Betfair trading strategies : Cut Your Losses?? (Mean Reversion)

Interested in learning to trade on Betfair. Check out this section for advice, knowledge and discussion on trading strategies.
Zenyatta
Posts: 1067
Joined: Thu Mar 11, 2010 4:17 pm

Tue Aug 17, 2010 5:40 am

It's fascinating to watch the price chart of a selection on the few occasions when I'd known in advance exactly what the starting SP should be (due to detailed info of a horse's form).

The market does move to the correct SP by the off-time, but doesn't get there in a linear fashion. For starters, the period from 10 minutes-5 minutes before the off has a high degree of randomness, the market splutters around and the price can sometimes move 5 ticks in the wrong direction. It's only in the final 5 minutes that the price really starts to rapidly 'home in' on the correct SP, and even then there can be temporary spikes or fluctuations of 2 or 3 ticks in the wrong direction.

Iron
Posts: 6793
Joined: Fri Dec 11, 2009 10:51 pm

Sat Aug 28, 2010 6:05 pm

Hi Zenyatta

With steamers and drifters, do you find that, due to market hype, the price ends up much lower or higher respectively than its true price?

Jeff
Zenyatta wrote:It's fascinating to watch the price chart of a selection on the few occasions when I'd known in advance exactly what the starting SP should be (due to detailed info of a horse's form).

PeterLe
Posts: 3350
Joined: Wed Apr 15, 2009 3:19 pm

Sun Aug 29, 2010 2:34 pm

Deleted..
Last edited by PeterLe on Mon Aug 06, 2012 12:41 pm, edited 1 time in total.

lesblakeman
Posts: 15
Joined: Wed Jun 22, 2011 4:02 pm

Mon Aug 06, 2012 12:36 pm

After a couple of near career ending losses in May I decided to go the "stop loss" route , lasted about an hour , the non linear movement of the markets just makes it unworkable on horse racing .

Iron
Posts: 6793
Joined: Fri Dec 11, 2009 10:51 pm

Mon Aug 06, 2012 10:19 pm

I've found this thread very interesting.

Has anyone else experimented with random trading, where you enter at random with a stop of x ticks and an offset of y ticks?

Jeff

dogform
Posts: 53
Joined: Fri Sep 11, 2009 12:27 pm

Mon Aug 27, 2012 4:07 pm

Reversion to the mean is a suicidal strategy to employ in a distinct horse rate market and anyone who thinks different is deluded.

Iron
Posts: 6793
Joined: Fri Dec 11, 2009 10:51 pm

Mon Aug 27, 2012 4:46 pm

What's your reasoning behind that belief?

Jeff
dogform wrote:Reversion to the mean is a suicidal strategy to employ in a distinct horse rate market and anyone who thinks different is deluded.

dogform
Posts: 53
Joined: Fri Sep 11, 2009 12:27 pm

Fri Aug 31, 2012 3:55 pm

Ferru123 wrote:What's your reasoning behind that belief?

Jeff
Reversion to the mean is generally applied to much longer time frames than the short life of a specific horse race market. How do you determine the mean of a distinct horse race market where the bulk of the activity is close to the off. A steamer is not likely to revert to the mean nor is a drifter. As I said before, suicidal policy and with no substance or foundation for horse race markets.

I made an exhaustive study on reversion to the mean for greyhound trainer statistics and trap statistics covering every BAGS race held in the UK for the past 18 months. The study did not yield any evidence that betting candidates due for mean reversion would be profitable.

Iron
Posts: 6793
Joined: Fri Dec 11, 2009 10:51 pm

Fri Aug 31, 2012 7:19 pm

dogform wrote:A steamer is not likely to revert to the mean nor is a drifter.
Thanks for your reply Dogform.

I don't know whether it's 'likely' to revert to the mean, but trends often break down and reverse.
dogform wrote:I made an exhaustive study on reversion to the mean for greyhound trainer statistics and trap statistics covering every BAGS race held in the UK for the past 18 months. The study did not yield any evidence that betting candidates due for mean reversion would be profitable.
I'm not sure I follow. Are you talking about situations where you bet on a steamer or a drifter reversing? If so, what were your parameters?

Also, I think what applies to greyhounds may not apply to horses, given that the liquidity in greyhound races is much lower and you therefore possibly have different players in the greyhound market.

Jeff

dogform
Posts: 53
Joined: Fri Sep 11, 2009 12:27 pm

Fri Aug 31, 2012 10:43 pm

Ferru123 wrote:....I'm not sure I follow. Are you talking about situations where you bet on a steamer or a drifter reversing? If so, what were your parameters?

Jeff,

The application of reversion to the mean that I analysed for greyhound racing was to calculate daily the trainers winning percentage for their last 100 runners and create a daily evolving trend line. I then compared this trend line to their overall winning percentage for the previous 6 months which was used as a baseline.

By comparing the deviation of the trend line to the baseline I then checked what would have been the P/L by backing/laying the trainers runners whose percentages were quite a way from the mean and would be due some type of reversion.

I did the same thing for the trap stats and in both cases there was no significant P/L. The reversion to the mean does take place but not in a predictable pattern that can form the basis of a system.

Regards
dog

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