I understand the theory.
On average, the true price lies somewhere between the spread. Yes, the current price may not be the true price, but over thousands of bets, for every time you're x% above the true price, you'll be x% below the true price, and it will even itself out.
So the principle is that, by offering to the market, you beat the spread and obtain long term backing and laying value (and thereby obtain long term trading profitability).
However, my previous experiences of it have been pretty bad.
I'd long since dismissed the approach, but the spreadsheet in the locked thread on this matter - viewtopic.php?f=2&t=159&start=20 - gave me pause for thought. Those results are very impressive (as are the ones in this thread).
Perhaps I had been too hasty. And perhaps I hadn't used a large enough sample previously, or didn't operate in a sufficiently mechanical way. So I created a simple spreadsheet today that does the following:
- £2 offers on both sides of the book.
- If an offer is taken, I make another offer on the same side of the book.
- If the price moves, repeat the process at the new price (without having more than one offer on either side of the book at any time).
- Green or red up 10 seconds before the off.
In theory, this should work great. Win and little, lose a little, secure small but significant long term edge.
However, using £2 stakes, I lost £7 in my first race and £5 in my second.
Maybe I was just extremely unlucky, maybe the market has changed, or maybe you need a faster internet connection and better computer than I have (I use 0.2 refreshes as my computer doesn't cope well with full stream). Or yes, maybe my approach was flawed.
However, with those kind of losses, which far exceed any losses in the spreadsheet, I'm not going to find out.
I hope the above doesn't come across as provocative. I know there are people here who swear by scalping, and I'd be genuinely interested in hearing people's opinions on my experiment.
Jeff
PS LeTiss - before you ask - the answer is 'No'.
