I hope my insights last week were helpful. It’s been a profitable week making a Return Of Investment of 10% but I believe even more opportunities exist.

FI is expanding rapidly with new traders meaning the Index will naturally increase in value.

This week has taught me the value of blue chip players like Ronaldo, Messi and Neymar surging ahead. This leads me to ponder on how to develop a profitable strategy on FI.

The best strategy is the one that makes the best returns for you. The central point is that no one strategy works for everyone, if that existed I would have found it and given up my day job, it’s what works best for you.

The first thing to establish your personal strategy is how much time you have available for FI.

The markets fluctuate dramatically every day giving opportunities. Some traders react to news events rapidly to buy low and sell at a profit. This requires time to research, monitor and react to events quickly daily. Meaning large amounts can be won and lost by timing the market correctly or incorrectly (Twitter is key to this strategy).

As with all strategies it’s important to not get emotional about wins or losses. I have tried this strategy when I bought Van Dijk due to transfer news about moving to Liverpool. I lost over 35p per share then sold at a 15p loss and now as per below he’s back over the peak. It shows rewards and risks as I could have sold and re-bought and make large returns if I timed the market properly. It highlights why you should establish the points when you will liquidate your holdings.

Have exit strategies before you buy players and execute that strategy unemotionally, be patient, trust your strategy, as most players will bounce back. As the market is 24/7 this flipping strategy is not feasible for most people.

A long-term strategy might work better e.g. some traders have 80% of their portfolio as long-term buzz magnets and 20% short-term.

If you’re buying long-term you need to be confident you are purchasing footballers at value. Suarez below was a prime example of a value target. I bought him in June for £1.25 and he’s has now climbed to £2.22. I am still holding him even though he has reduced in the last week. He will increase as Messi is at £4.40 and to cover myself I’ll sell 20% of my holding to take profit. Blue chip players (Messi and Ronaldo) are great long-term as they will win Opta and media buzz giving dividends, covering any temporary loss.

The advantage of the long-term strategy is little active time is spent besides early research however you sacrifice an element of return (injury’s destroy this strategy be careful). Also you need to monitor risk, the popular way being to diversify your exposure.

Prudent traders own different footballers, some buzz magnets, younger up and coming footballers and Performance Buzz players. This means that bad news will not affect all of your holdings or otherwise affect them to different degrees. This leads to your risk appetite which you need to understand. Your risk tolerance is how you feel about risk and the degree of anxiety you feel when risk is present which will steer you towards a short or long-term strategy.

With more experience risk reduces as you understand the market but remember the best risk management is only investing what you can afford to lose.

A further strategy is buying on the rise and selling on the drop. Buying early in the rise catches the trend and selling at peak realises good profits. My own rule is to hedge your risk by selling a portion of your investment on the rise.

A practical example of this is when I bought Lukaku early before he moved to United. I sold him at a modest profit, he then went up by over £1 and then I had to buy at peak. He consequently dropped about 10% but has rebounded, the lesson being patience learnt from the Van Dijk mistake. So whatever your personal strategy you need to believe in it as research shows long-term it should prove successful. The index is always a constant learning exercise be flexible to changing trends. Your strategy will develop over time but again having belief in it is key for your long-term success.

Football INDEX is a stockmarket game where players, known as Traders, take a position on the “future success” of footballers with real money – CLICK HERE to play and start winning, and take advantage of your £20 cashback only with TheGamblingTimes.