Trading- What am I doing wrong?

[Evertonboy]

Re: Trading- What am I doing wrong?

I see... Jamie dont take it personally' date=' but it is hard to imagine serious punter with virtually no Excel skills. In my opinion it is impossible to achieve any positive result without ability to record and analyse information. I would urge enyone to spent several hours and went throuh Excel Bible or some other book on Excel. I think the best help anyone could provide to you in such situation is to advise the same - learn some Excel.[/quote'] I more than capable to physically make a sheet on excel, I meant ideas of what to to make notes of throughout any trades/ watching of the markets that i do

[Kumquat Tree]

Re: Trading- What am I doing wrong?

Eh ??????? Trading has nothing to do with backing value. Trading is about predicting the movement of prices, not whether a price is value in the traditional (outright) sense.

Sorry, that's a contradiction within itself. Trading is all about backing value. And laying once the price movements have eliminates the value from the odds. So trading is all about backing value AND movement. Exemple1: Assume in an in-play soccer match a trader backs the draw at 2.06 with 2.00 being fair odds. A couple of minutes later he lays the draw at 1.80 with 1.80 being the fair value. Do the math, in the long run, this trader will a make fortune, as he "earns" himself 0.06 value with said trade. Exemple2: Assume in an in-play soccer match the very same trader backs the draw at fair 2.00 ... lays the draw at fair 1.80. Do the match, no profit in the long run, commission kills the bankroll sooner or later.

[Datapunter]

Re: Trading- What am I doing wrong? If the draw is available at 2.06 all a trader has to do is predict it will go down, then back with the intention to lay. Wether or not 2.06 is value in terms of the match ending in a draw or not is irrelevant. You do not need to determine this, only the movement. You could say there is "value to trade" but that is entirely different from value in the match winning context. In tennis a player goes 5-0 in the first set. You back him at 1.40 with the intention of laying at 1.38 when he gets the 1st set. You consider a target of 1.02 to be "trading value" as you basically bet 1.02 for him to win the next game and therefore 1st set. But the question if 1.40 is value in terms of him winning the match, "backing value", is irrelevant. Only the movement from 1.40 downwards is what matters to a trader. So yes, trading is about value, any betting is about value, but value differs in different contexts.

[Kumquat Tree]

Re: Trading- What am I doing wrong?

If the draw is available at 2.06 all a trader has to do is predict it will go down' date=' then back with the intention to lay. Wether or not 2.06 is value in terms of the match ending in a draw or not is irrelevant. You do not need to determine this, only the movement.[/quote'] Completely disagree. Let's analyze the example a bit further: If the draw odds are 2.06, and this is no Porto v Arsenal gentlemen's agreement, we are halfway down 2nd half with the current scored tied. No other realistic scenario possible. 99% of BF punters know that the odds will go down, minute by minute, unless there is a next goal, no rocket science in that. Thing is, that if you back the draw with such 3% value, wait a couple of minutes until the price is down a little, but then lay the draw at maybe 1.90 while the fair odds are 1.80, you gou are on the way to the poorhouse. Because you managed to lay the bet whilst the value has risen to 5.5%, giving you a negative total expectancy on the outcome. You do not grab enogh money from the winning trades covering your losses from trades with a goal while having an open trade, bacl bet accepted, lay bet pending. Conclusion: you need to know the value within evey trade. Because in the long run you are only profitable, if the value bought in your back bets is greater than the value sold in your lay bets. So a trader just fooling around without any idea on fair odds, just because of the assumption of an odds movement in either direction, stands no chance. Because he may have a hunch for the right direction more often than for the wrong one. But still he loses money in total, if he makes bad trades regarding the value implied beteween back and lay bet. Your trader will not be profitable in the long run, if both the odds are the fair value is - let's say - 1.40 beforesuch 6th game and 1.38 after the set. He is just changing money and paying commission. He will be only profitable, if- let's say - the fair value is 1.39 before and 1.38 after.

[Datapunter]

Re: Trading- What am I doing wrong? I could not disagree more :lol

You do not grab enogh money from the winning trades covering your losses from trades with a goal while having an open trade, bacl bet accepted, lay bet pending.

Here is the key element. The strike rate i get from successfull trades is totally different than the one i would get from traditional backing. It is perfectly possible to trade at odds that represent no value at all in outright backing. In that case the strike rate will indeed not be big enough to make a profit. But that strike rate is irrelevant. The only strike rate that matters to me as a trader is the one from the trades itself.

