Spotting spoof money

The sport of kings.
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Derek27
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spreadbetting wrote:
Tue Jul 10, 2018 6:31 pm
Derek27 wrote:
Tue Jul 10, 2018 5:09 pm
JollyGreen wrote:
Tue Jul 10, 2018 2:58 pm
If I see money still coming then why offer a bigger price? Why not wait for the price to drop and then offer my money? Yes, it could reverse but that means I have either not read the market correctly or someone has placed a massive lay bet before me and the price has shot out. As a savvy player I am not just going to throw my money into the market, there will be plenty more chances.
Very interesting thread.

It took me quite a while to realise that if you're too keen to get your money on for fear of missing out, sure you get your money on every time, but you get a worse deal every time. If you're prepared to wait and look for a few more ticks, it's either a better deal or no deal.

It's easy to imagine a trader who always get's his money on and breaks even. Being more selective and going for the better price or nothing could make enough difference to turn his trading into profit.
I don't think JG was talking about entering a trade, Derek, more the fact that there's little point taking a price, or being generous, when the market is coming towards you.

When you open a trade it's always going to be a judgement call whether to take, or offer, odds and so much of that depends on what you expect to make from the move. If you think the market is going to move 8 ticks there's little point you offering odds and risking losing the trade for the sake of an extra tick especially when you've already decided the momentum is in the opposite direction. If you're just playing the noise to take a tick or two it's a different matter
I realise that but the principle is the same for layers and traders. If I was a layer and it seemed prudent to pause for a better lay price, it would be the same if I was opening a trade with a lay bet.

Of course it makes sense to 'take' if you feel the price will bounce away - I do that frequently with US ans AUS racing. But there have been many times lately where I've offered my money a good few ticks behind the spoofer and waited the the spoofer to withdraw, whereas when I was less experienced, in the same situation my money would be straight in front of the spoofer.
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Derek27
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ruthlessimon wrote:
Tue Jul 10, 2018 5:10 pm
JollyGreen wrote:
Tue Jul 10, 2018 9:53 am
I know that sounds simplistic but read on. So we can see the money coming for the favourite and it's slowly gathering momentum. They fancy this one and the money is coming. Suddenly, there is large amount queued and this strikes fear into some people. I take a simple view "if the market is supporting this horse, why would a savvy person go against the move?" The chances are they wouldn't!!
Nice to see ya again JG :)

Talking of simplicity, couldn't this be simplified to just time & price (i.e. avoiding spoof entirely - for say a newbie trader), who could then learn to incorporate volume in the future?

Below are two ideas, put forward by two traders, & I just wondered, 1. Which strategy would you recommend 2. Where would you see the problems in the following ideas? 3. If you recommended a strategy, what steps would you take to improve the strategy further (after all volume is completely omitted)

Strategy 1. A trader is looking to only trade markets priced at 2.xx. The trader finds that over a large sample size, the average race end is xx:xx. Said trader then takes the price of the fav at xx:xx, & sets two boundaries (these will be the trader's future entries) 2.xx + x ticks, & 2.xx - x ticks (let's assume x is 8 ticks - a decent "sustained" move in one direction). If one of those boundaries gets hit, he enters in that direction & holds to 00:00.

Strategy 2. A trader is only looking to trade markets price at 2.xx. The trader finds that over a large sample size, the average race end is xx:xx. The trader backs at xx:xx & holds to 00:00.
I can't speak for the jolly green giant (what a way to get kids to eat their vegetables!) but I'm sure there must be a lot of traders like me that are more focused on the here-and-now to determine price movements, rather than statistics, although it is an interesting approach.

(It took me a while to realise that xx:xx is mm:ss). :)
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ruthlessimon
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Derek27 wrote:
Tue Jul 10, 2018 9:47 pm
I'm sure there must be a lot of traders like me that are more focused on the here-and-now to determine price movements, rather than statistics, although it is an interesting approach.
Absolutely, & I completely agree.

However, my issue comes when a trader starts struggling with the discretionary "here & now" (to which I would label the researcher mentioned by Dave). They're quickly labeled as psychological failures ("what if" traders) - & I have huge problems with that. Especially - if the trader saying that has incredible amounts of statistical knowledge. It's such a massive confounding variable IMHO.

For example Korattt. He's been trying to trade discretionary for 4 yrs - I say, let's try to quantify some of those "truths" you've believed for the last 4 yrs. Does the MO chart slider really provide a support level? Let's be completely impartial & let excel be the judge. That could open his eyes, that could build a life skill, that could get him pro.

