Early on, the matching engine breathed new life into FI and was really popular. 

Perhaps surprisingly so.

As I covered in the live blog at the time – FI had pulled off a genius move. The ME had no right to be that popular! 

They took advantage of the circumstances to take something important away and somehow turned it around so that people were happy about it.

I’m not annoyed about that – it had to happen eventually. I’m a little bit impressed by the business sense if anything.

But sweeping away FI bail outs of bad decisions (or in some cases unlucky decisions) is a huge deal. There is no more Uncle Cole to step in when your trade goes wrong.

It is that support that has allowed FI to grow to this point and enabled the wreckless trading habits that many have come to view as “normal” or even “good”.

I think traders are just starting to get their heads around what that means. But some of the conclusions I see being drawn on social media are in my opinion wide of the mark.

By and large, the top 200 players have decent spreads – we can pretty reliably get a reasonable red button price at the top end of the market. They fluctuate sure depending on the latest news but so far a recognisable/popular player hasn’t had too much trouble.

Dip into the squad list though and it can be a blood bath. Certainly as you get to the £1 and under price range. You may get offered -30% or -50%, sometimes even no price at all. That’s a huge hit and having an undesirable player is far more punishing than ever. 

People are realising that now and it’s quite frightening for many.

We’ve lived in a kid gloves world up to now where it was only possible to screw up so much. FI provided a generous Instant Sell price even for the most awful of players (and people used to howl with anguish and complain even at that!). 

That made punting on real garbage quite viable. Far from optimal and you’d still lose often – but you could get away with it and still make a profit as long as the market overall kept rising.

That is not going to be the case anymore.

Those mistakes are going to get heavily, heavily punished. 

So far, traders response to this uncertainty seems to have been “Ok, if I can’t be assured of a good red button price at the cheaper end, I should buy the more expensive and popular players”.

This funnels people into the top 200 and into the 50 and top 10, and usually at the younger end in recent weeks in the mistaken belief that youth = low risk. This is what I am calling “comfort blanket syndrome”. 

There is some good logic to this but it isn’t quite right because what is popular changes all the time. And so will the red button price.

We have the blue button price – which takes a lot to push up and is what shows in people’s portfolio as the “value”. It’s what most traders think the player is worth and the price they expect. They are used to that way of thinking. And that’s the way FI presents it to them.

But the blue button price is an illusion. 

The red button bid price is now much more reflective of what a player is worth today – it being what people are currently willing to pay.

In the new world, it is now possible for prices to shift very very quickly. An £8 player can become a £4 player overnight if that is all people are willing to pay.

That was not practically possible before. If an £8 player went south they might drop to £7 or maybe £6 tops and then maybe slowly bleed from there. And you’d usually have the ability to IS for a relatively modest loss because FI were generous.

So say we have a £4.50 player who is currently all the rage because of a transfer rumour or because people think highly of him as a prospect – he can keep that going as long as people believe it.

But when something happens to make people stop believing it (maybe the transfer collapses, he falls out of favour and is shipped out to a mediocre club, he plays 6-8 games and demonstrates weakness) then that price is shattered. 

He will be worth not £4.50 but whatever people are willing to pay for a flop. Which may be £2.50 or nothing.

The £4.50 blue button price will be irrelevant then – nobody will pay it and it will have to slowly drop to meet the lower red button price over time (probably very slowly until FI introduce the ability for traders to specify blue button prices – then the blue button price can drop much faster than it can now.)

That is 100% going to happen to a lot of players. Including lots of younger players who people seem to believe are low risk – this is another illusion. Most young players are yet to establish and are very high risk. Very few bright prospects make it to being global stars or FI relevant.

This comfort blanket seeking behaviour may feel attractive right now and may be delivering some short term gains – but we must avoid painting ourselves into corners by getting stuck in too many popular but ultimately overpriced players who aren’t all that FI relevant. Because when that event hits that means everyone wants out – you will not be able to sell them for anything close to the blue button price.

So what is the answer?

Chasing popular players is the wrong thing to do but it’s quite close to being right (which often makes it an easy trap to fall into for many).

We should concentrate in high quality players but “who people are buying right now” and high quality is absolutely not the same thing.

High quality means relevant to the FI scoring system, either now or potentially. That means real, credible potential not just gossip or an appearance in some wonderkid article. 

It is absolutely fine to punt on speculative players who may live on hype but it has to be done from the bottom now more than ever – not joining at the top when the price is already overheating. (For example, in yesterday’s scouting I highlighted the difference between buying Locatelli vs Tonali). 

High quality also does not mean they have to be expensive. We can and should shop in the £1.50 and under range of the market without fearing the lack of a good Instant Sell price – but only when we think we know something nobody else does. Most bargain bucket players are in the bargain bucket for a very good reason (More on this in the Q+A below).

Fundamentally, this all comes back to what really gives players true value on FI. Dividends and nothing else. When all the hype and speculation is done that is what you are left with and we do not want to stray too far from rational values. A player who wins dividends or has credible dividend prospects will always have some value. Those that demontrate over time they can’t deliver dividends will have no value or very little value. 

Over the next 12 months of using the Matching Engine I expect that traders and the market are going to mature at a faster rate than it has. FI will become a tougher place. 

And it’s going to take a few high profile players falling over and wiping people out for those harsh lessons to be learned by many who are stuck in old habits. That could happen next week or in three months but it will start to happen.

These losing traders will pass that money on to the traders who don’t need to be taught why holding highly speculative and overvalued players is a bad thing in the new world of the Matching Engine.