Welcome to the community. If you're new to Football Index, there's a lot to learn, and a lot to enjoy! If you want to know how to make the first steps forward on the platform, you're in the right place. We've got 10 tips to improve your trading strategy from the get-go!
1. Read the rules. Twice!
We couldn't possibly stress the importance of this enough! Before you even deposit, you should understand what Football Index is. If you've not been to the Football Index academy page on their website, then head there now. If you need a reminder of the rules then perhaps our guide could be of help too! It gives you all the basics you need to know how to win etc.
Heads up - You can't understand all of this article before you understand what dividends are, how they payout etc, so please check it out first before reading on, otherwise you may get a little lost.
If you've already put money in, and started trading, we still highly recommend heading to the Football Index Academy page again to ensure you've got the solid foundation needed to build a good portfolio after reading this article. Even as an experienced trader, referring back to the index academy helps keep a tab of different promotions, so it's not a 'beginners only' page.
Why is this tip 1? Without understanding the mechanisms of how to win, you're relying on lady luck - which in the gambling world means you're destined to lose in the long run.
2. It's not a game - It's a gambling platform.
Less of a tip, but a very useful mentality to take on when trading from the outset. Of course, you trade for fun. But you're also reading this because you want to make money. Football Index is an incredibly enjoyable platform (especially when winning) but it's still regulated by the gambling commission. It's real money, which means real winnings and real losses. Try to avoid calling it a game, avoid saying you're playing Football Index, rather you're trading. You're a trader, not a player. You're gambling. Deposit what you can afford. Gamble Responsibly.
This tip is also highly relevant to the direction the platform is heading. Football Index is growing very quickly in the gambling industry and management have been hinting for a while that FI will be a hub for traders, not just your average-Joe weekend gambler. If you're new, it's best you recognise this as a platform where you'll be trading alongside some very big fish. They definitely do not see it as a game.
3. Start slowly, ideally without money.
No money - what?! Watch the market for a week or so before you put money down. If you've already got money down, then refrain from putting any more in until you've seen how the market is moving.
It's easy to discover Football Index on Day 1 and think you understand how it works, even after reading the rules. In reality, the market acts very differently to how you'd initially think. The Top 200 often surprises traders for a whole host of reasons. How is Sancho nearly double the price of Greenwood? How is Foden more expensive than De Bruyne? Why is Dybala spiking despite Ronaldo scoring etc...
The Wonderkid Bias (capital appreciation), The United Bias (media domination), Temporary Promotions, Transfer Speculation Rockets and Crashes, the PB matrix. All of these phenomenons are known and recognised by experienced successful traders, but new traders will not understand what many of these mean - or where in the market they can be observed. But don't worry - you'll easily learn in the coming weeks.
It takes time to understand the movement of the market, to understand when a player is rising or falling - and why it happens. Sometimes, a player will score a hat-trick and rise £0.01. Other times, a player is simply named in the starting lineup and rises £0.15. It won't make sense to many new traders. Only when you watch the market can you truly see what's what, and at least recognise a trend even if it doesn't make much sense.
If you're new, you're probably itching to get started and make an investment. But watching the market for at least 1 week after signing up is a genuinely smart and respected move.
Read the rules, understand what the platform is, then understand how the market moves. These are three concrete pillars that cannot be undervalued before your money is locked on a bet.
4. Buy single shares in different players
It sounds bizarre, because in some cases that single share could be less than £1. It's an odd bet. However, you'd much rather build a diverse portfolio of single shares, all the while gaining FI experience, than drop on 100 shares in just one player. If that one trade goes downhill, you're going to have a totally negative perspective of Football Index. If you're losing money and haven't really learned a lot, you'll probably not feel that eager to deposit more money. Your time on the index is either 'sell at a loss and move on' or 'hold tight and hope'. Both are not fun and you'll unfortunately feel disappointed.
If you buy single shares in a few different players, you'll be able to observe which players move in the market, which ones are stagnant, which contend as PB dividend winners, which look like short term flips, which are longer term, which turn up in the media. It's far more engaging to have a diverse portfolio than lump on one player. You'll learn a lot, lose a little - and if things look as though you've got the hang of it, you'll feel far more confident in putting money into the platform and succeeding. Diversification is still a core part of every experienced trader's strategy, as it reduces risk and maximises the number of ways you can win.
5. Don't underestimate dividends
The classic new trader sees some very expensive players in the top end, and some very cheap options in the lower. It's very easy to lean to the budget end for obvious reasons. However, there is often a reason that they are low value. That's not to say that there is no value in cheap players, but they often aren't a dividend contender. You'd rather one diamond than 10 stones.
