Money Management

Learn sports betting strategies and discuss key factors to consider when placing a bet.
Zenyatta
Posts: 1143
Joined: Thu Mar 11, 2010 4:17 pm

Yesterday, I analyzed the form, and didn't place back bets on any of the horses that moved out :)
Photon
Posts: 206
Joined: Mon Nov 29, 2010 10:14 pm

Having stop losses and precise placement is part of risk management strategy so on that count this discussions are taking place on the wrong thread but they are interesting nonetheless. My view would that they should used as a last resort and therefore should be set at far enough distance for it not be invoked frequently and if you decide on a safe distance it should be used consistently or not at all.

My view on the original question about fixed % of bank to be used is a wrong approach as the size of the stake, although needs to be restricted by the size of the bank, should be determined more from the risk and potential return than bank. Soros wouldn't have risked billions and made billions if he had stuck % of bank as a strategy when betting against Sterling. If the possibility of successful outcome is more than certain then you should do all you could to increase your bank rather than by constrained by it.

But for a newbie % of bank should increase with experience and success you have experienced but should be constraining factor.
freddy
Posts: 1132
Joined: Sun Aug 01, 2010 8:22 pm

I think its fairly obvious what Zenyatta's strategy is from his example and his statement "I simply kept putting more and more and more cash on to back as the price kept moving out and out. I think I ended up with an exposure of over $1000 on it before finally getting the big price reversal"

I repeat, waiting for a reversal whilst becoming more and more exposed is foolhardy.

It might never come and I quoted some races from yesterday where it simply didn't.
Yep i agree and it's not the method i would use either.

but as we don't know his entry points we can not possibly ascertain the outcome of his trades.

if he is adding to losing trades then he would of cause not need a full retracement either, depending how aggressive he is he many only need a few ticks to be in profit.

those trades you mentioned, yes he would have lost money if on the wrong side, but it may have only been a few ticks if he entered at a good time near the end of the trend.
Iron
Posts: 6793
Joined: Fri Dec 11, 2009 10:51 pm

Hi James

I agree.

If the market were perfectly rational and normally distributed (in terms of trend lengths), then Zenyatta's approach would work fine (even if it did give you some big drawdowns). The problem is that the market frequently trends strongly, as was illustrated by the how many big movers you identified yesterday out of the day's 30 races.

Peter - It intrigues me that, from what I can gather, you'll try to scratch your trade if it moves a tick against your position, but other than that you won't get rid of a trade that's moved against you. Have I understood your position correctly? If so, am I right in thinking that you generally focus on fairly quiet markets, where you're unlikely to lose out to a big move against your position?

Jeff
James1st wrote: Zenyatta, judging from his prior posts, appears to be a "normal" trader who enters trades on both sides of the book and as such is open to extreme losses yet decries the use of a stop loss.
freddy
Posts: 1132
Joined: Sun Aug 01, 2010 8:22 pm

Jeff but maybe that is part of his strategy to find opportunities like that , it pays to be open minded in this game i think.

there are markets that you know with an extremely high rate of probability will not go beyond a certain point.
adding to losing trades would work going by my stats in some circumstances, althoe it goes against all the textbooks in the land and is not something i would try myself .
Iron
Posts: 6793
Joined: Fri Dec 11, 2009 10:51 pm

freddy wrote:Jeff but maybe that is part of his strategy to find opportunities like that , it pays to be open minded in this game i think.
It may be that Zenyatta's strategy has a long-term edge. Perhaps he gets enough turns through the market to compensate him for the time when the market moves against him and off into the blue yonder. :) But I'm very sceptical, and I would urge any newbies reading this thread not to experiment with the 'cut your profits and let your losses run' strategy! :lol:

Jeff
freddy
Posts: 1132
Joined: Sun Aug 01, 2010 8:22 pm

:lol: Yes i agree it is an unconventional approach,

but it's also worth remembering that the theory of cutting your losses short and letting your wins grow does not have to apply to each individual trade but more so over a day / month or year.

for example 100 1 tick scalps over 100 markets followed by a big 15 tick loss is still a winning strategy, allthoe it goes against the above principle.