If Peter hasn't done any quantitative analysis on spoof money (i.e. WOM), I'll eat my hat!
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ShaunWhite
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ruthlessimon wrote:
Tue Jul 10, 2018 10:30 pm
He's been trying to trade discretionary for 4 yrs - I say, let's try to quantify some of those "truths" you've believed for the last 4 yrs. Let's be completely impartial & let excel be the judge.
This is where I have questions about your approach, doesn't the idea of quantifying 'truth' sail dangerously close to the magic indicator myth?

Rather than indicating profitable situations, might they just identify less risky situations? The places where you're less likely to need fancy footwork. Remember these guys can squeeze money out of almost any situation and really make hay on the easy stuff. Not 'easy' because it's always +10ticks, it's easy because it behaves more predictably both up and down, so you can stake bigger. Staking is something excel simulations struggle with, how do you simulate the ebb and flow as you take profit, reduce liability, scale in and scale out. It's a dance not an atm transaction.

Then there's the discretionary angle, the context, missing clashing races because they're weak, knowing a course can be spikey if it starts the day that way, what happened in the last minute, it's endless.

Surely they're no more than that, otherwise they'd be magic bullets? I won't deny thay're a good reference point, but they can be learned from experience as well as data I'm sure. I remember losing £50 more than I remember a big red number in cell ZZ48 when I ran strategy X.

In fact going back to topic, the large WoMs are a danger signal to the inexperienced but are an opportunity for the experienced. Is it spoof money? Is it real money? Things can go either way, far and fast! The outcome might be 60/40 and a paper profit, but some make hay while others get burnt.....because they don't have the experience to assess the very very fuzzy logic and act rapidly enough to exploit it.

Sorry that all sounds like an attack on your work, it's not meant to be. I'm just trying to find out how essential or useful it is to know, statistically, these key setups.

btw i'm going to avoid using the phrase 'the truth'. My in-laws are JWs and 'the truth' is what they bang on about. Being a hardcore atheist, that phrase makes the hair on the back of my neck bristle :x
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Derek27
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JollyGreen wrote:
Tue Jul 10, 2018 2:34 pm
I once witnessed a £150K back order placed at around 2.90 in a Cheltenham hurdle race (not the festival) and it was hit with approx £250K. That left £100K on the lay side and the price rocketed out. You could see the original backer desperately throwing money in to back the horse but there not enough money there and the race started. The horse was never sighted!!
I'm surprised the layer didn't drip-feed some of the money back to the backer; a few grand at 3.5, a few more at 4.5, he might even have taken him up to 20's and still kept £200K. :lol:
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JollyGreen
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Hi to all

Thank you to everyone who offered comments on this posts, they are all welcomed. Thank you to everyone who read the post but didn't comment, I understand and respect your position. Please never feel you should not post for fear of asking a stupid question. If you don't know the answer, the question is never stupid or trivial!

Let me add some more thoughts on this matter. I have no problem with using excel being used to analyse markets or even trade them. It simply doesn't suit me; trust me I have tried it. There are so many variables, here are a few.

The next race is delayed because the ambulance has broken down
Someone in the crowd has been taken ill so there is a delay
A horse drops his jockey and runs off to the next parish
The preceding race is cancelled due to unsafe ground
Low volume as another sporting event clashes with racing

The list is endless and this is going to impact on money flow which is the key to successful trading. I do appreciate an excel sheet can monitor the money flow and a threshold can be set for the start of trading but I prefer to see it with my own eyes. I would not wish to expand on this because it is not my area of expertise.

When all is said and done, Betfair is a very simple concept and it is driven by money only. Yes, you will get the spoofers but they're not going to impact on you too much if you start to spot them. You do not need to find all of the spoof money, rather you don't want to be impetuous and jumping in. The market is better than me, I am not going to put large sums into it just to try and fool others and perhaps pinch some profit. I also believe that very few people are going to risk large sums to make a small return. A mackerel to catch a sprat......I'm more of a sprat to catch a mackerel person. Let's face it, if you have large sums of money to throw around there are better ways to make a profit. I know the topic of illegal money and money laundering raises its ugly head but if you worry about every angle you will never get out of bed in the morning let alone get involved on Betfair!

For those who have met me you will know I prefer a simplistic and honest approach to trading.

