What's a decent Profit / Turnover figure on a strategy?

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eightbo
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Location: Malta / Australia

I am doing P&L ÷ (Matched Bets * Stake)

Not sure if this is how I'm meant to do it or not but 2x £2 Lays @ 4.5 & 1x £2 Back @ 6.6 is totalling £6 "Turnover" (3 * £2)
So if we imagine my P&L was +£0.30 across those 3 bets I'm arriving at 5% for Profit ÷ Turnover.

(I've used stake here for simplicity's sake, in the real calculation, I am using total matched to account for partial matches)

...Is this calculation a useful indicator of performance?
...If you use this calculation, what % do you consider to be 'good'?

I have so far only found this old thread from PeterLe which states 3%
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ShaunWhite
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Joined: Sat Sep 03, 2016 3:42 am

There's only one number that matters, the one you type into the withdrawal amount box.

But tbf there's so many ways to trade that even pl/liability turned over is only really a measure of what you do, so how you calculate it is up to you so long as it's consistent. If you must put a figure on it then anything approaching 4% should be seen as a temporary. Opinions will vary, that's just a finger in the wind number.

Arguably a lower RoI could be due to trading 'better'. Scratching a lot of trades will increase your turnover without necessarily changing your profit and therefore reduce your RoI, whereas riding out the reds back into scratch will reduce your turnover and therefore make your RoI look better. Not a great example but turnover is irrelevant when you cash up at the end of the month.
eightbo
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Location: Malta / Australia

Makes a lot of sense and some things I'd not thought of. I'll compare performance locally over time to this particular strategy then.
weemac
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Turnover is vanity; profit is sanity.
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ANGELS15
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weemac wrote:
Wed Apr 17, 2019 10:42 am
Turnover is vanity; profit is sanity.
And money in the bank is reality!
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Kai
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weemac wrote:
Wed Apr 17, 2019 10:42 am
Turnover is vanity; profit is sanity.
Very true, that's a great saying. Turnover often sounds far more impressive than it actually is.
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liero1
Posts: 36
Joined: Mon Sep 24, 2018 3:28 pm

eightbo wrote:
Tue Apr 16, 2019 11:52 pm
I am doing P&L ÷ (Matched Bets * Stake)

Not sure if this is how I'm meant to do it or not but 2x £2 Lays @ 4.5 & 1x £2 Back @ 6.6 is totalling £6 "Turnover" (3 * £2)
So if we imagine my P&L was +£0.30 across those 3 bets I'm arriving at 5% for Profit ÷ Turnover.

(I've used stake here for simplicity's sake, in the real calculation, I am using total matched to account for partial matches)

...Is this calculation a useful indicator of performance?
...If you use this calculation, what % do you consider to be 'good'?

I have so far only found this old thread from PeterLe which states 3%
Just make sure to use liability (for lay staking) to calculate your ROI, doesn't make sense on stake for lays.
spreadbetting
Posts: 3140
Joined: Sun Jan 31, 2010 8:06 pm

liero1 wrote:
Thu Apr 18, 2019 1:17 pm


Just make sure to use liability (for lay staking) to calculate your ROI, doesn't make sense on stake for lays.
I'd have thought simply using your opening bet's exposure is the best guide for any ROI figure but it'd be such a pain separately out if you layed or backed first. When I've calculated in the past using both exposures,lay +back, I think i was in the low single figures. These days I take a more relaxed view to my trading and really only keep an eye on the withdrawals, my take per market has definitely decreased but been offset by ramping up the number of markets I play for various reasons.
LinusP
Posts: 1871
Joined: Mon Jul 02, 2012 10:45 pm

liero1 wrote:
Thu Apr 18, 2019 1:17 pm
eightbo wrote:
Tue Apr 16, 2019 11:52 pm
I am doing P&L ÷ (Matched Bets * Stake)

Not sure if this is how I'm meant to do it or not but 2x £2 Lays @ 4.5 & 1x £2 Back @ 6.6 is totalling £6 "Turnover" (3 * £2)
So if we imagine my P&L was +£0.30 across those 3 bets I'm arriving at 5% for Profit ÷ Turnover.

