own bet then that is the most important thing. Why? Well firstly you learn better through making mistakes, which acts as a good learning experience. Secondly, most people have opposing opinions in sport and trading, and sometimes that’s all the difference is, an opinion. There’s a common adage which is used in Football Index community which is that “every dog has their day”. Meaning that even bad bets, can sometimes be fruitful, despite the majority view.
I’m not suggesting that you do not question your own bets or take on-board any outside input. My point is that it’s important not to be swept away by opinions. This does take some time to overcome as and when you become more confident with trading on the Index.
8) Diversify your Portfolio
Portfolio Diversification is a well renowned practice in the world of trading/investing. Diversification is a risk management strategy which combines different assets (players) to reduce the overall risk of an investment portfolio. Ultimately diversity is designed to protect your initial deposit and future profits.
There are 5 keys reasons why it’s paramount as a new and existing user to be diverse;
- Enables you to get a good feel and understanding for all areas of the market.
- Able to monitor price behaviour and fluctuations at multiple price points.
- Begin to identify your trading style and preferences.
- Reduces the impact and cost of mistakes and inexperienced decision-making.
- Minimises stress levels as risk is spread across multiple assets (players).
9) The “Golden Risk Rule”
So now that you understand the importance of portfolio diversification, the other side to the risk management coin is to assign a ‘max limit’ for each hold. So what I mean by is that you have rule in which you never exceed a certain amount based on a percentage of your portfolio cost. For example, if your portfolio cost (or deposit) was £1000, then our recommended 5% max limit per hold would equal £50, per player.
Applying this rule allows you to have more tighten control over the health of growth of your portfolio, as well as adding additional layers of protection to future profits.
You don’t have to use our 5% max risk rule, you can apply another percentage which is more appropriate for you. However, as a general rule of thumb, I would highly discourage anything more than 10% per hold. Another thing which is worthwhile doing is assigning different (%) amounts based on the risk profile of each player. We go in to this in more detail in our ‘2021 Beginners Guide’ video series.
10) The more you Learn, the more you Earn.
The Football Index is an ever-evolving product. New becomes old, quicker than Erling Haaland scoring his next goal. It’s incredibly important to stay informed and up to date with latest techniques, trends, insights and strategies.
The more knowledgably you become, the less mistakes you make and the better equipped are at handling and managing different situations. We’ve already spoke about joining online community to further increase your pool of knowledge, but there are also many other resources such as company announcements, articles/blogs, YouTube videos, following journalist, etc.
It actually pays to become knowledgeable on Football Index, don’t let it cost you instead.
