Posts Tagged tactics
Losers needed!
Posted by Peter Webb in Bet Angel, News on January 6th, 2012
Over the years I’ve studied the markets and a number of strategies, but all of these have been focused on winning.
Late last year I turned my attention to why people lose, the psychology behind that, but also what fundamental flaws they have with their approaches in the market.
If you mess around at random you should, over long periods, break even less the spread or commission that you pay to the service provider. However, when I look at a lot of people that lose money, they seem to constantly exceed that.
So if you have an approach, preferably a systematic approach, that constantly loses money. I’m quite interested in hearing about it. Football is a nice sport for this as it contains only a few variables and can be pigeon holed into something simple. Back before the off, lay off if this happens, sort of thing. You don’t need to go public if you don’t want to, or if you want to suggest something I am sure people wont attribute that to yourself. But good suggestions are invited, however sourced. I’ve seen some real bum systems over the years so I imagine there must be some decent suggestions out there.
I’ve put a thread on the forum, which is a little off at a tangent at the moment. But I’m happy to look at any suggestions or approaches. I’m interested in not only what you did but why. I can’t promise to respond or comment on anything immediately, just trying to see some commonalities across losing approaches. The idea is to identify the most common errors and come up with some useful ways of avoiding them!
Satisfying chaos
Posted by Peter Webb in Betdaq, Betfair, Horse Racing on December 27th, 2011
OK, yesterday didn’t seem that chaotic in the end, just a bit frustrating. I had to wait ages to find races that really set themselves up nicely, but eventually I did and they were OK. But it was a little dull overall.
Kauto Star lit up the day when I took a few races off to watch the King George VI produce a bit of history. What a great horse we have been treated to and it looks like we could be seeing an interesting Cheltenham gold cup now as well. Lets hope we get a big field and a competitive race.
Not my best result of the day, but a decent result came out of this market on Betdaq. I’ve been doing more work on Betdaq recently and will publish more information on the blog. Market conditions are improving all the time and I recommend using both exchanges where possible and for your own benefit and needs but also to increase competitiveness in the exchange market. If we have people fighting over our business maybe we can get a fairer deal. But obviously for me every £100 on Betdaq is worth the equivalent of £250 on Betfair, so it’s really worth me pushing hard for a result and sacrificing time on Betfair. As my activity is net accretive to the exchange I am also creating opportunities for others. As I get better at managing my risk I am probably creating some value for others. Today I had to exit a position that I made a mess off, I was still in profit but wanted to dump it and start again. I offered it many ticks higher on Betdaq than the best available price on Betfair. Any body active on both would have seen this and could get value from it or arbed it. The opportunity is there if you look, quite a few hundred quid as well!
This week looks pretty reasonble with the holiday cards increasing the scope and capacity of the racing. I reckon it should be a good week.
Back to open
Posted by Peter Webb in Bet Angel, Betfair, Horse Racing on December 20th, 2011
It looks like we are going to have some fun and games in the market today. I’d recommend adopting a ‘back to open’ trading policy!
For more information read up on this thread: -
http://www.betangel.com/forum/viewtopic.php?f=5&t=4934&start=240
Give your football 150% this weekend
Posted by Peter Webb in Football / Soccer on December 17th, 2011
I love those throw away phrases where people say they are going to give it 150%. Of course you can only give it 100%, or can you? Not when trading.
In a betting market the market is framed at 100%. A football team can only win, lose or draw a match. There is a 100% chance of that happening. But when trading, you are trading how volatile those odds will be and that is always over 100%, whatever sport you trade. I cottoned onto this fact way back when I first started looking at stats and sport and quickly realised the significance when exchanges came along. But this fools a lot of people.
If you bet on a football match for example, over the long term the market is so efficient you will end up +/- nothing less commission (or other charges). But when you trade, depending on what you are doing, you are predicting an envelope of volatility. In football there are several match types that win whatever the underlying basic strategy, and these occur with quite regular frequency.
