Posts Tagged staking
The birth of a strategy
Posted by Peter Webb in Bet Angel on March 13th, 2010
I’m always on the lookout for something new, preferably complimentary, to what I already do. But the path to a new strategies always starts with low expectations and its often a bumpy path. I think it’s probably the same for people starting out. In fact the first part, low expectations, is probably essential.
I recently headed off again down the path of blind alleys but on this occasion the blind alley turned out to be a new path and the results are shown below. The reason for putting this up is to give you some encouragement to try something new, but also to be warn you about how you do it.
The top image is the ‘nice’ one. When trying out this strategy I went in low with, £10, then £20 stakes and you can see by the end of Feb it had produced £250 in profits. The second graph tells the ‘true’ story however and the fate that often befalls new strategies or starters in a market.
The second graph plots the day to day totals. You can see it got off to a good start so I raised stakes and immediately ran into trouble. In hindsight I should have kept stakes at the same level to see if it was luck that was producing the results or some real underlying reason. In short, I got ahead of myself. Week two was a mare as you can see and it forced my hand. I chopped and changed my original strategy, a typically stupid error. As I exited the week, I went back to square one and started again and the market responded by giving me a clean bill of health going forward. With that decided, I could again increase stakes gradually until I find the tolerable staking limit for this strategy. I knew all this before, but for some reason I got carried away when I got off to a good start. It was a useful reminder though, which is why I am posting it up for everybody to see.
The summary is: -
If you try something, give it time to work through. Second, don’t raise stakes too quickly if you get off to a good start, it could be luck. Third, while it may take some time, always make sure you increase your stakes, even slowly. This will allow you to eventually reach bigger numbers in a safe and controlled manner, without the emotional baggage that comes with it!
There is some value in that
Posted by Peter Webb in Bet Angel on September 6th, 2009
I’ve often used this phrase and others often use this phrase, mainly incorrectly, so I felt I should qualify what it means!
Simply backing or laying something ‘Because it is value’ just isn’t good enough. If we see something priced at 1.50 and we think is should be priced at 1.20 there is clearly defined value, 30% in fact. We could feel pretty confident about putting some decently money on that. While it may not win this time, doing it one hundred times would produce a decent return for us. But therein lies the problem, it’s not very common to see 30% edge in the market.
I can price a number of markets very very accurately. But the edge I find is often quite narrow, maybe a few percent. Therefore, to return money over time, I must base my stake on the chance of winning and the theoretical margin of my edge. To place a bet any other way is just lunacy as the prospect of ruin lurks just around the corner of a bad run. In short , it’s possible to be right but still lose money because your staking method is shot to bits.
Most people use the Kelly Criterion or something similar to work out what they should stake. You can read more on it at this link: -