Football Index Podcast

Football Index conversation, insights and a few laughs

Interviews: FI Trader: Is FOMO a Legitimate Strategy?

For this one, I was joined by blogger FI Trader to talk all things Football Index

What is your strategy?

Online poker players will recognise my strategy as “Tight Aggressive” or TAG for short. Some form of TAG play is employed by most good poker players, at least until you get to the elite level where things get more varied.

A TAG player in poker will generally only play and bet big when he is sure (85%+) that he has a very high likelihood of winning. He never bets the 50/50’s and never bets for emotional reasons like an ego fight with someone he wants to take down.

This can be applied on FI to great effect. I do a lot of research. I have access to professional stats scouting tools that 99.9% of people don’t have. And I put way more hours into it than most. Having better information gives me an edge. So when I find a player that fits the trends, is performance suitable and at the right price that is my equivalent of a poker player who has been dealt a very strong hand.

Like the TAG poker player, I am then very aggressive. I don’t spread too thin over 40+ or more players. I put all my money on the bets that offer the highest reward for the lowest risk.

Typically, for the last year, this has meant finding low priced stars like Thorgan Hazard, Joao Felix and Kai Havertz when they are down near £2, buying heavily, and then waiting for the market to learn that they are good players and catch up with me. Next year, the most profitable path might mean something different and you have to keep adapting.

New traders might do better sticking to a strategy rigidly. But I do flex my strategy depending on time of year and the market conditions. If the market is gunning ahead after a bonus and any player who can run onto the pitch without falling over is rising, I might temporarily slacken my requirements for quality for example.

The TAG strategy takes a lot of time for research and quite a lot of experience to pull off too. I would not recommend it for everyone, particularly for beginners. You have to be very confident in the targets, understand the trends and the way the market moves.

But, and this is very important to me, the time can be put in wherever I want and I can fit it around my life. Short trading where you have to watch the breaking news every hour is not my bag.

Overall, my view on strategy is that there are many effective ones and the right one depends on your lifestyle, your skills and your personality. The important thing is that you are executing your chosen strategy well.

Talk us through your FI journey

I have always loved things like Football Manager and Fantasy Football. And I’ve invested in stocks and followed other markets for years. But I’ve never been a big gambler.

Football Index seemed to fill a perfect gap for me and I was really excited when I first saw it. And then… disappointed! I had assumed it would be performance based and when I looked at the Media thing I was sceptical. I put in some money but not a lot on the basis that I believed it could be something that took off and developed. People love football, gambling and games like fantasy football in the UK, I thought it looked like a slam dunk success if it was developed right.

Well, it really has and I still think it is looking good to become a mainstream product over the coming years. It feels like a more intellectually satisfying form of gambling where your skill and ability is rewarded and it is not just luck.

When performance was introduced things really clicked for me and I became a “serious” trader. It’s still got some kinks to work out sure but overall it’s a satisfying product that I think will grow. I think the performance side needs pushing to the foreground more as time goes on as it is this that has really catapulted the product forward.

Media has a place for sure, chiefly to tide us over when there isn’t any games. But it’s not very satisfying for me because it is so easy to predict.

Why did you start the blog?

I was getting a bit lazy with my trading in early 2018. Work was busy, I had other life stuff to do. The market was rising slowly so you could get gains without doing much for weeks at a time and I was resting on my laurels a bit. But I knew I could be doing more and improving my ROI. I’m sure many people have felt the same at one time or another!

So it was an accountability thing. I’ve always enjoyed writing anyway. And if I could get a few followers and discipline myself to write every day I figured it would make me keep on top of things.

As I started, I noticed that not only was I more aware of the market movements, the additional time I put in every day was making me better and better. Fast forward a year and thousands of hours of effort from the research and writing for an article almost every day and it has pushed my trading and analysis methods to a whole other level.

In a year the blog has grown from dozens of pageviews at first to 7000-8000 most weeks now which is way more than I expected! And it is increasing every week. But it became a huge amount of work to maintain!

A month ago, I introduced a paid Members Area to the site. The income from this means I can now do 6-8 hours of work every day on research and writing to produce original content which could not exist without the subscriptions. And web hosting and the scouting tools I subscribe to all costs money that needs to be covered too.

When thinking about the Members Area, I thought if I was a busy person, or someone new to FI, how great would it be to have someone doing the heavy lifting on research for me and to take the strain off? I could focus on looking into the players that fit my strategy. No more guilt that I hadn’t done as much research as I should! And the benefit of regular strategy articles and analysis of the market and players as the trends shift and conditions change too to help me stay on top of things.

So that’s what I made. It’s something new to FI that has not been done before. I don’t do anyone’s trading for them, but I try to provide quality information that helps people follow their own strategy and makes life easier for them.

I was bowled over by the number of people who have tried it in the first month. And the feedback has been superb, the vast majority rating it 5 stars out of 5 with some 4 and just 1 (unexplained!) 3 star. And some wonderful comments and suggestions for improvements too like trend tracking, guide pricing and transfer rumour monitoring too which I am already implementing.

Anyone interested can find out more about it here.

Has FOMO become a legitimate strategy lately?

To an extent, I think it always has been provided you know what you are doing. You need to be deliberately playing this game in full knowledge that the player is probably overpriced or not that great. You can’t be the guy who actually has FOMO and win. To go back to poker again, there is a saying that if you don’t know who the worst player at the table is, it’s probably you.

This is also known in trading as “greater fool theory”. You buy weak assets that people with poor judgement or the gambling mentality will likely follow you into. And then you dump on them. The sub £1 market on the “trending” list is the classic ground for this but so are the hyper inflated youth players.