However, this ‘over 100%’ often fools people into thinking that they have stumbled across some great system. A lot of matches will end in profit simply because of this characteristic but, of course, you can only profit if you predict what is likely to happen than just because of this effect. It creates a high strike rate but that alone doesn’t create a profit.
So when you look at market when trading, you know you should, by default; look at giving it more than 100%!
Lay the draw – automatically
Posted by Peter Webb in Bet Angel, Football / Soccer on December 3rd, 2011
Last week we backed the draw using the new automation feature in Bet Angel, this week we lay it.
Whether you use the new feature to implement something or test an idea, it’s a powerful tool to do either. Based on immediate feedback we have expanded the number of conditions you can apply to your automation which expand your capability further. Bear in mind that using the practice mode you can play around without risking any money and by using the P&L export function in the automation, you can export your results to a file long after the market has closed. This will allow you to see how you did on the day when you return to your desk.
We plan to introduce even more elements to the automation, so please keep your version up to date with the very latest beta. Next release is on Monday.
Here is a video explaining how we laid the draw and greened out after a goal, using automation. I’ll export and post the automation file that did this on the forum.
http://www.betangel.tv/video/using-bet-angel/automation/220-automatically-lay-the-draw
Be careful laying the draw in certain Italian matches!
Bombs away
Posted by Peter Webb in Horse Racing on November 14th, 2011
Every now and again in the racing market an individual arrives that doesn’t make much sense. From a trading perspective at least!
The come into the market and back a selection for a large amount of money, then back again and again and again! I’m not sure the oft quoted description of ‘mad bomber’ is accurate, maybe there is a better description. But what is certain is the impact they have on the market. You could view this as a negative, but if you know the way they work then it’s a big positive.
If somebody is backing in large amounts repeatedly then you should seek a speculative open order on the back side first. If you are on another selection then you need to lay first. It could also be possible to catch a bounce when the price gets backed in heavily, but you never know how aggressive this individual is going to be, so I prefer catching the top.
Why they are doing it is another discussion altogether!
Important Information
Posted by Peter Webb in Bet Angel on May 12th, 2011
Well day 3/6 on jinx week has passed without catastrophe. Yesterday wasn’t a great day by any means and I really fouled up on one race, but I’m still moving ahead on the week and hope for a better day today.
I’m always experimenting and there is no better way of doing that than directly in the market itself. I will always recommend this, as it’s the best way to really know what is really happening and how your actions shape the market. That’s important. You can back test and practice as much as you like but I can assure you actually doing it will always be different for one reason or another. This is why I recommend you get your hands dirty as quickly as you can.
I recently looked at a new strategy, gathered some data, tested it and then wrote a spreadsheet to put it to use. Spreadsheets are fantastic tools for trying out things with little effort. The end results can either confirm, confound or point you in a new direction. You can put some simple commands in and let Bet Angel do the rest throughout the day (or night) automatically. Some of the best ideas and understanding I have had, come from doing this. I was sure my new strategy would be net positive with a bit of tweaking. So I unleashed it on the market and promptly did my nuts, though my nuts were done in a very controlled manner. You may think that’s bad news, but for each negative on the exchange you will always find a positive.
I was a little perplexed, but not surprised, as it’s tricky to nail something on the first attempt. I carefully re-examined the data and checked my assumptions, they were OK. To eliminate confirmation bias, I handed the data to a third party and asked them to check it without telling them what they were looking for, that was OK. So, I had to dig around to learn what was different; eventually I found an answer.
In the data, I was measuring the strategy from a certain time forward; this time was variable. In the market I was using a fixed time. I had to do this as I wanted to carry on my ordinary activity while the spreadsheet pursued the new idea. It took a while to understand but the conclusion was inevitable, the time between the two fixed points contained important, predictive, information about the future of the market. This is something I hadn’t noticed before or had been quick to discount.
So, while one path is blocked, while heading down it I have noticed a gap in hedge I hadn’t spotted before. This leads to a new path and one I shall now enjoy exploring instead!
Gambling millions
Posted by Peter Webb in Bet Angel on April 24th, 2011
Give me five minutes with somebody and I can teach you how to put through enormous sums through a market at relatively little risk, you wont make or lose much, but you will be able to say that you gambled millions that day, an impressive feat; or is it?
