Archive for May, 2009

In the stock market they say, “Cut your losses and let your profits run”. In this video you can see us ensure we never lose money, but we keep our upside open to get the maximum potential profit. A fairly intuitive strategy.

It was quite amusing to see my previous post a few months ago, suddenly spring to life.

http://www.betangel.com/blog_wp/2009/02/25/biggest-premium-charge/

Unfortunately it seems to have been hijacked into an anti in-running fast pictures debate. This is quite amusing as the charges, note the question mark on both posts, are nothing to do with horse racing and definitely not in-running. I guess people will always try to stir up controversy if it suits their agenda and that’s probably the motivation to incorrectly pin this to in-running horse racing.

I’ve no doubt that fast pictures were an advantage a few years ago but all markets get more and more competitive over time, not less. This edge is one that has been significantly eroded. After All, the best way to beat it is to turn up to a course and that’s available to everybody. The main problem still revolves around the fact that it is possible to beat the delay, that’s another debate all together!

Manic scenes on Monday at the last race at Leicester. Out of the original 14 runner field six horses never started the race. Not unusual for non-runners, but five of these horses made it to the start but never got into the stalls. As a result of the non applicable reduction factors Betfair SP returned 98%. Not such great news for layers!

I don’t have extensive records for this, but the records I do have go back about three years and I’ve never seen this before. I’ve seen three in one race before but never five horses at the start that fail to run. Technical failures have caused problems in the past. I remember a race at Redcar where only half the stalls opened which obviously caused problems. But five non starters due to failure to load, must be some sort of record?

I must admit to quite liking relegation markets. On top of my Southampton bet, I had a nibble at West Brom to be relegated, their escape look totally improbable. Today we have a whole multitude of opportunities.

Based upon past experience, backing or laying the field will throw up a bundle of opportunities as the afternoon progresses. You can see Newcastle and Middlesbrough perhaps getting something out of their games but Hull? If Hull hold on or even take the lead the market could shape up significantly differently. We also have the added interest of what team Man Utd will field given the proximity of the champions league final. Keep an eye out on the match odds market when the team is announced. Last night Barcelona fielded a weakened team against Osasuna, I reckon that Ferguson will follow suit.

Middlesbrough need a miracle, especially given their track record. An away win by four clear goals at West Ham would see them have some chance of safety. But with the relegation market priced at 1.03 their fall from grace looks almost sealed. That is effectively pricing in a 97% chance of that result not occurring. If you thing they have a better than 3% chance of a pulling off an away win of four goals or more you can lay. But I have to say at 33′s that doesn’t look a lay to me!

Just broken a nice winning run today.

Until the 15:35 today I had managed to get 47 winning races in a row, not my best this year but my best for a little while and a welcome relief from a month that has brought a lower strike rate than average.

Of course, your strike rate is directly related to your maximum likely winning run and losing run. Take more risks and your strike rate will fall, less and it will rise. But it is how you perform over all that matters the most, you have to strike a balance. People also cope differently to winning and losing runs and the impact of different styles.

There is no point in having a high strike rate and making big losses when they occur. Scalpers will have a high strike rate but big losses when they occur and swing traders the opposite. Lots of small losses when they get it wrong followed by big gains when they are right. Both show different characteristics but both will fail if losses get out of hand. This is why a lot of people have trouble using both at the same time, each of them require a different mindset. If you can do both then that’s a big step forward.

I have finally got round to the last part of this mini series of posts. Sorry for the delay but we have been busy working on some completely new tools for Bet Angel and that has drawn a lot of my attention. For my sins, I’m always the front line when it comes to testing. Thank fully the new stuff is all working well and we forward to bring you something, just a little bit different.

To reprise, as an experiment we thought we would enter the market at random by backing the favourite at 1pm in the afternoon and leaving our position completely exposed. We only closed out at the official off time. For reasons too complicated to explain at this time, this is one of the riskiest strategies you could adopt.

First off, I don’t recommend you do this, but you can see that we didn’t do too badly. Our stake was £1 per tick or a maximum of £100, so we only lost a tiny part of that in return for taking unbridled risk. The reason this happened is that when the market moved in our favour that helped us, when it didn’t work for us the downside wasn’t actually that bad. If we would have limited our upside to one tick the P&L would have looked significantly worse but by catching the swings we have benefited. Volatility can help as much as it hinders. You can also learn a lot from this P&L, as striking out one of those bigger errors would have made us profitable on the day. Closing out good trades before they turned would have also helped. In short it wasn’t a massive leap to profitability. We just needed to minimise our mistakes.

Compare this P&L to one where we have managed our risk, we also limited our stake to £10 tick sizes.

By managing our risk, I mean we have avoided trying to get a move out of a race that is unlikely to produce one, we changed strategy. But we were also focused on cutting our losses where we get the direction wrong, riding our profits when it is right, and closing out as best we can. You can instantly see the difference. A big improvement from the random version. Rather than just adopting a one fits all strategy by varying our outlook on the market and using a bit of intelligence we have turned things in our favour.

Obviously I’ve had many years of practice, but the same elements I use can be adopted by others. It’s really as simple as making sure you maintain your discipline and avoid obvious errors. Imagine teeing off on an 18 hole course, in your hand a putter. You will no doubt perform worse than somebody with a full bag of clubs. That is why I suggest that when you look at a market, you don’t wave a putter at it. You will keep moving forward for sure, but not as fast as somebody who has just driven the ball 300 yards down the fairway! It’s a competitive world out there so make sure you do your best to compete.

Not exactly an appropiate name  for the moves seen on this horse. I was hoping for a good finish to the day and landed this wild ride instead.  My P&L was all over the place but I managed to regain my composure for a £40 profit, but this was one manic end to the day!

