Probably the most practical trading problem we have in recent months is the dilemma of what to do with struggling players.
When a player’s price is low the natural inclination is to want to sell as it feels like they are unpopular and it’s human nature to want to stick with the crowd.
Sometimes, we might not be able to sell at all and that feels even worse. Will they ever recover?
But being pushed around by price movements alone is generally the mark of a bad trader.
We want to make sure that our own judgement of the player’s career path, real match data, trend fit and the events to come are at the heart of our decisions.
Let’s look at some practical examples from recent member emails and my own portfolio too.
Ben Chilwell - Chelsea
Problem: Good player dropped by a new coach
Why was he a good pick?
There was a great moment to pick up Chilwell this season. Just after his Chelsea move was confirmed there was a price dip as some people followed a somewhat robotic rule of selling the transfer.
Sometimes that is a good thing to do, sometimes, not so much. And it generally depends on whether the player can actually succeed at the new club for the money you are paying.
Chilwell’s early numbers at Chelsea were very encouraging and as per Scouting at the time, you could pick him up in the £1.75 range (a more modest price by September standards than it sounds now!).
He went on to reach £2.74 and with some dividends along the way. A generally good result for diligent scouting and exploiting the predictable behaviour of some traders.
But then Tuchel threw holders a curve ball.
Trusting the assessment of the match data and buying when others were selling paid off under Lampard.
Under Tuchel, Chilwell started the first game and things seemed fine. Then in the next Alonso started. That was perhaps no cause for immediate panic – it could just be a new coach trying his options.
But when Alonso played well, was praised, and started the next game, that is probably when alarms bells want to be ringing. And indeed if we go back to 5th February Scouting this is when I started wobbling on him.
It still wasn’t a clear cut right or wrong decision. But I think there is a decisive factor here we can learn from this trade. Whilst we can trust Ben Chiwell to win when he plays, we can’t trust other traders to hold amidst obvious bad news.
In this nervy market, I think it is best to be less patient than we have been previous seasons. If we have a good player who hits obvious bad news we may want to react quickly and lock in a price whilst others are still wondering whether he will start the next game or not.
We can shift that money to a player who is also value without an obvious problem. And spend less time umming and ahhing over our problematic player.
However the window to make that quick call to sell can be short. Selling Chiwell in early February for around £1.25 to £1.30 makes sense given what else you can do with that money, even accepting the risk that Chilwell could have started the next game and bounced nicely.
Once we have missed that window and he has dropped already, I would suggest that selling Chilwell at 85p now seems too pessimistic. He’ll get his chances, and as per Scouting he retains a strong chance of winning when he plays.
In these situations where a good player hits a sudden roadblock, it is probably best to act fast this season, putting aside all the rational arguments about them actually being a good pick and just accepting that other traders aren’t going to be aware of all that, or might be too afraid to think clearly.
If we miss that window and the drop has happened, then we probably want to do the opposite and stay patient, particularly if we believe the player is now significantly undervalued and can recover.
Pedro Neto - Wolves
Problem: Too pricey now versus others?
Why was he a good pick?
As a long term pick, Neto looks solid. Potential performance suitability in the range and a credible chance of a move to a bigger club, maybe even this Summer.
He could even win now, although at Wolves it’s more of a struggle. I rate him right now which gives him 4-7 realistic dividend challenges per season. And he is on course to meet that.
What went wrong?
Nothing. It was a good pick that has gone well.
He’s doing a lot right with good performances and he’s not a million miles away from wins. He’s risen nicely in the last month.
He’s currently £1.50 to £1.68 retaining a good degree of trader confidence and the 36th most expensive player on the platform by Blue Button.
But is he the 36th best pick? I would say not.
Fixture schedule is mixed with tough games versus Leeds, Villa and Liverpool to come though Newcastle may be an opportunity.
Neto was a great pick a few months or even weeks ago. And there is nothing wrong with holding Neto long term either.
But at the moment, we may find it is better to exploit the confidence people have in him and the lack of confidence they have in other good players.
Cashing this out in favour of a cheap bid on a player with equal or better potential available in the £1 and under range is probably the optimal move.
Whilst Neto is a good long term pick, chances of a short term win are fairly low at Wolves and the transfer window is still far away.
Despite longer term confidence in the player, I would probably change horses here. Where a player is popular but without an obvious big event soon I would probably take advantage of what liquidity there is in the market and hope to exploit traders who are undervaluing other good players.
Alternatively, if a player has good liquidity at a fair price but has a big event like a CL or Europa game, or is performing well at a big club so wins look likely soon – I’d be much more likely to be sticky on them.
But where wins are going to be occasional, it may be better to make the switch.
Antoine Griezmann - Barcelona
Problem: Champions League Upset
Why was he a good pick?
Griezmann has struggled this season yet particularly in recent weeks has improved and is regularly producing some excellent FI friendly numbers.
It’s a pity he chose to finish his chances mainly in Cup games in January/February or that would be more obvious to many in the scoring!
But the potential for more big scores and wins is there and he is back on my Explosion Imminent list right now which is my way of indicating a high degree of confidence.
