Spotting spoof money

The sport of kings.
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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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ruthlessimon
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ShaunWhite wrote:
Wed Jul 11, 2018 3:29 pm
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?
Rough example incoming:

Let's assume a 2.xx fav collapses 15 ticks in 30secs. My spreadsheet informs me, this could be a good place for a reversal trade. Someone then puts a £10,000 back at the low, 1 tick away from the market price - market tests the £10,000 - whether the £10,000 gets eaten or pulled, both actions could be seen as a confluence to lay.

Quantifying the 15ticks in 30secs has aided me in being able to react to the £10k stake quicker than someone relying just on "feel".

I personally believe most traders simply don't have an idea "what the market should do next" over a large sample size
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JollyGreen
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ruthlessimon wrote:
Wed Jul 11, 2018 2:23 pm


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) :)
When I started trading, Bet Angel was in its infancy. After a while I did get in touch with Peter and I did attend one of his courses because I needed to know if I was on the right track. Peter was very helpful and influential and he convinced me to pursue my trading. There is no doubt we worked well together, I had the knowledge from racing and betting and he had the trading knowledge. That is why we fed off one another so well and have remained friends for over ten years.

On the analysis side of things let me offer an insight. Peter is a genius at analysis, he can interrogate it to the nth degree; me I cannot do it and have no interest. Like I said, if it walks like a duck and quacks like a duck, it's a duck!

I come up with ideas based on my stupid near photographic memory. I try them and if they work then I exploit them. I then chat with Peter and see if he likes them. Peter will then back test them and analyse them because he likes to know why and how.

Now comes the important bit. It's like playing golf, what you do on the practice range should stay on the practice range. When you go on the course you play golf. So Peter does his analysis but when it comes to trading he does it naturally and performs what works without getting bogged down in over analysis
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ShaunWhite
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JollyGreen wrote:
Wed Jul 11, 2018 3:49 pm
So Peter does his analysis but when it comes to trading he does it naturally and performs what works without getting bogged down in over analysis
I told you Simon, he's just winging it :) aka Pragmatism

Your comments bouy me up no end JG, I dabble with the data out of a sense of 'he does so I should'. I say 'dabble' but it's about 20hrs a week.... But I don't have a 1000yrs worth and a PhD in stats so it's never going to be what gives me all the answers. I'm more your duck hunting type anyway.

I was concerned though that I only clung onto this view because, frankly, that's all I've got to go on....especially when my trading buddy is so incredibly staty.

Si, it's a shame our double act looks like Cannon & Ball compared to JG&PW's Morecombe and Wise but there's hope yet:)
Last edited by ShaunWhite on Wed Jul 11, 2018 4:15 pm, edited 1 time in total.
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ruthlessimon
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JollyGreen wrote:
Wed Jul 11, 2018 3:49 pm
I come up with ideas based on my stupid near photographic memory. I try them and if they work then I exploit them.
Is there any chance you could do a thread on this at some point JG? I personally think the topic of "idea generation" & testing those ideas properly - are the most difficult questions a novice trader has to answer. Far more interesting than trade psychology!
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JollyGreen
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Posted in error without quoting Shaun White. Posted it later with the quote...sorry! :oops:
Last edited by JollyGreen on Wed Jul 11, 2018 4:21 pm, edited 1 time in total.
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JollyGreen
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ShaunWhite wrote:
Wed Jul 11, 2018 4:10 pm
JollyGreen wrote:
Wed Jul 11, 2018 3:49 pm
So Peter does his analysis but when it comes to trading he does it naturally and performs what works without getting bogged down in over analysis
I told you Simon, he's just winging it :) aka Pragmatism

Your comments bouy me up no end JG, I dabble with the data out of a sense of 'he does so I should'. I say 'dabble' but it's about 20hrs a week.... But I don't have a 1000yrs worth and a PhD in stats so it's never going to be what gives me all the answers. I'm more your duck hunting type anyway.

I was concerned though that I only clung onto this view because, frankly, that's all I've got to go on....especially when my trading buddy is so incredibly staty.

Si, it's a shame our double act looks like Cannon & Ball compared to JG&PW's Morecombe and Wise but there's hope yet:)
Good reply, made me :D

It's true though, Peter and I can sit and talk trading all night and we often do. In fact, it is usually over a curry and we are still talking when the meal is over. We talk about all aspects from placing an order to the psychology and some of the crazy comments and messages we have received. I talk about crazy things I have seen and even crazier ideas I have come up with. Some are total nonsense and are short lived, others really do work and Peter is off analysing them. I know if I share something with him it will not be splashed all over the place and it is reciprocal. There are far better people out there than me, I have no doubt about that but I do know what works and I plough on accordingly.

I have shown stuff to Peter and it's been a WTF moment, it just seems crazy. I have no idea why it is happening, I just know it is. Peter will then analyse it, we'll check it again and then we get a grasp on why. I personally do not believe you can understand it 100% but if it works.....well it's duck hunting season!! :D
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ruthlessimon
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ShaunWhite wrote:
Wed Jul 11, 2018 4:10 pm
Your comments bouy me up no end JG
You're a victim of confirmation bias Shaun :D
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ShaunWhite
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:) It's true JG, I'll give him an idea, and when he nods his head, I'll hit it.
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ShaunWhite
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ruthlessimon wrote:
Wed Jul 11, 2018 4:27 pm
ShaunWhite wrote:
Wed Jul 11, 2018 4:10 pm
Your comments bouy me up no end JG
You're a victim of confirmation bias Shaun :D
....say's Mr sunk cost fallacy :) I'm not a victim Si, I think the correct term these days is 'survivor'

...we're here all week folks, tickets from the pier box office.
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ruthlessimon
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I think it's been interesting :D

But it's unfair!! How can I fight the data corner solo when I'm up against yourself & JG???

I need some backup from the proper quants Peter, Dallas, PeteLe, SB, Linus etc :)
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