Updated: Feb 3
The Footie has been dropping recently and some traders are starting to panic. Meanwhile, the average price increase across the 32 players highlighted this month is 11%. This shows there is still massive profit to be made, if you buy the right players.
Why are players dropping in price?
13 out of the top 20 fallers this month are Premier League players. This is a market correction from when Premier League players were rising at the start of August. My first market trend blog was ' Market Trend Highlighted Players #1 Premier League Players Rising!' and now those who are not performing as well as expected are falling back down again as traders sell these players.
The vast majority of players currently on the decrease list have increased significantly in price over the last 3 months. Traders are now taking their profit and selling. Some traders are also anticipating a deposit bonus which is leading to withdrawals too and less deposits
Knowing when to sell is one of the hardest parts on Football Index. You can read more about when to sell here. In general, once a player has increased a significant amount and there is not upcoming events which could push the price of the player up further - I would recommend selling.
It is the lower end of the market which is continuing to rise at a much greater rate than the higher priced players who are starting to drop. The reason for this is mostly because there are more opportunities to make large profits at this end of the market.
Should you keep players when they drop?
It depends on the player, but, in general I would recommend considering if event X happens to player Y, how will this impact the player's price? And how likely is event X to occur? Bernardo Silva scored a hat-trick at the weekend and although he did not earn dividends - it is still interesting to see his price is the same as it was before he scored the hat-trick. If an under £1.50 player that is under 23 scored a hat-trick, there is no doubt his price would fly up.
Therefore, unless you think X is likely to happen and that if X was to happen their price would increase - it can be best to sell a player if you are already in profit on them, especially if there are better opportunities elsewhere. It will also depend on many factors such as; if they are a short or long term hold, how much they have dropped, likely dividend yield and where the market is heading. The site should be able to help you with where the market is heading and help highlight key players.
In August, Marcus Rashford's price increased over £1 and has now dropped back down £1 this month. I would recommend considering a player's 3 month graph when deciding whether to hold or sell. If they have increased massively in price in a short space of time and there is no longer a strong reason to purchase the player, often it is best to sell. Rashford's price has now dropped so much that because it is close to his price from 3 months ago, it may not be so wise to sell any longer.
How to profit from the market dropping?
You can either adapt and change your trading strategy, be patient and keep your current holds until they rise or try and combine a mixture of both. I would recommend adapting if your portfolio has been stagnant or at a loss and take the cost of commission if you can not see your player's prices rising significantly again in the short term.
I suspect many of the higher priced players that are actually quality, proven dividend winners will rise again when we get into the late stages of the Champions league, especially those that are stand out players for teams playing in EURO 2020. However, for now I would recommend attempting to trade player's based on market trends (Including buying youth players) and trying to spot (Using the highlighted players blogs) undervalued, cheaper player's based on future potential dividend returns
One final point, just because a player has dropped in price - it does not necessarily mean this is a good opportunity to buy more. Often, the player's price would have been a lot lower 3 months ago and they became overpriced which led to a future sell off. Yes, they are likely to increase again if they are relatively young, but, a player that has decreased in price does not become any more valuable than a player that has not decreased in price.
Who should I buy?
There will be more highlighted players later this week as I update the EURO 2020 Qualifiers database and find some more gems. For now, these are some of the criteria of players which I think are most likely to rise over the coming months:
Young (Under 23's)
Likely to be playing in EURO 2020
Likely to have transfer speculation in January / over summer
High quality players
Potential to suit the PB matrix