(I've used stake here for simplicity's sake, in the real calculation, I am using total matched to account for partial matches)

...Is this calculation a useful indicator of performance?
...If you use this calculation, what % do you consider to be 'good'?

I have so far only found this old thread from PeterLe which states 3%
Just make sure to use liability (for lay staking) to calculate your ROI, doesn't make sense on stake for lays.
I don't understand why you would use your exposure as a measure of turnover, makes comparing roi of strategies that back/lay only impossible. Profit over size staked/settled is what I have always used.
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Derek27
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It all depends on how you interpret the word 'investment' in ROI. Taken literally, your maximum liability was the investment, but the amount you actually risked losing would be a more meaningful benchmark, and that's hard to quantify because it depends on how stable or volatile and how liquid the market is.
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Euler
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I measure profit / turnover to give me an idea of if my margins are shrinking or expanding. They have been pretty stables for years, but it's the market that is the key influencer. If I can put through decent sums I obviously do better. But if the market is think I can't push through as many orders and I do worse at the top line. But margins seem to be static for quite a few years.

I tend to invent new strategies to grow my over all pool of profits, but they are all measure separately as they all have different metrics.

Ultimately you can break down any profit into an equation to see if you can tweak part of that equation to improve yield. So it's a worthwhile exercise.
spreadbetting
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Joined: Sun Jan 31, 2010 8:06 pm

LinusP wrote:
Thu Apr 18, 2019 2:43 pm
I don't understand why you would use your exposure as a measure of turnover, makes comparing roi of strategies that back/lay only impossible. Profit over size staked/settled is what I have always used.
Why would using opening exposure make comparing lay or back strategies impossible, surely laying a 10/1 shot for £100 exposure is no different than backing £100 @ 1.1. You're simply comparing a bet's stakes and odds regardless of which way round you do it.
LinusP
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spreadbetting wrote:
Thu Apr 18, 2019 3:08 pm
LinusP wrote:
Thu Apr 18, 2019 2:43 pm
I don't understand why you would use your exposure as a measure of turnover, makes comparing roi of strategies that back/lay only impossible. Profit over size staked/settled is what I have always used.
Why would using opening exposure make comparing lay or back strategies impossible, surely laying a 10/1 shot for £100 exposure is no different than backing £100 @ 1.1. You're simply comparing a bet's stakes and odds regardless of which way round you do it.
Like Peter I use roi to compare strategies over time and against each other, its especially helpful when increasing stakes and A/B testing.

For example see graph below for two strategies, one only lays and the other just backs, using profit/size settled the roi can be compared, using exposure they can't. The profit itself factors in your 'exposure' when you win/lose so it doesn't make sense to calculate them differently.

roi = profit/size_settled
Screenshot 2019-04-18 at 15.22.02.png
roi = profit/exposure
Screenshot 2019-04-18 at 15.30.54.png
As above but zoomed in
Screenshot 2019-04-18 at 15.32.15.png
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spreadbetting
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Joined: Sun Jan 31, 2010 8:06 pm

I've no idea what size_settled is? Is it simply the stake returned from a settled market i.e. a £100 lay at 10 your settled stake is £10 win or lose?

I can see the point using stakes as a comparision measurement and use it myself to check I'm gaining value of both my backs and lays by simply looking at the agregate pnl of lays and backs separately. BUt to call it a return on investment is the only issue I'd have with it as I'd always view laying a 100's shot and backing a 1.01 as the same thing if I want some guage of my return to turnover.

But at the end of day as long as people are consistent in their approach they'll be able to guage whether they're progressing or not. For me these days I'm going backwards profit per market wise but overall yearly pnl is up simply because I churn over more markets.
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ShaunWhite
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Joined: Sat Sep 03, 2016 3:42 am

Answer still seems to be to calculate whatever you want for your own use, but it's pointless comparing your apples with other people's oranges.

The factor nobody has mentioned is time, all measures of performance require it. if I made £100 by turning over 10grand in an hour then that's better than if i'd previously taken all day to do it. Both have the same return but the former has earned me 7 hrs to do whatever I want, trading or otherwise. Where's the value of that in the calcs?
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