I have often been misquoted, especially when it comes to numbers. But one thing that is fairly certain in the modern betting age, is that racking up bets in the millions is actually quite an achievable feat, even for a novice. Sometimes this has been put up as a negative, that people are using exchanges for ‘serious’ activity. But the reality couldn’t be more stark, lets have a look at the real deal behind the numbers.
Lots of products exist out there now for putting bets on while you are busy doing something else. We have two very useful tools in Bet Angel, Guardian, the multi market, auto switching tool and Excel spreadsheet integration. Using these two tools you can set up Bet Angel to places bets in your absense and it will happily chug away to your exacting criteria all day and night.
One of the huge draws to betting exchanges is the small overound on the book. In the bad old days bookmakers could print money by maintaining a super high over round. This ensured even given a bad run that they would end ahead. On exchanges the book is very very close to break even and with each year that passes it gets even closer. The hurdle to profitability is actually very small now. To jump that hurdle and make it worth while you need to do things.
First, you need an edge, even a very small one will do nowadays. Your edge could be timing, selection based, system based, logic, psychology; there are many. For example, a strong winning run in a sports events leads gamblers to often assume that the chance of something happening is more likely. Value is often created at this exact point for the opposing reason. Your edge can be quite small now and still be profitable thanks to exchanges. Once you have found your edge you need to exploit it with money, but the contradiction on exchanges is that while the hurdle is small, the market is very efficient and therefore any edge is also very, very small.
So the answer is to put lots of money through the markets to magnify any edge you have. Tomorrow, a public holiday in the UK, we have ten race meetings and total over 60 horse races. If you put through a £100 bet on each race you would place in total £6000 in just one day! Of course you only need a tiny bank to do this as each race starts and finishes quickly (excluding races that clash). Increase this amount to £1000 and you would put through £60k in one day. Is this realistic?
This is where betting on the volatility of odds really comes into its own. If you don’t want to risk £1000 in one shot you can break it up into chunks of say £100 or ten lots to reach your £1000 in bets. If we took the low assumption of just 10,000 races a year on average, your £1000 per race would scale up to the astonishing sum of £10m a year in gambles. Even a tiny, tiny edge on £10m can make things a worthwhile endeavour, all this with a tiny bank. On the flip side though, I should point out that if you don’t have an edge then your bank will disappear in double quick time as that negative edge multiples on the downside. When people talk about an edge, the image that springs to my mind is a cliff edge. To make money in the long term in any market you need to know where the edge is without falling off it!
But, in summary, even using small amounts you can effectively leverage that into what seems fairly astonishing sums just by re-using it as often as you can. This allows you to earn good money even with a tiny edge.
Finding an edge can be rewarding but carries risks!
Accidents and evolution (Part three)
Posted by Peter Webb in Bet Angel on February 24th, 2011
Never one for rhetoric; I presented a similar case, to those I have described in the prior posts, at a talk I did last year. Using a similar model we followed how that can evolve from a base set of criteria and environments to something more complex. The following two snap shots are from a control where we work at random and an evolved model a few generations on.
Here we are using £2 at random
Here we use an evolved model
I reckon I could replicate the performance of the two at an pre-determind date. But some of the performance will always be reliant on prevailing market conditions, but it’s the gap in performance that is the most interesting. The second benefits from picking the ‘right’ market, direction and exit models. It was only by studying why one performed better than the other that I was able to fully understand the reason and why that was important. You can then use than to hone other strategies.
Of course there an infinite amount of variables, so you need to point it in roughly the right direction. If you don’t know the direction, then do a binary chop to get there quicker. You also have the issue of course that the market can and will change. We recently saw the introduction of cross matching across many sports and that has changed the ‘environment’ to the point where I am sure some strategies have started to fail. This in turn will alter the behaviour of those people who are trying to avoid becoming dinosaurs. Sometimes however accidents in evolution produce strange results. On more than one occasion I’ve made an error on a spreadsheet and it has failed to do something I wanted. That in turn though created some unusual payoffs which lead me down paths I hadn’t considered exploring. Just another path on the road of evolution.