I say this far too often, but there have been another two excellent candidates in the last week or so.

On Friday 8th at Aintree we had one of the clearest cut swing trading opportuntities I have ever seen, almost the perfect set up. Not only was it very likely to be a good swing trading opportunity, but for any savvy trader active on this race there were several clear markers laid down as to where you should get involved. The price rocketed from 2.00 to 2.78 in double quick time. It was one of the lowest risk to reward trades I have seen in some time. I was in dialogue with somebody during the trade and he can tell you just how excited I got, it was a great trading opportunity, as long as you were not scalping!

Aintree 20:10 - Trade of year?

The most recent stand out opportunity was on Saturday at Uttoxeter. Insignia drifted from 3.5 to 9, a 550% return on your stake and then came right back in to 4.50, another 450%. If you managed to catch them both perfectly you would have walked away with 10 times your stake in profit. Look at the graph though and you can see that this wasn’t at all  as clear cut as Aintree, this was a very challenging trade. But it was still an outstandingf trading move. Conditions were good last week and despite my early week mess up, I actually had an excellent week overall so I feel very positive about the month as a whole now.

Steamer or Drifter?

Just a quick note to to let you know of two people who are running this weekend for charity. The first is the nephew of the late Will Johnson.

Will was a Bet Angel customer for some time and was the key to spotting the initial cross matching algorithm that Betfair implemented without warning. When Will dropped me a email, we were quickly able to compare notes see there was a significant change prompting me to escalate the issue to Betfair for an explanation. Sadly Will passed away last year at the age of only 20, he suffered an unexpected gastrointestinal hemorrhage while in Spain.

http://www.justgiving.com/josephlloyd

Bet Angel user Darren Hall is running the senior race and looking for sponsorship as well.

http://www.justgiving.com/bet72

I am also running in a race this weekend, but I’m not looking for sponsorship. I’ve run 2-300 races in my time so it’s definitely a case of charity fatigue from those that I know! Don’t let that stop you offering support for either of the runners this weekend.

Just a quick post to introduce you to the new ladder features you may not be aware of yet. We uploaded this video which gives you a view of some of the key updates. Click here for the high quality version.

Betfair announced on Thursday that it has filed an action with the civil district court of The Hague against the Dutch government — alleging that the government has actively called for payment blocking on gambling Web sites.

Also launching a formal complaint to the European Commission, Betfair said its actions come after the Dutch Ministry of Justice reportedly issued a letter “urging Dutch banks not to process payments from any Dutch customers wishing to place a bet on any legal gaming Web site”

Calling the Dutch Ministry’s move “desperate,” Mark Davies, Betfair’s managing director, said that it also goes against Dutch consumer interests and “fly in the face of the EU principles.”

“It is madness that the Netherlands, as one of the founding members of the single market, has resorted to illegal tactics that prevent consumer choice and go against the treaty,” he said in a company statement.

Ever felt like somebody is deliberately trying to coax you into a mistake when you trade?

When I first started trading I wasn’t sure why the market did what it did, but my response to this was was quite simple and something I have always done in any market I have participated in. I started keeping detailed records of everything I did.

Sounds incredibly dull and uninteresting, but it’s actually the core of any successful strategy. What I was looking to do, was to strike out any obvious errors and look for failure points. Profit or loss is such a fine line, by striking out errors  you can  start to turn things in your favour. By looking for failure points and looking at your loss rate,  you can learn what task  you have ahead in order to turn profitable. When things didn’t work out as planned, I simply looked at my records. I was looking for some comparison, explanation or correlation to any previous results that would explain why something didn’t work. I could learn form that and over time, striking out those errors or adapting your behaviour allows you to morph into a core strategy.

This is how I figured out a one fits all strategy just isn’t effective if you want to get really successful. Some strategies work well in some markets and others perform better elsewhere. You should also be aware that some people fit some strategies better than others. Learning about yourself is all part of the process.

Learning to win is one thing, but losing and learning why you lose is critical in the scheme of things. Over time I have got better and better at identifying what I should do, when and why. This also has the dual impact of reducing  the freqeuncy and scale of your losses allowing you to put more and more money through as you feel more comfortable with the downside risk you are taking.

My first bet on the exchanges was £5, I now bet millions a week as my focus has changed from not just try to do the right thing but trying to do it with as much money as possible. You too can achieve the same thing with some hard work and by looking long and hard, not at your wins but particulary your losses. It’s a losers game.

Interested to see the market is pricing in 2.6-2.7 goals in the Chelsea match this evening, slight advantage to Barcelona. Of course, the scenario is similar to last night but more finely balanced, lets hope the match turns out that way as well!

It’s also interesting to see the draw being laid / teams being backed ahead of tonights match, this happened last night as well. Looking forward to the action this evening.

With Man Utd in zone at the moment with a 2-0 half time lead against Arsenal, they wouldn’t have wanted the half time break. In contrast Arsenal desperately needed it. Now Wenger’s managerial skills will be tested to the limit and if it has the desired effect Arsenal will come out all guns blazing, excuse the pun.

Meanwhile, Man U just need to keep it tight at the back. If you have already made some cash, consider laying Man U in the second half with some of it. With the price of Man U now at 1.15, laying some profit back could prove a useful tactic in the second half. Downside is slight but the upside potential is good, given the incentive for Arsenal.

Arsenal must score, so you wont catch me betting against a third goal! Arsenal will have to throw men forward eventually so that third goal is highly likely from one side or the other in the second half. Either Arsenal will throw enough men forward to score or Man U will catch them on the break.