[Kumquat Tree]

Re: Trading- What am I doing wrong? I'm not talking about the strike rate. I'm talking about changes in value between back bet and lay bet. Some simple math: Trading the under 2.5 in-play midway 2nd half whilst the score is 1-1. a) Backing the under for 100 units at 2.10 whilst fair value is 2.00. (Sounds yummy, doesn't it?) 50% of back bets will have a profit of 110 50% of back bets will have a loss of 100 The math: 50% * 110 - 50% * 100 = 5 units profit per back bet in the long run b) Laying the under a couple of minutes later for 100 units at 2.00 whilst fair value is 1.90. 47.37% of lay bets will have a profit of 100 52.63% of lay bets will have a loss of 100 The math: 47.37% * 100 - 52.63% * 100 = 5.26 units loss per lay bet in the long run Grand Total : 0.26 units as a loss expectancy per round-turn. Doom! By the way: The strike rate (no goal during the trade) in the scenario above is 95%. Now tell me, how can it be, that such trader isn't profitable, - although he correctly identifies the price movement (again, no rocket science here), - although he backs a value bet, massive 5% value in there, yummy, - although he has a strike rate of 95(!)%. as the math proves otherwise? And the math proves otherwise because the trader does not manage to grab more value in his back bet than he later sets off in this lay bet. So again: It's not only about identifiying the price movement correctly. It's not only about identifiying the value. It's also about the knowlegde, when the value will be eliminated from the odds. Back before as long as there is value , lay after soon as there is less/no value.

[Datapunter]

Re: Trading- What am I doing wrong? Again you are mixing value from traditional betting with value for trading, they are different and you cannot mix them up like that. The strike rate you mention with backing is irrelevant as the bets never run to completion. Yes you would make a loss if you let the bets run until the end of the event, but in trading you don't do that. The strike rate you mention for laying is irrelevant as again they don't run to completion. yes, you would make a loss if you let every one run to the end of the event. But in trading you don't do that. You are determining profit on the basis of value from one concept with strike rate from another. Let's say the fair odds on an event are 2.00 and this is supported by statistical data that says blind betting results in a strike rate of 50%. The price on offer at some point is 1.75 Extremely bad odds given the context of the full event and backing at that price would result in a loss. I have a trading strategy in which i predict a price movement from 1.75 to 1.70 so when the moment arrives i back at 1.75 and then later i lay at 1.70 making a small profit on the trade. It does not always go my way but i am managing to get this right 9 out of 10 times. the one in 10 that it goes wrong i need to bail out by laying at 1.80 and take a small loss. Do i make a profit ? Absolutely, the strike rate of 90% ON THE TRADES is plenty to make a profit at the given odds. You cannot mix value from one context with the strike rate from another context.

[Kumquat Tree]

Re: Trading- What am I doing wrong?

Again you are mixing value from traditional betting with value for trading' date=' they are different and you cannot mix them up like that.[/quote'] It's basically the same. Only more complex in trading, as you need to determine the value in two bet, back AND lay. Doesn't it? You sure? What about a goal, whilst the trade is open, then your back bet runs to the end. As it is terminated immediately. Even if the lay bet is matched, you may practically feel the trade closed. But technically - and more important - mathematically you still run two bets. A back bet with 5.00 profit expectation. A a lay bet with 5.26 loss expectation. No, I don't. As can be read above, I'm talking of "strike rate" as the percentage of trades gone well, no goal whilst lay bet unmatched, that's 95%. Not the somewhat 50% the back bet or lay bet wins. ;) So far, I'm with you. You'll only make a profit in the long run, whilst the fair odds drop from 2.00 to at least 1.94 in your scenario. Otherwise your strategy can be mathematically proven unprofitable. If so, perfect. But you are not profitable, because you correctly identify the drop from 1.75 to 1.70 in 90% of all trades. You are profitable in that scenario, because you correctly identify a time frame, where the fair odds drop faster than the availlable odds. Meaning, more value in the back bet than in the lay bet. Or the other way round, less "undervalue" in the back than in the lay bet. That's what I'm taling about all the time. Nothing else. But just fooling around with a 1.75 to 1.70 drop, even at a 90% strike rate, is no profitable trade itself. Only if the fair value drops more than such 0.05 during the trade. ;)

[Datapunter]

Re: Trading- What am I doing wrong?

But just fooling around with a 1.75 to 1.70 drop, even at a 90% strike rate, is no profitable trade itself.

Come again. Back 100 @ 1.75 , lay 102.94 @ 1.70 = profit all around +2.94 ( 2.80 after commission ) Back 100 @ 1.75 , lay 97.22 @ 1.80 = loss -2.78 all around At a strike rate of 90% i think i'll make plenty. Remember i am trading the same selection/market, i only pay commission on the net profit of the market, not on each individual bet.

You are profitable in that scenario, because you correctly identify a time frame, where the fair odds drop faster than the availlable odds.