I personally traded throughout all of 2018 focussing on capital appreciation - that is, buy shares at low cost and sell at a higher price. I completely ignored the idea of winning dividends. Since then, I learned dividends are a massive bonus. The dividend structure has also been drastically increased. Dividends are a cash payout on a bet, they're a gift that keeps on giving. They top up your account and in many cases build profits without capital appreciation at all, offering wealth to your portfolio without it being locked up in share value.
If you focus too much on share values increasing, solely building a strategy on capital appreciation, you'll be looking at your portfolio without seeing much change. Fair enough if you're happy to buy, sit tight and sell in two or three years time. But for many traders, having a couple of dividend contenders in the portfolio makes the Index far more exciting each week. It's also worth remembering the only reason your shares will really increase in value is if another trader believes the player will win dividends down the line.
Diversifying your portfolio makes for a safer investment, offers more ways to win and provides a more enjoyable experience. Don't go all-in on your first hand.
6. Don't Panic Sell.
Your bet is valid for three years. If your player is dropping in value, remember that in 1000 days time they could be one of the greatest players in the world. You're betting on their future. If you bought shares expecting long-term growth, you probably had your reasons at the time. If they haven't come to fruition just yet, it doesn't mean it's a failure. Be patient. The market can be volatile for a number of reasons. It could simply be that one trader has listed 5000 shares for sale in said player, which would shorten the price a few pence. That single trader alone can't cause the crash, but some traders see this dip and fear that the player's value is plummeting. They then list for sale - and the snowball turns into an avalanche.
We're not saying 'Don't sell before three years'. A career ending injury, a transfer confirmation to a non-pb league, a strong suggestion of retirement etc may carry plenty of weight to offload shares before you'd intended. Perhaps you'd rather take a loss and free up some capital to trade elsewhere. But so often on the index, a player dips and then rises again in the same season. If you keep your cool and remind yourself why you bought the shares, the chances are you'll find yourself in a more profitable position.
A simple example is Erling Haaland. Upon confirmation of his move to Borussia Dortmund, many traders offloaded because he wouldn't feature in the media anymore and he didn't make a move to the Premier League. He crashed around 25% over a few days. Then, he hit the ground running and became one of Europe's best strikers in the second half of the season, doubling in value. If you'd panic sold in January, having originally bought him because you believed in his ability, you'd be kicking yourself for not keeping your cool and believing in your bet.
7. Don't FOMO Buy (fear of missing out).
Ahh. Inside-out Panic Sell. Many experienced traders love this, because so often new traders jump on a bandwagon without realising that they're literally handing profits to another trader. Here's the scenario:
It's the early kickoff on a gold matchday. Geoff is watching a 20-something winger for the first time, putting up a decent performance in the first half as he bags an assist. He then scores in the second half and Geoff sees his price move £0.03 in the squad players list. He pulls the trigger on the Buy Button. 'YES! He's good!'. The winger is subbed off to a standing ovation and Geoff feels pretty confident that he's just made a top class investment.
Geoff doesn't know the player's stats. Geoff doesn't know the player's PB history. Geoff doesn't know the player's contract, background, national side interest, proneness to injury, set-piece roles. Geoff doesn't know how often he's even featured for the team in the last 12 months, if he's on loan or destined to move in the summer. Geoff doesn't even know if he's going to win PB today.
Don't be Geoff.
Geoff has bought shares from another trader, who probably considered some, if not all, of these factors BEFORE the match. The new player hits a PB score of 190 but it's not enough to win PB dividends. Geoff is happy with IPDs, but the next day the price drops a couple of pence, and the instant sell price is even worse than when Geoff had invested. There's a chance the player is as good as he looked on that day Geoff bought him. But Geoff definitely feels he joined a bandwagon and bought shares at a peak price. Why hasn't the value risen further? Why did his price drop again?
Take our word for it, you'd much rather do the research and make an educated judgement on the player's value and potential - compared his price to similar players and then bought him at a lower value, ideally by bidding, if you still thought he was as good as that 190 PB performance.
Don't buy after a goal. In fact, try to avoid buying on matchdays at all. Trade proactively, not reactively. Others will be profiting from their own anticipation and your lack of awareness. Share values rarely rocket on a matchday, and if it does (take Greenwood as a recent example), it's because of a more prominent factor (media dividends, united undefeated streak, wonderkid hype).
The most important part of any investment and the heart of this entire article.
What would we class as good research?
