Trading at Random Question
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When I tried this I found the answer to be b).....sorry!!
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If you trade at random (or not), you will not only lose commission, you will also lose out due to the spread ie the gap between the back and lay price. In my opinion, there is no way round this, because any edge will already have been squeezed out by Betfair's software. If I'm wrong about this, could somebody please show why in mathematical terms? Perhaps Peter will take up this challenge!
Offer your bets to the market to benefit from the spread rather than paying it.oscarweazel wrote: ↑Sun Jun 03, 2018 12:49 amIf you trade at random (or not), you will not only lose commission, you will also lose out due to the spread ie the gap between the back and lay price. In my opinion, there is no way round this, because any edge will already have been squeezed out by Betfair's software. If I'm wrong about this, could somebody please show why in mathematical terms? Perhaps Peter will take up this challenge!
You will find the distribution of gains and losses is often unequal at certain points in the market. So trading at random at these points still ends up at break even. But if you pick a weak favourite and trade off the crossovers it can be pretty effective. But that's not random but is generally a straightforward position.
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And if your bets are taken the momentum of the market will usually be against you, when it's in your favour, and drifting, your bet will be left unmatched on the shelf. There are rarely unfilled price points within racing markets to take advantage of.Euler wrote: ↑Sun Jun 03, 2018 10:23 amOffer your bets to the market to benefit from the spread rather than paying it.oscarweazel wrote: ↑Sun Jun 03, 2018 12:49 amIf you trade at random (or not), you will not only lose commission, you will also lose out due to the spread ie the gap between the back and lay price. In my opinion, there is no way round this, because any edge will already have been squeezed out by Betfair's software. If I'm wrong about this, could somebody please show why in mathematical terms? Perhaps Peter will take up this challenge!
My advice would be to stop thinking entering at random is a break even starting point , it isn't.
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Are you referring to the bookmaking function?Euler wrote: ↑Sun Jun 03, 2018 10:23 amOffer your bets to the market to benefit from the spread rather than paying it.oscarweazel wrote: ↑Sun Jun 03, 2018 12:49 amIf you trade at random (or not), you will not only lose commission, you will also lose out due to the spread ie the gap between the back and lay price. In my opinion, there is no way round this, because any edge will already have been squeezed out by Betfair's software. If I'm wrong about this, could somebody please show why in mathematical terms? Perhaps Peter will take up this challenge!
- ruthlessimon
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What's your opinion on the following advice? Cos this geezer (not me btw) rocks a totally different opinion to yourself. A synergy here could be quite powerful though. I totally get why offers are a natural edge, but it's a double edged sword; & I think this paragraph succinctly explains why (in a swing scenario).
"At this point, putting an limit back @ 2.34 would not be a good move. You'd be at the back of the queue. Also, there is no sign the backs will weaken. At the point you put the order in (say £300), you would need £1500 to be traded into your price AND then for it to not trade any more, because then it'll tick through you. That's a very specific scenario, isn't it? You aren't just saying you need it to go down, you are saying you need it to trade £1500 at the offer and then go down. You want £1500 against you and no more! You'd need crystal balls for that. Remember also, the touch prices are a bit more reliable than the other areas. Pulling will very often occur as soon as the fakers move out of the way. As money trades into those two prices, it will often become very apparent, with a fair degree of certainty (60-70%) which side is going to lose out. Now is when you execute."
I'd need more context TBH, but fast-moving markets were you 'know' direction it would make sense to jump in. But as a rule I'll always offer because it gives you the change to get out at break even. You will gain 0.5 a tick on average and if you trade a large number of races, that's worth a fortune. The average price move on a favourite is zero, so that's why it's important. You flip the risk to whoever wants to take. I'm happy that people recommend that.