Why Live Results Just Doesnt Mirror Back Testing

[theuktrader]

Hi Community

This will be my last post on the topic as don't want to labour the point as there has been good feedback.

In regards to the fact that from Point X to expiry the chances of a successful trade is constantly decreasing.

So as an example. Let say you have a strategy where for certain matches which meet a specific criteria that 65% of games which are 0-0 at 30 minutes then have a goal scored before the HT (if you lose the trade you lose 1 point and if you win the trade you win 1 point so it is a positive expectancy system).

The 65% applies for trading results taken from 30-45 minutes. However what you find is that generally from the stats the split of goals by time generally smooths over to be the same for each minute in that period of time. So for 500 trades at 65% there were 325 winning trades where a goal was scored and approximately the goals came virtually equally for every minute (30,31,32,33,34,35,36 and so forth). So within reason, 20 winning trades came on 32 minutes, 20 on 37 minutes, 20 on 42 minutes and so forth.

So naturally there is more chance at minute 30 of having a successful trades as opposed to minute 43 (so if you decided to open your trade at minute 43 and wait till expiry you would probably have a 25% success rate or lower).

However if being a trader means you always close your position then where would you close the trade. At minute 33, at minute 35, at minute 39. Would you close the trade at minute 39 because you know at minute 42-45 there is less chance of a goal coming than there was between minute 30-39. What if you closed the trade at odds of 1.05 when its like 45 minutes and just a minute or 2 of injury time left, does that mean that by closing it is a trade whereas if you allowed it to go down to 1.01 and expiry then its a bet and not a trade.

This is why I treat probability as a whole for the period meaning for me there is no point closing the trade before HT expiry because the data applies to 30-45 and I dont know when in that period of time the outcomes wanted will take place.

I just want to add the final contex. This applies to leaving till expiry because at the end of the day the reward to risk is 1:1. Obviously in a lay the draw system where you are laying the draw at the beginning of the match you wouldnt allow an open trade to go toward expiry since the liability would be 3-5 times the initial lay.

So maybe its best to contexualise when I am talking about leaving it to expiry its where its a positive expectancy system where the risk:reward and win rate provides a positive expectancy.

I hope I make sense.