K.I.S.S. Keep it Simple Stupid, there is no point trying to analyse every little foible or idiosyncrasy for fear of insanity. You will get caught by the occasional large order, you will get caught by a spoofer.... BUT, if you keep pretty much on the correct path they will even out over time. One day you will be backing and a massive lay will smash you, the next day you will be backing and a massive bet will propel you into profit. What's important is to accept it as part of trading, accept you were lucky or unlucky but understand you placed the order and accept responsibility. This is true in life, the victim personality will never accept responsibility for fear of getting it wrong, they would rather get instruction from someone else and then pass the blame to them when the proverbial hits the fan. The same thing applies when they are smashed by a counter order. They are bemoaning their luck and looking elsewhere for the error rather than accepting it, learning and pushing on.

I say to people "If it walks like a duck and quacks like a duck, it's a bloody duck!" I am not interested in specific breed, sex, age etc. If you think too hard every time, you will end up with paralysis by analysis. I will try and write a post about simple trading versus analysis and technical trading when I get time.

Thanks again

JG
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JollyGreen
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Derek27 wrote:
Tue Jul 10, 2018 5:09 pm


I realise that but the principle is the same for layers and traders. If I was a layer and it seemed prudent to pause for a better lay price, it would be the same if I was opening a trade with a lay bet.
Yes, that is the point I was trying to make but I didn't make it clear. In terms of large orders appearing we are trying to determine if they are real or not, i.e. will they alter the trend? So if you are playing with £5000 it doesn't make sense to put it into the market in the hope you will change it. As you correctly said, it is more prudent to wait for the lower price. So for a straight layer, they are not going to offer you 2.66 if they can offer <2.66. Likewise, a good trader will offer a lower price as they attempt to find the bottom...or as close as they can get!
Korattt
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“The next race is delayed because the ambulance has broken down
Someone in the crowd has been taken ill so there is a delay
A horse drops his jockey and runs off to the next parish
The preceding race is cancelled due to unsafe ground
Low volume as another sporting event clashes with racing”

think I attended that meeting,

anyway, back on topic, I think this is the spoof money in question as discussed earlier?

Master Sunrise.png
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JollyGreen
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Korattt wrote:
Wed Jul 11, 2018 10:35 am
“The next race is delayed because the ambulance has broken down
Someone in the crowd has been taken ill so there is a delay
A horse drops his jockey and runs off to the next parish
The preceding race is cancelled due to unsafe ground
Low volume as another sporting event clashes with racing”

think I attended that meeting,

anyway, back on topic, I think this is the spoof money in question as discussed earlier?


Master Sunrise.png
Without a doubt that is an unreal amount. I would not call it a true spoof because it's too far away from the current price and whilst the market may have reversed away from it the amounts matched seem pretty low which suggests the market is either weak or is yet to hit peak flow. How long before the start was the screenshot taken?

My opinion on that horse is this. The money traded below the 2.60 is what I refer to as overshoot, usually caused by people not reading the market correctly and chasing it down below what I would call the bottom of the price at that moment in time. Obviously more money could come, the £60K could be pulled and the price drops much lower but I am only speculating. Based on what I see, I would say 2.60 was the true low and it was brief.

If I was playing that way then my best chance would be this. I would need to know a bit about the horse (I think someone said ATR suggested it would not like the ground?) I would see the low amounts trading, place my lumpy £60K at 2.60 and simultaneously lump £xxxx at 2.62 to create the impression of a reversal. The £60K gives me a buffer so if the market disagrees I should have a chance to get out with the shirt still on my back. WARNING!!! If someone disagrees, correctly or incorrectly and takes my £60K I am in a world of hurt and will not get my underpants back let alone my shirt

Hope that makes sense?

JG
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ShaunWhite
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I'm loving your posts JG. An interesting new topic, discussed in simple terms, not over complicated but not lacking in depth either. You're clearly a natural educator.

KiSS appeals because it suits my std sized IQ and also because I've always thought/guessed/hoped that ultimately the fundamental mechanics of the market arn't rocket science.

