At time of writing we currently have a severe lock down on Spreads, with Instant Sell often unavailable too.

This means that any mistakes are much more expensive. We can no longer rely on FI to bail us out cheaply from a bad decision for just a 10-12% loss. That loss may be 40-50+%.

As a result the reckless trading particularly on hype and speculation that has become normal on FI is more risky than ever. We have to adapt and get out of these bad habits.

We do not want to be caught holding overpriced and overrated players in a time like this. And there is zero need to do so. Profits are in my experience higher and more sustainable when selecting high quality players.

Trading in high quality players also gives us more options if something goes wrong, since we can always hold them and wait for the trends to shift or for them to get a performance win. 

And this is something that we need to get used to anyway.

In general, spreads have increased this season. Particularly for the sort of trader who likes a short term flip or holds very high priced players it has caused some upset.

Many spreads have increased and this tends to happen when: 

a) FI think a player is high risk, either because their price outstrips their dividend potential or they have risen quickly in price recently or;

b) They think a player is a likely pump and dump target.

This protects FI financially as let’s not forget, when we hit Instant Sell, FI are paying back real money. It also to an extent protects rookie traders from the flippers.

I fully expect these spreads to continue increasing. FI are clearly weening traders off the Instant Sell function. And they should. A healthy market needs to be selling to other traders, not relying on FI to bail people out of their bad and over priced trades.

Whilst FI might make a fair bit in commission from these flips and sales, the Instant Sell is a huge downside risk on their balance sheet and they have to discourage this behaviour and push people towards the sell queue. 

This is going to be unpopular with traders who flip often or who hold players at very high prices. But there is no point complaining about it – I think it is very much here to stay and FI are going to increasingly try to ween us off easy Instant Sells. An Instant Sell rightly should be a last resort, and is there in case something goes wrong. It comes at a cost.

We need to be aware of spreads when buying particularly if looking for quick flips or very short term IPD punts. 

If a player has a large spread, think about it carefully before buying.

Why is it that FI fear this player might be Instant Sold heavily in the near future?

Have they been pumped recently and therefore likely to drop again suddenly?

Are people overestimating how good they are?

I don’t think there is any point in fighting a “end the big spreads” justice campaign here as many do – I am glad FI are taking steps to protect themselves because it tells me they are a sensible company. 

Better we think about what those spreads are telling us about the player, trade accordingly, and get used to it because I only see spreads getting bigger not smaller.

15 April

Being moved out of midfield to forward is generally a great move, and there is an opportunity here. 

When there is a midfielder clearly playing as a forward (Correa at Lazio a good example) their prospects will likely improve if they are moved and the price could go up as a result.

Midfielders who are one of two wingers in a front 3 probably have a decent chance of being moved to Forward at some point. (Gnabry?). That would be positive, but this is a real grey area where it is hard to define the line between a midfielder and forward.

Therefore, I’d only hold them if they can compete in midfield anyway, with hitting the reclassification to be considered a bonus.

15 April

This is a long standing thread and re-reading the 9 Oct entry below is interesting.

I cautioned against the wave of hype for youth then, and just weeks later a lot of overpriced youth took a huge hit.

Yet, social media at that time would have told you the only thing worth buying was youth. It was very wrong, older players with performance quality sky rocketed and youth was heavily sold to pay for them.

It was the biggest and most successful moment of the season so far for me and many site members. It was a bloodbath for many others who got too caught up in hype.

Since then, there was much more caution on it and the market has matured somewhat, with a greater focus on performance quality this season than I can ever remember.

But in early 2020, big jumps for Haaland and Cherki rekindled strong interest in this end of the market. 

Once you get a jackpot win for some players, it leads people to trying a bit too hard to find the next one.

Problem is, this tends to lead people down a route of trying to find value in increasingly weak and long shot targets and then pumping them.

The lesson is not to fall for it when people rewrite history because of short term events.

We can and should trade in youth. 

But we must not become the true believer who really thinks these players are genuinely worth these astronomical sums.

There is a myth that young players are safe investments because they have so long ahead of them. They do indeed have many years ahead of them. But for the majority those years will be spent on the bench or as the impact player at Rennes.

We know exactly what usually happens with this sort of player after their initial spell of hype.

A very small number of them succeed, and breakout of the £2-3 range to get higher. Almost all of them are English and in the EPL or headed there. 