So while using a genetic algorithm is a useful trick, evolving doesn’t stop, it continues ad infinitum. If you stop evolving you may appear in the betting exchange equivalent of the natural history museum in a few years time.
Accidents and evolution (Part two)
Posted by Peter Webb in Bet Angel on February 23rd, 2011
So how did my view on evolution, natural selection and Darwin translate into market strategy?
There are many ways to apply it, but first you need to start. Your first strategy is to have no strategy, just poke around at random. This gives you a control sample to work with, a base metric from which you can build your activity. You should regularly revisit your control to ensure the base you are working from is still the same as when you started.
Next you need to decide the environmental factors. In the case of the market, when do you open a position, when do you close and what do you use to judge that? Could it be the market type, the price, the time? You could have a number of factors that tell you if a market is ‘right’ or is adequate for your participation, these define the environment in which you will work.
Next you need to decide exactly what your entry and exit points are. Start simple and build out from there. It will be fairly obvious, fairly quickly where things are not working and you can ‘kill’ off these experiments. After each life cycle of experiments carry forward the successful ones and add in some new variations for the next generation. It’s surprising how quickly you ended up with a much better understanding and a much better strategy. It’s not just the entry and exit that are variables the environment is also, don’t forget that.
It would be nice to say ‘That’s it’s’ but that is rarely the case. You have to remember that the market itself evolves and people in the market occupy certain niches. You need to find a niche but also compete with people who may already be present in that niche. Your activity in the market will also shape the environment, so that in itself produces a response from the environment. One failure of market participants is to fail to evole a strategy, every strategy has its moment but many people find, often by accident, something that works; from that point it starts slipping away. The general reason is that your activity has probably forced others to evole and so the whole things rolls on again but also a lot of participant never work out why what they did works. I am always restless for understanding.
More reading: -
Accidents and evolution (Part one)
Posted by Peter Webb in Bet Angel on February 22nd, 2011
Some time ago, when I was young, I was accosted by somebody on the streets of Guildford. He was trying to challenge my view of the world and get me to sign up to their cult or something. He followed me down the street and asked me if I really believed the world, everything we see, was created by accident. Without hesitation I replied, YES!
When I was young I had asked myself the same question. So I went to the library and started to read up on the theory of evolution to try and understand if there was some simple scientific logic at how you could arrive at something so complex from something so simple. I found my answers and wrote some simple code to see them in action. The code basically started with something white and introduced some Darwinian variables such as mutation and predation and I studied how it turned from white to black over several generations. I change the environment to test how that affected the evolution.
To this day I use these principles when working through a system, process or problem. Evolution does, eventually, provide a solution even if you don’t have a clue when you start out. Have a look at what you are doing and see if these principles can apply to what you are trying to achieve. People often talk about neural nets in trying to find an edge in the markets, but I have found a bit of Darwin a much more viable and logical solution.
Good start to Tennis season
Posted by Peter Webb in Tennis on January 6th, 2011
In preparation for the Aussie open Tennis later this month I have been warming up on the Qatar open this week.
Best of three tournaments mean that the swings you can get can be very large and quick. If a heavy odds on favourite slips up or stutters, the response in the market will often be significant.
One of my favourite tactics, that I detailed here, is to lay a very short priced favourite in the hope that they slip up and the price starts to move out. This happened twice yesterday when very short odds on Federer and Nadal caused their price to jump out in response to some lacklustre displays. Nadal imploded at one point to lose a set 6-0, the first time in a couple of years. At least he has a fever to blame.
Of course laying at short odds willy nilly will not produce a profit in the long term. So I use Tennis trader, before the match has started, to work out what score will cause the odds to move and I nip in ahead of this potential. This allows me to maximise the upside while minimising the potential for loss. If it looks like it will not come off, I simply scratch the position or take a small loss. Because the odds are so short you can quite easily scratch when money buyers come in at very short odds to snap up ‘value’.
It’s been a good start, lets hope it continues.