So, picking up a player who is likely to win whilst others are feeling negative on them is often a good move. If he does win, you’ve got a dividend for cheap, and if picking him up from a low bid of 70p-80p that price can bounce very sharply based on just one win.
He also, as far as we knew, had a decent shot at a CL campaign to come where he would be well in contention for Gold Day’s.
He also has background factors like being France’s best performance player with Euro 2020 in mind. And the prospect of improving at Barcelona, particularly if that ball hogging Messi character leaves. Or a big Summer transfer to PSG or similar where he could become an FI powerhouse.
What went wrong?
The general lack of finishing and inconsistent fan and pundit reviews is an issue. But not one that overly concerns me. This kind of sentiment is fickle and as long as he is showing good numbers then the player is likely to over perform those low expectations – which can be the best way of getting a price rise.
Whilst PSG was always a tough game Barcelona were increasingly favourites particularly once Neymar was out of the picture. There was therefore significant disappointment for holders with the result. Griezmann took a hit along with other Barcelona players.
Despite this set back, I would not consider going for Griezmann to be a mistake. In fact, I would consider it a good evidence based call.
There are multiple reasons to make this trade, the CL is just one element of that and whilst an early exit is disappointing as it is a missed opportunity for Griezmann to win big Gold Nights, it is not a disaster.
He can still perform well in La Liga this season and next, has Euro 2020 in the locker and a possible good transfer.
I like this sort of trade where there are multiple ways to win – because when one is closed off like the CL here, holders still have plenty of options.
I’d consider an Instant Sell just because of the result on Wednesday to be an error – selling for 69p as of now is seriously undervaluing him and potentially costs the seller a big rise later.
For really optimal results with active trading, we could try to act very swiftly during the game. If we think Barcelona are going out (perhaps on the 2nd/3rd goal) but a bid closer to £1 is still available it could be worth selling then, hoping for a crash and then picking him up again after the dip.
For this reason, when dealing with knockout football, it is better to be more active than usual and watch and trade during the games if possible. One bad domestic match doesn’t matter so much, but in the knockouts one game can really turn a players fortunes – particularly if they do not have lots of other reasons to hold them like Griezmann does.
Someone like Ronaldo as an older player with a lot to gain from a CL run could be very vulnerable to a knockout for example. But at least he has Euro 2020 as a back up. I like to retain a good late season reason to hold a player which could be a long run in the CL or the Europa, Euro 2020 or a good Summer transfer.
His team mate Cuadrado would be another good example of a player who will suffer harshly from a CL exit – he has no Euro 2020, is older and has no transfer prospect.
So we would want to be more twitchy on him than we would on Griezmann who has other ways he can fight back.
Karl Toko Ekambi - Lyon
Problem: Hammered by the removal of IPD
Why was he a good pick?
Ekambi offered strong IPD potential at times (notching 5 goals and 3 assists well inside a 30 day window in November to December for example). That attracted some buying pushing him from 35-50p to 76p. That price rise plus the IPD made it a very strong percentage gain.
But traders were wrong if they considered him a pure IPD striker. He is also capable of outright wins and shows some really performance friendly numbers at times.
What went wrong?
IPD’s abrupt removal hit him hard and fast. (This was not entirely unexpected it had been discussed for weeks – but I thought they might gradually reduce it rather than whip it away).
The fact that he can win outright was lost on many – in a panic people just react and whilst we may not agree we have to be aware of this and respect it. Sometimes having too much knowledge can cause us to over think things.
As soon as the IPD news hit, there is little to do other than smash the sell button on any such players considered to benefit strongly from IPD.
This will have hit most of us to some extent, and the key here is overall portfolio management. Whilst the profits available in the last months of IPD were simply too good to ignore completely, it was always reckless to do what some did and completely gear our portfolio towards it.
We can and should lean in to trends like this perhaps with 10-20% of a portfolio, but generally we want to keep the bulk of our portfolio within touching distance of the true purpose of the platform and rational values.
However, once that manic selling of any player considered rightly or wrongly to be an “IPD Striker” is over, value opportunities are created.
Whilst some of the more obscure mid to lower level strikers are indeed dead and buried, hope is far from lost for the big club strikers particularly where they can get access to CL/Europa nights and Euro 2020.
As Lukaku and others have proved recently – FI is already a goals centric platform and if you can score 2-3 regularly you will always be able to get yourself into contention particularly on big European nights like Mbappé and Haaland just did.
Incidentally, I would strongly argue against proposals from some that FI should reward goalscoring even more – this would likely make winners too easy to predict and result in a very stale market. Goals are rewarded very heavily already.
There are other ways to bring in players people want to see winning more like Mbappé, Salah or Mané. Haaland is more of a struggle as he does very little other than score.
As soon as an announcement obviously hits a player like this you sell if you can as soon as you can. Simple as that.
Once the price has dropped already as it has here with Ekambi available for probably 30p or maybe even less… selling makes little sense at all.
He could win now with Lyon in good form. Lyon should be in the CL or Europa next season. And with stars like Depay and Aouar expected to move on Lyon may lean even more on Ekambi.
If looking for a long term value pick, I would try my luck with an insulting minimum bid of 28p and see if a trader who considers him to be a dead and buried pure “IPD striker” is willing to take that low offer.