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Trading the most amazing Tennis match ever!

Betfair tennis trading

Tennis is know for it’s wild variability. The scoring system lends itself to remarkable comebacks and seemingly dominant players snatching defeat from the jaws of victory. How does this translate into a profitable strategy for a Tennis trader?

I’ve always wondered who invented the scoring system fand it’s rather really bizarre oddities. But when you are actively Betfair trading this is more or less exactly what you are looking for on the betting exchanges. High volatility price movements mean plenty of opportunities to enter a trade at a reasonable point or exit for a profit when it seems lost.

However, I have to credit Tennis matches for helping me achieve a breakthrough moment in my trading career. I remember my early attempts to trade Tennis were just hopeless. Everytime I thought a player had won a match I’d back him at short odds only to see them lose. The opposite would happen too!

I mean tennis players were whacking the ball all over the place with ease, then suddenly there were not. Holding their service game one minute then suddenly two breaks of serve later their opponent is about to win the set. It was tough to find decent entry points on Tennis markets. Or so it seemed!

It was then that I realised I need to just think differently about risk and taking a position in a match. I needed to completely change my mental attitude from looking at a sport from a spectator perspective to a trading one.

My favourite Tennis trading strategy

The problem I saw with Tennis is that it was so variable, it seemed almost unpredictable at times.

Some matches were obviously skewed towards certain players. A higher ranked player very often runs out the winner against a player that is much lower down the rankings. I’ve done a separate blog post on how a very tiny amount of skill can make a big difference in a match. But if you had a Novak Djokovic against Dan Evans, then the price will obviously be very short for Novak.

So I flipped the problem upside down and started looking at a strategy that would benefit from that volatility. The key thing to know here is that laying two selection at decimal odds of 2.00 would break even, any two values below that would profit.

This also works the other way around becuase reciporacal odds are in play in a market with a binary outcome. To put this in simpler terms, if you back a player at 1.50 you are effectively laying the other player for odds of 3.00. So laying two players below odds of two results in a profit and backing two players above odds of 2.00 also has the same effect. As long as your staking is correct!

The most amazing Tennis match ever

On June the 24th 2010 we were treated to the most amazing match ever at Wimbledon, the “endless match”.

Wimbledon is known for it’s grass surface and this makes it perfect for servers. The ball bounces low and fast and this makes it hard to return serve. When Isner and Mahut took the court at 18:13 on Tuesday 22nd June they had no idea that the match would eventually finish on Thursday the 24th June at 16:47!

The final set ended up 70 to 68 in favour of John Isner. Slightly above the normal 13 games, you see in a competitive set. To give you an indication of how bizarre this match was, the final set alone was longer than the previous record for the longest match in its entirety.

The match ended up setting records for the longest tennis match ever played, the longest set ever played, the most games in a set, most games in a match, most aces served in a match, most games won by a winning (and losing) plater, most points won and most point in a match. Other than that, it wasn’t that at all special!

I captured loads of data on the match as is progressed, knowing there was something special going on that may never be repeated. I was right to do so as subsequently rules were changed to avoid these marathon slogfests at the grand slams.

From a trading perspective flipping from one player to another to trade it was realtivelyl straight forward until tiredness started to kick in much later. Even then you could see the market favoured an Isner win.

Double bubble – A slam dunk Betfair trading opportunity

The best thing about the longest Tennis match in history is that shortly afterwards it present another EPIC trading opporunity.

When Isner stepped out for his next match against De Bakker he was visibly tired, despite the tournament giving him a rest. It didn’t take long for his odds to drift and a shattered Isner to duck out of the tournament. Even if you didn’t trade the first match. The second was a bit of a slam dunk trade.

For these reasons I’ll never forget trading Wimbledon 2010!

The post Trading the most amazing Tennis match ever! appeared first on Betfair trading blog | Expert advice from Professional Betfair trade.

Betfair trading pre-off Racing with small stakes

I can trade with small stakes and big stakes, I obviously prefer to trade with bigger amounts! But I realise a lot of people who start trading are going to be using small banks and that’s what I want to talk about in this blog post. I hope this can be useful for someone who is starting out or who wants to boost their confidence starting with smaller stakes.

In this example we are specifically looking at trading horse racing. There is no particular strategy in use here. I’m an not swing trading, using weight of money or anything specific. I’m just adjusting my Betfair trading strategy based on what I see in each market.

I could be looking for very short term price movements or a long term trend. Each horse racing market is different and your strategy in it should reflect that. That is why there are so many options on trading software like Bet Angel. To give you the options to trade a market in many different ways.

One of the interesting things when you go back to using small stakes when race trading, is you realise how much easier it is to get those stakes through the market. When you look at the risk involved with the trade, if you open a position here and you close a position there, then you’ve got this spme time between the two of them, that’s the risk that you’re taking. You open a position, you close it.