If the strike rate is good so are the profits :D
PeterLe
Posts: 3715
Joined: Wed Apr 15, 2009 3:19 pm

Ferru123 wrote:
Peter - It intrigues me that, from what I can gather, you'll try to scratch your trade if it moves a tick against your position, but other than that you won't get rid of a trade that's moved against you. Have I understood your position correctly? If so, am I right in thinking that you generally focus on fairly quiet markets, where you're unlikely to lose out to a big move against your position?
Yes that's generally correct. A scratch trade isn't a loss, so if it looks like going against me I will scratch.
The way it was explained to me many years ago is that trading strategies are like golf clubs, you shouldn't use the same club for every shot you take. Very simplistic; but true nonetheless.
You have the weigh up the information in front of you and choose the best for that individual market.
I dont know how many scratch trades the full time traders do, but given that the average return on turnover is about 0.17% (?)), then I suspect a scratch trade is a common club in the bag.
Zenyatta
Posts: 1143
Joined: Thu Mar 11, 2010 4:17 pm

Got my first $100 green-up on a single market. I had unloaded another big back bet on 'Ebn Arab' in the feature at New Market. The market tried to pull its usual bullshit on me... the price immediately started moving out and out... but this time I was waiting mate.

I just kept pouring the cash on and on and on and on - with my recent 34k lottery win I can do this stuff now :D

I took the heads of those who opposed me right off.

Back subtotal: -1,203.49
Lay subtotal: 1,320.11
Market subtotal: 116.62
Commission @ 4.9%: 5.71
Net Market Total: 110.91

Most satisfying :D
mbeebee
Posts: 12
Joined: Tue Feb 07, 2012 10:40 am

fantastic post. you've just let us all know how to win at trading by bludgeoning the price to suit ... welldone Z.
obviously we need plenty of folding gear to trouser the goods.

beebs ;)
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LeTiss
Posts: 5386
Joined: Fri May 08, 2009 6:04 pm

Nice one Zenyatta, but that just shows the possible mentality of the so called 'Mad Bomber'. It's somebody with a gambling instinct and money to burn, or money to influence markets
Alpha322
Posts: 843
Joined: Fri Oct 30, 2009 4:45 pm

Photon wrote: My view on the original question about fixed % of bank to be used is a wrong approach as the size of the stake, although needs to be restricted by the size of the bank, should be determined more from the risk and potential return than bank. Soros wouldn't have risked billions and made billions if he had stuck % of bank as a strategy when betting against Sterling. If the possibility of successful outcome is more than certain then you should do all you could to increase your bank rather than by constrained by it.

But for a newbie % of bank should increase with experience and success you have experienced but should be constraining factor.
With the way how BF API behaves nowadays you have to use constraints. Size of risk doesnt worry me at all it is the API Crashing and it really does mess arround with your confidence
giulio2010
Posts: 962
Joined: Sun Sep 12, 2010 9:11 am

Zenyatta wrote:The market tried to pull its usual bullshit on me... the price immediately started moving out and out
Well done for your winning..
The fascinating thing about your post is that many times I've heard the same thing here and out of this forum and unfortunaly there is not a good explanation about this behaviour ... As soon you put the money in the market, the market goes against your money...repeated endlessly even on italian forums...More fascinating is the fact that the only people who are capable of avoiding this behaviour are paying heavy premium charges.(including my mentor)..Isn't that something to really think about........As for the money management that is the easist part if the market won't always go against your money.. :D
freddy
Posts: 1132
Joined: Sun Aug 01, 2010 8:22 pm

Humans have a habit of seeing patterns where there are none,

some trades go against you and some for you,
but you remember the bad ones more.

if you record the stats even trading at random breaks even, so it is all in the mind ;)
steven1976
Posts: 1744
Joined: Tue Jan 19, 2010 6:28 am

Well done Zenyatta, be cautious though as Ive seen banks that dwarf your winnings. Make sure you have an exit plan or it could get expensive if you get it wrong.
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