Originally posted on Sports Arbitrage Guide’s Blog
Most people who start arbitrage trading, fail. They won’t last more than a few months. They can’t perform when they lose all of the soft books and so unable to keep up their profits, they give up in desperation.
This is the line which I have heard for a long time now in ArbForum, and which I even began to believe myself. There is some level of truth to it – that most people don’t get past the “OMG, Bet365 limited me and now I can’t get my 3% arbs anymore! What do I do now?” stage. It is hard to go from the cushy, easy, straight forward early phase of arb trading in to the lonely, desperate, difficult stage and survive the transition…
When you start arbing, you get hundreds of pounds in free bonuses just handed to you. Every sportsbook offers you bets of several thousand pounds on every major league you look at. 2-6% arbs are in abundance and they seem to last hours. It really is an amazing experience to cash in so easily…but then you start getting limited at these soft books. Gradually you find the arbs getting thiner, and the bonuses stop coming in. You find yourself forced to either struggle to get on the 1% arb between Pinnacle and SBOBet before the line changes in 30 seconds, or you get a 2% arb which stays for hours, but will only allow you to bet £20 on it. The change is pretty stark, and of course you feel it.
But is ceasing your trading because of this change really a failure?
I’ve been working closely with someone over these past couple of weeks and with a few hours of setup, an hour or two at most a few days a week, and less than £10,000 trading capital, I have helped this person make over £600 in the first two weeks. We have just started to see the first limits, but everything is still working fine and we haven’t even deposited in all of the bookmakers we would like to use. £600 profit in two weeks, from a very lazy few hours per week approach, from money which was just sitting in the bank earning shit interest (I think it was going to take over 15 years of bank interest to earn how much we made in two weeks of casual trading), and it ain’t over yet. This week is already sizing up pretty well – probably another few hundred pounds profit again.
If they walked away from their trading right now, would they be another arb failure? I don’t know about you, but I like the idea of failing and making £600. If only all of my ventures failed with so much clear profit!
Temporary Part Time/Full Time Position Available
So in reply to this common view, I am going to propose a new way of thinking about this reality. Part Time trading has been a concept since arbing began. Plenty of people profess to trade part time, and to be honest, I don’t know how anyone trades full time (it can be pretty mind numbing!). Well, guess what, people can also trade temporarily too!
For too long, people introduced to arbitrage trading have been confronted with the idea that you are either a career trader, or you are a failure. Now, new traders can decide for themselves whether they want to just arb for a short period and re-asses what they think of it after that period, or whether they want to commit to becoming a full time, permanent arb trader. There is no one right way. As long as you are able to make the money which justifies your time – you win.
Personally, I now identify myself as something akin to a ‘Casual Contracter‘. I’m not full time, that is for sure. I am also not permanent. I come and go as I please, and trade when I please. And I recommend this style to everyone who can afford to do it. It gives you the freedom to do other things (run your own business, keep your day job, or whatever) and not feel stressed by ‘performing’ to a high arbing standards, while still giving you the benefits that come with being able to make extra money, pretty much on demand.
Arbing is a skill you learn once, and then re-apply as often as you like. And every time I have come back to trade a bit more – I have made more money. Failure just doesn’t seem like the right word to describe my non-permanent arb trader role…
Good luck to all of you, and I hope you all fail with as much profit as possible too!
You will probably 'fail' at arbitrage trading too...,