Trading on Football Index is as much about numbers as it is Football. Knowing player stats are a bare minimum to justify putting money down. Goals, Assists, Clean Sheets are the surface. But the PB matrix factors in far more than that. Team wins. Passes. Dribbles. Long balls. Penalties missed. Ball recoveries. There's a whole host of data factored in to the PB matrix that means some of the less obvious players are actually BETTER investments than the leading goalscorers. The PB matrix is defined by Opta Stats. Opta isn't freely available, but there are plenty of options to do some basic research. whoscored and transfermarkt are two popular sites, but you should explore which stat provider you prefer and get familiar.
PB Stats, Price History:
Then there are the FI specific tools. Index Gain is our go-to. There are free tools that offer the basics of PB and historical dividend winners. Their Premium tools offer a treasure chest of data that can educate traders to make their decisions using historical stats, rather than gut-feeling alone. Football Index Edge and Index Price Alerts are a couple of tools that come in handy if you'd like to take trading a little more seriously too!
Time on Football Index:
Simply scrolling through the Top 200, the trending list, the matchday rankings and the media rankings can give you a lot of information on the market activity. You can see the regulars in the media list, you can see the PB scores on a matchday and understand the correlations between price increases. Even if you don't have a clue about stats, if you spend enough time on FI you'll get an idea of who is a good investment eventually.
We are another option of course! Football Index Gurus offer user-friendly insights in the form of easy-to-read articles, to save you sprawling through spreadsheets. We reference all of our data from the tools mentioned above, so you can rest assured we've done the research using the very tools that you would use! On top of that, we write about how to trade better, not just the who tips. Give a man a fish, he feeds for a day. Teach a man to fish and he feeds for a lifetime.
What to be weary of in research?
Twitter tipsters who have no useful data. They probably hold shares and want to offload to some poor beginner. Twitter definitely does have its uses in the FI community, but it's also riddled with traders trying to muster up some hype around their own investments - some good, some less so. If they provide relevant data/reasoning then digest as you wish!
Team or Player Fan bases. They all have an agenda, their sources are rarely reliable, and they aren't factored into the media rankings. Every man and his dog has been linked to United in the past 12 months. Even if a transfer rumour is mentioned in one reputable paper, the secondary accounts that spam this news ricochet far beyond. Take caution from the media speculation, it rarely pays dividends unless it's carrying serious weight in reputable outlets.
Youtube highlight reels. We all love it. A bit of Scout Nation here and there. But try to include it as a tertiary tool to judge an investment. An 18 year old in the second division in Spain can look like Messi when he's sending a 38 year old centre half to the sweet shop. But pop him up against Van Dijk and he's going to find himself in the classroom once again. Not all wonderkids are the real deal and make it - hype swings both ways on the index so try to put things in perspective when watching highlights.
9. It's not profit until you sell.
These wise-old words by a prominent member of the FI community have aged well. Your portfolio will show a magic red or green number indicating your profit or your loss.
For many traders, this number is a false friend. It could show green, as the market value of your shares have increased over time. It shows the price you bought it at vs the price the market value is now. Great - profit then!
Wrong. This number does not factor in the spread (difference between the buy and instant sell) nor the commission.
If you were to Instant Sell every share, your P/L could look entirely different. For many traders, it would actually change the outcome from a profit to a loss. Don't take this wonderful green number on your screen as profit. Until you've sold the shares, you've not made a penny.
You may buy all the ingredients for an outstanding dish, but unless you know how long to cook each ingredient for, you're not going to enjoy the meal.
Understanding who to buy is only part of the equation - knowing when to buy and when to sell determine profits, and that isn't realised until the shares are no longer yours.
10. Understand your own bias
The vast majority of traders have a favourite team and some favourite players. The same applies to dislikes. Avoid falling into the trap of just buying your squad's top talents, because on the market that won't mean a toffee penny. Buy based on your genuine belief in the players future and their statistical profile. Do not solely go on your gut feeling that he's a top player for my beloved mid-table side and will one day make it big. Hype has a huge factor on the index, but emotional ties can prevent smart trading. In the long-run, you'll have to let go of your shares anyway, so you may as well refrain from being emotionally invested wherever possible.
It's alright if you're an Arsenal fan and you decide to avoid buying shares in any of their own players, favouring United instead based off of your research. The same goes for Liverpool and Everton, Villa and Wolves etc. It doesn't make you a bad fan. Try to trade with your head and not your heart.
So here's a run down of the top 10 tips for new Football Index Traders in 2020:
Read the Rules
Remember it's a gambling platform
Start with caution
Buy single shares and diversify
Don't panic sell
Only profit when you sell.
Understand your own bias.