Thursday, 5 November 2009

Trading Styles of CityOdds Traders

Now that we are seeing a good number of regular traders on CityOdds, it is becoming apparent there are distinct categories of trader.

1. The Long Risk Trader

The trader tends to seek high payout, less frequent transactions. These trades often lose money for the trader but the ones that win can multiply the stake by 200% to 500% in a day, often offsetting the losses previously suffered. These traders tend to trade in and out of positions to try and capture shorter term movements in the underlying market.

2. The Short Risk Trader

These traders tend to regularly place trades that are very likely to make a profit but this profit would be small. These traders tend to make money on a regular basis but occasionally lose a great deal if the underlying market suddenly moves in one direction or another.

3. The Reactionary trader

Traders may purchase low cost, speculative trades either side of the current market level and should the underlying suddenly jump in one direction or another, the trader sells the winning trade for a profit, and closes the losing trade (hopefully for less loss than the profit on the winning trade)

It hasn't taken long for CityOdds to see these trends emerging and it is still not clear if any of these three strategies is the better in the long run.

It is very clear, however, that the behaviour of CityOdds traders is no different from the traders that sit inside large investment banks (apart from the £10m bonuses that is!!)

..till next time.

Mike

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