Best of all, they're a good read and make me smile. Thanks for sharing.
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ruthlessimon
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ShaunWhite wrote:
Wed Jul 11, 2018 4:30 am
This is where I have questions about your approach, doesn't the idea of quantifying 'truth' sail dangerously close to the magic indicator myth?
I think it's a massively important question. & yes I've thought that many a time; but think it depends how the data is used (this is where BA education lacks imo). Also, maybe I look up to Peter too much, but why would he go to such an effort to quantify everything - For the sake of it? Sacrificing family time etc I'm convinced there was a reason. Which he then used to teach JG (I assume) :)
ShaunWhite wrote:
Wed Jul 11, 2018 4:30 am
Rather than indicating profitable situations, might they just identify less risky situations? The places where you're less likely to need fancy footwork. Remember these guys can squeeze money out of almost any situation and really make hay on the easy stuff. Not 'easy' because it's always +10ticks, it's easy because it behaves more predictably both up and down, so you can stake bigger.
Perhaps Peter would setup a spreadsheet to work out when & which courses are the least volatile, with the highest volume. That's not a trade strategy, but does give me a rough indication of the best markets to scalp.
ShaunWhite wrote:
Wed Jul 11, 2018 4:30 am
Then there's the discretionary angle, the context, missing clashing races because they're weak, knowing a course can be spikey if it starts the day that way, what happened in the last minute, it's endless.
This is something that's bugged me certainly. "There's always another variable". But I could also level that argument at a discretionary trader. They might still miss the context - & it's permanently lost.
ShaunWhite wrote:
Wed Jul 11, 2018 4:30 am
In fact going back to topic, the large WoMs are a danger signal to the inexperienced but are an opportunity for the experienced. Is it spoof money? Is it real money? Things can go either way, far and fast! The outcome might be 60/40 and a paper profit, but some make hay while others get burnt.....because they don't have the experience to assess the very very fuzzy logic and act rapidly enough to exploit it.
But what about saying - "Which markets have the biggest variability in WOM (i.e. 90% regularly pops up)" "This is where I expect spoof to occur" Perhaps that's how Peter uses Excel
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ruthlessimon
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ShaunWhite wrote:
Wed Jul 11, 2018 4:30 am
This is where I have questions about your approach, doesn't the idea of quantifying 'truth' sail dangerously close to the magic indicator myth?
Image

In fact a really interesting read (but more related to financials)

https://adamhgrimes.com/fibonacci-thinking-deeper/
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ShaunWhite
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ruthlessimon wrote:
Wed Jul 11, 2018 2:23 pm
But what about saying - "Which markets have the biggest variability in WOM (i.e. 90% regularly pops up)" "This is where I expect spoof to occur" Perhaps that's how Peter uses Excel
Why would you need to do that? I can see it as and when the situation arises. And is high variability in WoM necessarily an indiction that there was spoofing going on? How would you even parameterise that high variablity anyway, spoofing is a hit and run tactic, so a high variation from the other 9 minutes or a high variablity in general, or a high variablity from the last race, or the same type of race yesterday.

I think I know how to get some measure it but I struggled getting the depth of info I need using the tools I've got, so I've shelved it because I started to realise I could learn more from the screentime than the potentially misleading excel time.

I'm always happy to be corrected but I think identifying spoof money is a subtle business not particularly suited to excel, hence the need for JGs OP in the first place? I would think they make their own mental lists of how/when/where it's more likely.....from experience. It's more subjective than objective.

Last bit...If spoofing was in anyway predictable, I'd say the spoofer wasn't doing their job right and it would just a matter of time before the smart guys cottoned on and start smashing them out of the park. I always try to step away from the numbers and try to understand how the market participants tick, I want to understand their MOs and not just look at the evidence at the crime scene.
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ruthlessimon
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ShaunWhite wrote:
Wed Jul 11, 2018 3:10 pm
I'm always happy to be corrected but I think identifying spoof money is a subtle business not particularly suited to excel, hence the need for JGs OP in the first place? I would think they make their own mental lists of how/when/where it's more likely.....from experience. It's more subjective than objective.
This is why r.e. reading spoof: -
JollyGreen wrote:
Tue Jul 10, 2018 9:53 am
you will have a much better chance of profiting if you have a general idea of what the market is doing.
Peter & JG do smash them - when they have an idea what the market should be doing

Let's hypothetically imagine I've developed a model that can predict a move with 80% accuracy on certain markets. I enter my trade. If I then spot a spoof close to my entry, I have the choice to hammer him, because my model suggests this player is wrong. Why would I go against my own prediction because a spoofer is scaring me? that's an IQ problem if I forgo my own forecast (not a psychological one)

Perhaps the spoofer also has a very similar model, & he's playing against his own system.
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ShaunWhite
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ruthlessimon wrote:
Wed Jul 11, 2018 3:22 pm
This is why...
JollyGreen wrote:
Tue Jul 10, 2018 9:53 am
you will have a much better chance of profiting if you have a general idea of what the market is doing.
General?
ruthlessimon wrote:
Wed Jul 11, 2018 3:22 pm
Why would I go against my own prediction because a spoofer is scaring me?
Your prediction might put you in the right game, but your observations/experience/discretion will tell you that the pitch is a bit cut up today, and the ball could go anywhere.
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