Loss Recovery Systems

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Morbius
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Firstly I would just like to say a big hello to all the people on the forum as this is my first post but I have been a lurker for a few years and clearly there are some very smart people around here who I hope to learn from.

So here I go then with something that has been troubling me for a while and this is to do with Loss Recovery Systems. Now before anyone sighs and raises their eyebrows at my stupidity/naivety (delete as appropriate) :D it does very much seem to even a struggling trader like me that these systems are very seductive in their lure and are nothing more than Martingales in disguise (however intricate they sometimes may be).

However there is something that is gnawing on my brain that my limited understanding cannot get my head around, hence me asking for help. Do they or do they not stand a better chance of working in horseracing markets simply because many backers are potential future layers and vice versa meaning that if you were to initially back for example and the price moved against you, a second larger entry at a better price isn't the same as a martingale on say roulette where we are essentially dealing with independent events because in horseracing there is more chance of the price retracing because of numerous factors that wouldn't apply to a game like roulette.

Or am I missing something important here regarding the dynamics of horseracing markets and that prices may steam/drift far more powerfully than I originally imagined and therefore it is closer to a martingale strategy than what seems apparent. I hope all that sounded sensible and I didn't waffle too much and lost the thread. I know what's in my head but just hope I have phrased it correctly. I really hope Peter could comment although I know this has been discussed before on this forum as I have read the thread but I don't think my question was answered (or maybe it was and I missed it). Anyway, a big thanks in advance to anyone who could help me see further than I already am.
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Euler
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Reading through this you seem to be not talking about loss recovery systems as such, but recovering a losing trade in a time-limited market?
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Kai
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I think OP is talking about "averaging" and not loss recovery systems. Welcome to the forum btw :)
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Euler
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Kai wrote:
Mon Oct 12, 2020 9:05 pm
I think OP is talking about "averaging" and not loss recovery systems. Welcome to the forum btw :)
Y, that's how I sort of saw it but wanted to frame it in a way the first post indicated.
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Derek27
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Morbius wrote:
Mon Oct 12, 2020 7:39 pm
Firstly I would just like to say a big hello to all the people on the forum as this is my first post but I have been a lurker for a few years and clearly there are some very smart people around here who I hope to learn from.

So here I go then with something that has been troubling me for a while and this is to do with Loss Recovery Systems. Now before anyone sighs and raises their eyebrows at my stupidity/naivety (delete as appropriate) :D it does very much seem to even a struggling trader like me that these systems are very seductive in their lure and are nothing more than Martingales in disguise (however intricate they sometimes may be).

However there is something that is gnawing on my brain that my limited understanding cannot get my head around, hence me asking for help. Do they or do they not stand a better chance of working in horseracing markets simply because many backers are potential future layers and vice versa meaning that if you were to initially back for example and the price moved against you, a second larger entry at a better price isn't the same as a martingale on say roulette where we are essentially dealing with independent events because in horseracing there is more chance of the price retracing because of numerous factors that wouldn't apply to a game like roulette.

Or am I missing something important here regarding the dynamics of horseracing markets and that prices may steam/drift far more powerfully than I originally imagined and therefore it is closer to a martingale strategy than what seems apparent. I hope all that sounded sensible and I didn't waffle too much and lost the thread. I know what's in my head but just hope I have phrased it correctly. I really hope Peter could comment although I know this has been discussed before on this forum as I have read the thread but I don't think my question was answered (or maybe it was and I missed it). Anyway, a big thanks in advance to anyone who could help me see further than I already am.
Welcome to the forum Morbius. When I first started trading I remember a market going 15+ ticks against me and I thought, it's gone too far, can't go any further, it must come back eventually, and had a bigger trade on it, I think even a third trade. End result - wiped out a large chunk of my bank! Just like a roulette Martingale there's no limit to how far a steam or drift can go and no limit to how much you can lose.
weemac
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I've lost fortunes doubling up. It feels like it should work but it just doesn't.
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Morbius
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Euler wrote:
Mon Oct 12, 2020 9:03 pm
Reading through this you seem to be not talking about loss recovery systems as such, but recovering a losing trade in a time-limited market?

Thanks Peter, I have just re-read your post again on "Loss Recovery Systems" and I must say that the time sensitivity does a play a big part in these pre-off horseracing markets and is what makes it totally different from most financial markets I guess.
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Morbius
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Kai wrote:
Mon Oct 12, 2020 9:05 pm
I think OP is talking about "averaging" and not loss recovery systems. Welcome to the forum btw :)
Thanks Kai, I am starting to see now just how friendly and helpful forum members can be and I didn't expect so many replies in such a short space of time. Yes you are right, I was trying to average a better price Kai and was getting into bother tying myself in knots trying to do something complex and what I thought to be intelligent when in actual fact it was dumb but you live and learn. What was troubling me was if I was somehow doing the process wrong
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Morbius
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Derek27 wrote:
Mon Oct 12, 2020 9:30 pm
Morbius wrote:
Mon Oct 12, 2020 7:39 pm
Firstly I would just like to say a big hello to all the people on the forum as this is my first post but I have been a lurker for a few years and clearly there are some very smart people around here who I hope to learn from.

So here I go then with something that has been troubling me for a while and this is to do with Loss Recovery Systems. Now before anyone sighs and raises their eyebrows at my stupidity/naivety (delete as appropriate) :D it does very much seem to even a struggling trader like me that these systems are very seductive in their lure and are nothing more than Martingales in disguise (however intricate they sometimes may be).

However there is something that is gnawing on my brain that my limited understanding cannot get my head around, hence me asking for help. Do they or do they not stand a better chance of working in horseracing markets simply because many backers are potential future layers and vice versa meaning that if you were to initially back for example and the price moved against you, a second larger entry at a better price isn't the same as a martingale on say roulette where we are essentially dealing with independent events because in horseracing there is more chance of the price retracing because of numerous factors that wouldn't apply to a game like roulette.

Or am I missing something important here regarding the dynamics of horseracing markets and that prices may steam/drift far more powerfully than I originally imagined and therefore it is closer to a martingale strategy than what seems apparent. I hope all that sounded sensible and I didn't waffle too much and lost the thread. I know what's in my head but just hope I have phrased it correctly. I really hope Peter could comment although I know this has been discussed before on this forum as I have read the thread but I don't think my question was answered (or maybe it was and I missed it). Anyway, a big thanks in advance to anyone who could help me see further than I already am.
Welcome to the forum Morbius. When I first started trading I remember a market going 15+ ticks against me and I thought, it's gone too far, can't go any further, it must come back eventually, and had a bigger trade on it, I think even a third trade. End result - wiped out a large chunk of my bank! Just like a roulette Martingale there's no limit to how far a steam or drift can go and no limit to how much you can lose.

Thanks Derek, I am slowly starting to comprehend this now and how much faster (if that's the right word) a horseracing market is compared to financial currency markets. But I do think this volatility is something to be cherished rather than feared if I can get my head around it
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Morbius
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What I forgot to mention in the OP and in regards to something that was troubling me was in the difference between a martingale on roulette which because of table limits must lose 100% of the time over time and something that is structurally similar in horseracing where there are factors that make it different.

My problem and what I couldn't figure out was if a loss avoidance system or whatever you want to call it wouldn't lose 100% of the time in the long run like a conventional martingale but would in fact be profitable over time but this time period and the stochastic process left it difficult to see the end of the road when large losses are warping our perception. So bottom line, I was wondering if long sequences of winning races were overcoming the large losses but it took maybe a much longer sample size to prove profitability than many people were allowing for.

Sorry if I am waffling again lol
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