I don't need the odds to be fair in the traditional betting context. I just need them to drop and get a big enough strike rate from that prediction. That is the essence of trading.

[Kumquat Tree]

Re: Trading- What am I doing wrong?

Come again. Back 100 @ 1.75 , lay 102.94 @ 1.70 = profit all around +2.94 ( 2.80 after commission ) Back 100 @ 1.75 , lay 97.22 @ 1.80 = loss -2.78 all around At a strike rate of 90% i think i'll make plenty.

Common sense test: Why would someone a) back @ 1.75 in the first place, but not lay @ 1.75 (or 1.76)? b) trade out in your scenario? whilst fair odds are 2.00. If I had a 90% strike rate in identifying 1.75 availlable odds going down to 1.70 whilst my data tells me fair odds are 2.00, I'd go for a 100 units lay bet and hold it till the end. Because that's +12.50 average profit per every trade in the long, not just some "lousy" +2.94 in "only" 90% of trades. So what ever do you there, is does not stand common sense test. And don't have me asking which niche in BF still is that inefficient that in 90% of cases the odds move from 1.75 to 1.70 whilst 2.00 is fair value. ;)

[Datapunter]

Re: Trading- What am I doing wrong? Because that is not trading, that is betting.

[Cavendish]

[clay747]

Re: Trading- What am I doing wrong?

In tennis a player goes 5-0 in the first set. You back him at 1.40 with the intention of laying at 1.38 when he gets the 1st set. You consider a target of 1.02 to be "trading value" as you basically bet 1.02 for him to win the next game and therefore 1st set. But the question if 1.40 is value in terms of him winning the match, "backing value", is irrelevant. Only the movement from 1.40 downwards is what matters to a trader. So yes, trading is about value, any betting is about value, but value differs in different contexts.

so if the fair odds of the player winning the next game are 1.05 you accept that this will be a loosing trade in the long run?

[Datapunter]

Re: Trading- What am I doing wrong?

so if the fair odds of the player winning the next game are 1.05 you accept that this will be a loosing trade in the long run?

Yes, the fair odds cannot be determined, all you have is the odds you bet at and the strike rate you get, after a number of trades it will become apparent if you can or cannot make a profit from .02 as you will get the resulting strike rate. If after a number of trades it becomes apparent that i am unable to achive a high enough strike rate in order to make a profit from a trade when that trade provides a profit of .02 then the strategy becomes a losing one long term. The strike rate will indicate that in order to be profitable the strategy must be done at an odds shift of minimal .05 If that cannot be achieved then there is no profit to be made with that strategy and it's back to the drawing board. My only point is however that this is totally independend from odds, value. strike rate for that player winning the match, outright or even from that point on, as that is not what i'm betting on.

[Datapunter]

Re: Trading- What am I doing wrong?

And just as he backs the draw at 2.06 a goal is scored!

This risk is inherent to the details of the trading strategy and may or may not exist. If it does exist then you get a 3 way record: X number of successfull trades = small profits Y number of unsuccessfull trades = small loss Z number of high shift events = big loss ( the reverse is also possible, there could be an event resulting in high profit ) It comes down to the same thing, the number of winning trades and profit made on those winning trades, must be big enough to overcome the losses from Y and Z and you have a profitable trading strategy.

[clay747]

Re: Trading- What am I doing wrong?

My only point is however that this is totally independend from odds' date=' value. strike rate for that player winning the match, outright or even from that point on, as that is not what i'm betting on.[/quote'] Yes, but every time we trade(back then lay) in an in-play market, we are effectively creating a new back bet which is defined by the market we traded in, and the timing of the trade. In your tennis example we used the outright winner market and the start and end of the sixth game to create a new back bet on the winner of the sixth game. In a football match we could back FT 0-0 at ko, and trade out after 15mins to create a new back bet of 0-0 after 15 mins. How is this any different than walking into a bookmakers and asking for odds on a game to be 0-0 after 15mins, or the odds for the winner of the sixth game in a tennis match when the score is 5-0? So for me, trading is betting, and value is everything.

[Datapunter]

Re: Trading- What am I doing wrong?

How is this any different than walking into a bookmakers and asking for odds on a game to be 0-0 after 15mins, or the odds for the winner of the sixth game in a tennis match when the score is 5-0?

It isn't. At all. But if you intend to trade like that will you ask the bookmaker for the odds on the Draw, or for the odds of the favourite to win the tennis match. Of course not, those odds aren't relevant to what you bet on, therefore whether those odds represent value is irrelevant to you. Yes, trading is betting and value is everything, i fully agree. But you need to place value, strike rate and odds in the SAME context.

[Kumquat Tree]