Over the last few years, I have trained a number of guys who have gone on to become full-time football traders. One of the first questions they want answering, once they have decided to take the plunge, is “how much do I need in my trading bank?”
For a full-time football trader, your trading bank is your working capital. Just like any business, in order to survive you must have sufficient capital to keep yourself afloat in times of trouble. Of course, for a sports trader, trouble is only ever just around the corner.
Most traders will have had a full time job/career before coming into football trading so they will know what salary they earned and whether it was enough to make a comfortable life for themselves and their family.
Knowing the amount of money you need per annum is a good starting point to finding the size of trading bank you need. Other things you need to know are the edge you think you have and how much trading can you actually do.
Full-time trading is a full-time job. It is a good 8 hour day sorting out the fixtures, finding your daily trades, honing your trading skills, learning the markets and how the odds move then, finally, doing the enjoyable bit; the actual trading itself. There is nothing part-time about it; to succeed as a full-time football trader you must put in the hours and treat it as a full-time job.
So let’s start putting some figures in and see what we come up with.
As Goal Profits members know, I always say that you should manage your bank by splitting it into 100pts. Also that, in general, I only risk 1pt per trade (1% of my bank). For trades such as correct scores, I may decide to risk up to 2pts (or 2% of my bank).
Let’s also say that I think I have a 5% edge on the systems I use, I can factor in that I am able to find 100 trades per month and that I would like to earn £25,000 per annum.
I now have enough information to make a stab at finding the bank I need.
I plan 100 trades a month at 1pt for each trade, so that's 100pts per month and 1,200pts over the year.
I know my edge is 5%, so my yearly profit is 1,200pts x 0.05 = 60pts
So 60pts is my profit and I have said that must be £25,000 per annum.
Therefore, 60pts = £25,000, meaning 1pt = £417/pt
My bank is 100pts so the bank should be £417 x 100 = £41,700
On those figures, the bank I need in order to make £25k per annum is £41,700.
Of course, if you alter the figures, that will alter the bank size required. For instance, if your edge is 10% then the bank would only need to be half that size.
In essence, the size of the bank you require is:
(Annual profit £ / Estimated annual points profit) x 100