The majority of the time, after their big breakout moment where they spike north of £3 or so, the result has been a big loss thereafter, or stagnation.  

Nobody is owed a rise. If anyone says “this can only go one way” it’s a massive red flag.

A youth trend fit will get a player so far, but after that breakout moment, particularly if they are playing regularly, they are going to need real dividend prospects to succeed long term.

A breakout hatrick or other big performance is one thing. But if 2-3 months later, they have played a lot of games and have a ropey performance scoring record, that price slide will usually start.  

The key is being the early adopter. Finding players early, before they are all the rage, and being an existing holder when that big breakout moment happens.  

Before the breakout, the profit potential is huge. After the breakout, the profit potential is limited and the risk of a loss is high.

Fear of Missing Out (FOMO) is a major killer of overall returns.
But if you miss the breakout, the most profitable strategy overall is to leave it well alone and find something else.

Even if that means you miss a big spike for one player, it doesn’t matter at all. 

Our results are the sum total of our decisions, not one trade.

If you have the mentality of charging in late after the breakout in hyped players, you might get your one win.

But that same mindset has probably also trapped a trader into multiple other stagnating or loss making trades. 

The big win will be shouted about. The stagnation and losses quietly swept under the rug. 

Over time, chasing hype is a losing strategy. 

The winning strategy is to buy trend fit players and sell them to hype chasers later at the right moment because they are too willing to overpay.

I’ve done this multiple times in the last few years, often towards later season.

Cheap, strong trend fit but performance ropey players will do, provided the price is right.  

Even better are the young players with actual future performance quality as well as the ideal trend fit.

Curtis Jones and Stengs good examples from this season so far.
They are more likely to reach higher prices, and sustain them for longer periods, since they attract not just flippers but smarter traders too.

9 Oct

This is another long standing thread. In the last July entry below, we had seen lots of kids rise in anticipation of the new season, and I warned not to hold onto overpriced young players too long back then.
Young player prices are brittle, and there is nothing worse than a run of games for a hyped player where they demonstrate that they are not yet world beaters and are well behind the senior members of the squad
This will be true in all but a handful of cases (and expecting kids to outperform elite veterans is mad when you really consider it).
Since then it’s been a mixed picture. Some of them rose further when starting the season only to tank when they didn’t deliver immediately. The ineligible league hype kid, as there aren’t performance scores to expose their weaknesses, were heavily targetted recently as one of the last areas of the youth market that has not already been saturated.

15 April

We’ve got an uncertain transfer window ahead. Some clubs may not have the cash we expect them to splash around like normal. Big clubs may weather the storm better and will be able to exploit smaller clubs who become desperate to sell.

And we may have a much shorter window between seasons. Or the window could end up running alongside the new season for an extended time.

This makes transfers arguably more unpredictable, though in some cases we might think some smaller clubs may be more desperate to sell than usual.

If football returns in May/June it will seriously suffocate a lot of mid to low tier transfer gossip as it will share the limelight with actual football. Transfer gossip could flourish though if we don’t see football until August/September.

My takeaway from this is that we should still be involved with transfer players particularly as a hedge against this season being scrapped. BUT. The best targets are the hybrid performance/transfer players particularly where they have the possibility of a great transfer without being totally dependent on it. If they are still decent at their existing club, that’s a big positive here.

I will strongly avoid players who overly depend on getting a very specific transfer and have little real quality. If that transfer link dies we can expect to take a 40-50% hit and that just feels like a stupid risk to run. Social media / chat groups will be loud about these picks because they need people to follow into them. I’ll ignore it all.

22 Jan

This is primarily a note for newer traders who haven’t experienced this yet.

It’s very tempting to trade in the bargain basement end of the market, the potential % gains are huge. But so are the potential % loss.

This end of the market is a shark pit and is typically occupied by traders whose business is exploiting the “greater fools”.

Because these players are low volume, it is very easy for a trading group or whale to pump the price and get it rising, hoping to trap inexperienced or bad flippers into the trade. 

Unless you are deliberately playing this game and know what you are doing, it is best to steer clear of this kind of trade as the losses can be brutal. 

Whilst gems can be plucked from this price range, you really have to know something 99% of people don’t. The vast majority of the time, bargain basement prices mean bargain basement players.

Trade them with extreme caution and be wary of piling in after sharp rises.