Is it immoral? Well, probably. But there is literally no point in even thinking about this. It’s trading and this happens in every form of it. It is our responsibility as traders to educate ourselves and control our emotions so we do not get caught by it.

If you started on FI today, what would be the first thing you did before even depositing?

Oof. A lot. You are going to need good information sources and guidance to help you but picking out the reputable sources from the weak or even deliberately misleading is not easy for new traders.

I am not saying this just because he is hosting the interview, FIG genuinely does have some of the best guides for new traders out there and you know it’s true because he would not have lasted so long and maintained a good reputation otherwise. To someone like him or me who is here for the long haul, a good reputation is the most important thing and it’s really easy to lose it if you are pumping out nonsense.

So look for credible high quality content creators that have been around for a while. And beware the “1000% ROI!” claims from people because people tend to be shall we say generous when calculating it. Also, the market landscape has been so favourable as FI gets started that you could have been running the strategy of a madman or picking your players by throwing darts at the top 200 and you’d still have made money.That’s not going to be the case going forward and it will toughen up as the platform matures. Now is the time to be forming good trading habits based in rational thought and self discipline.

And avoid the mistake of going for popular players, players you like, players that were good in Fantasy Football or on Football Manager. It’s NOT the same game. A player that is good in reality is often not very good on FI and you’ve got to learn which players suit the scoring system and which don’t.

Once you’ve read or watched a few guides, watch the market for yourself on big match days and see how it reacts to various events. You could use play money in a spreadsheet to see how you would have done, or just deposit a token amount for you (better yet, use the Risk Free offer from FI).

Don’t feel too pressured to plow in before you are ready, there are always opportunities to pick up good players at reasonable prices if you know where to find them.

Are the yields too low for serious investors?

Around 4-5 months ago I said on the blog that dividends were in a good spot and we did not need any bonuses or dividend increases - the market needs to develop on its own.

I think that has now changed. Prices have gone up and up now and yes, when I looked at dividend yields for an article in my Members Area last week, the dividends for most players, particularly if they are well known good players, are now pitiful.

So, I am happy for FI to get a bit of wool on their back and take some profits. We need them to be financially sustainable and good work deserves a reward. But I think before next season we now need a dividend increase.

There is a hint of one with the share split, which I await with interest. I think that might be a relatively modest one, though.

You've been vocal on the following, can you outline your thoughts on each:

Spreads

I have a different view to many (like FIG!) on this and I don’t have an issue with the way spreads currently apply. Many hate them, many want more consistency and I understand the reasons.

But if you come from other trading, then the idea of having an Instant Sell that lets you sell for a relatively small hit at all is an absolute godsend. That probably explains my relaxed stance.

It is an essential thing for FI to provide because without it, confidence would be nowhere near what it is and the market would not have got going in the same way.

Compared to say a cash out on a bad bet, it’s incredibly generous. And, we do have to take responsibility on our trades. If we make a trade that we want to get out of, it has to come with a penalty.

Without a significant penalty, the market would be chaos. People could sell at a whim and prices would be more volatile. It is only that sizable spread that stops a premium player absolutely tanking when they get injured or similar. We are all quietly grateful for it then!

And on consistency, I don’t think FI have an obligation to provide that. They have the method they have to determine risk in a player and we will never know what it is. If they told us, we would game the system.

They have to find a balance between protecting themselves financially and supporting market confidence and I think by and large, with a few head scratching exceptions, they get that about right. They certainly pay far more than a purely rational person would to buy back unwanted players.

FI comms

Tough one because I do like the personal updates from the staff but sometimes recently some absolute clangers have been dropped (lock your phones away during Friday night beers guys!).

I think inevitably, as FI matures it will have to take on a more corporate image and be a bit more professional when it comes to releasing market sensitive information. But it can still keep a friendly face. Paddy Power’s often entertaining Twitter account is an example of how it can be done.

Share Split

This will be a big moment on the calendar but my overriding sense is that the expectation and hype far outstrips the reality.

It’s a psychological marketing trick. It has no real impact on values. Over time, I think it will have a beneficial effect on the market. But I would be wary of any advice which says “this player is a must have for the Share Split!”.

Being a cynic, I am fully expecting people to be flipping these outrageously high expectations around the share split and we may see those “essential” players getting dumped very quickly.

The more important thing that will have a real impact is the accompanying dividend changes/increase which have been hinted at and that is the thing to watch.

Other Questions

What do you think of the pedestrianisation of Norwich city centre?

Have to be honest, I'm dead against it. Unlike Big Yellow Taxi, I'd rather they paved paradise to put up a parking lot. Which would actually alleviate traffic congestion on the outskirts of paradise. Something which the song singularly fails to point out, perhaps because it doesn’t quite fit in with the artist’s blinkered view of the world.

If you had to scare a donkey into falling into a river; how would you do it, and where?

Trick question donkeys can't be scared into running they freeze when startled. But if I did it would
be at the lagoons near Longstanton Spice Museum. Afterwards, I’d find a nice country pub and have a big fat shot of Director's afterwards.

Will there ever be a boy born that can swim faster than a shark?

Yes. Next question.

If historical monarchs could drive a modern car, which one would they choose? And, assuming a good answer to question 1 - Do you ever go in the Woods End pub in Surlingham?

Genghis Khan. Lexus SC430. Black. Retractable top. And yes, fancy a pint? No? Me neither.

What’s your max bench, squat and deadlift?

Probably pretty average for a 90kg guy! Bench 100kg, Squat 140kg, Dead 160kg.

Hope you all enjoyed that! A shame FI trader couldn't join the podcast but this post was, as usual by his high standards-awesome!

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