Now, when you open a position, you hope to close it to lock in a profit, but you may scratch that trade for no profit or loss and we may close it for a small loss. Basically, the longer you let a position run in the market, the more it will accrue profit or loss.

So if it’s going wrong, you want to cut it out as quickly as possible.

The difference between small and large stakes when things go wrong!

With a small stake, you can go in and out of the market and it happens pretty quickly. However, when using a large stake the problem is I have to ease my position into the market, get a decent stake and then ease the position out, that’s the way I tends to work.

Typically, I don’t go into the market and go boom! There are situations where that occurs sometimes by accident, sometimes by design, but generally, that’s not how I work.

I’m effectively trying to hide in the market because when you expose a large stake in the market, people start trying to work against it. It’s much easier for me to dribble a position in and then gradually take it out. You will see this frequently when I produce Betfair trading videos, I go through the exact process.

When you use small stakes, you realise you can get them in and out quite quickly. So the interesting thing about using small stakes is your percentage return should be much higher than somebody using bigger stakes.

Example of a small stake Betfair trading

In this example, I’ve got back to trade on smaller stakes. So if you look at all of the trades that we did on this particular day, there are 15 betting markets in total. Obviously, I am using the Betfair exchange here.

My P&L’s for the day

I won on most of them and my strike rate came out at around 80% and that’s fairly typical of what I would expect. But if you look at most of these trades, they’re relatively small. I was trying to use as much as I could, only had a bank of around £400. So I was up against that limit all the time and I wanted to use more money in some of these trades, but I couldn’t.

I had to restrict my trades to much smaller levels and just work within those in the market to try and get something out of the market.

In fact, this teaches you that you’re objective in the market is to focus on the quality of the trade, not necessarily the quantity.

A lot of these values are quite small. There’s £2 and £3 here and there, but if you’re going to trade ten thousand markets, then, you know, getting £2 out of a market on average over 10000 markets gives you a decent chunk of money. That longer-term focus is how you achieve big results over the course of the year.

If I said could you make £20,000 trading the year you may say no. But if I say do you think you could get £2 on average you would probably feel that was much more achieveable.

When you get those small averages, then hopefully you can push higher and begin to scale your stakes up to larger amounts.

Everyone makes mistakes and losing trades

Highlight of my big loss in the day

You can also see here I made a complete bloody mess of one particular race and lost all in one go – that’s not unusual!

Over the course of a day, you are going to get a ‘problem trade.’ However, as long as you’re consistent in terms of the way you approach the market generally, everything will average out. You’ve got to expect that there will be duff trades coming through the market at some point. Expecting the odd howler is the best way to deal with the emotional baggage you get with it.

Usually, it’s down to things that you have no control over. You could do something and then it all unravels for one reason or another, or somebody knocks on the door or you’re distracted…you just have to accept it! Don’t blame it on anything else, accept it and move on to your next target.

I’m always really confident that by the end of the day, I will make money. I can’t say how much I will make, but I’m pretty confident by the end of the day I will. That allows me to overcome any losses that I’m likely to make, because when I’m progressing through the day, what will happen is that I will eventually get that loss back.

Having done this for many years this is the approach I’ve adopted, every day with confidence. Even if I get an early loss or a big loss mid-afternoon, I just keep on ploughing on and expecting that to turn alright at the end of the day.

I don’t sweat over a bad trade, nor celebrate a great one. It will all come out in the wash by the end of the day.

Small stakes can give you a good profit

Actually if you look at the total we ended up earning, £30 out of our £400 bank, that’s a pretty reasonable return.

Total of the day

Very often, trading over the course of the day doesn’t give you one particular trade that gets you all the profit. It’s just loads a little bit and they gradually add up to bigger amounts.

Of course, we’re using that £400 and we may use it more than once in a market, we may also use smaller amounts or bigger amounts. If you look at all of the individual transactions that I did over the course of the day, some of them are bigger than others, but that’s just a reflection of my confidence in the trade.

I’ll very often start with a set amount of money and I think, ‘yeah, this is going alright!’ So I’ll add to it and we’ll build the trade and we’ll make the trade much more interesting as it goes along.

However, if I’m not confident, I may not trade at all or I may put my first trade in and then start going, ‘hmm not so sure…’ and then just not increase the stake at all or put any additional trades into the market.

So each of these individual results were created with different amounts of money. However, it’s the ability to keep putting that money through the market which one of the huge benefits of trading. The more money you put through the market, as long as you trade it even marginally positive, you generally end up with a good result at the end of the day.

What I wanted to show you that it is possible to trade with smaller stakes and get a reasonable return out of it. Now, you’re not going to retire on £30 quid a day. But when you’re starting out, the idea is that you you can earn reasonable returns on your money that you just gradually increase your stake over time and that translates into a bigger profit at the end today. Compounding 10% a day will get you to higher stakes fairly quickly.

I only started with a small bank

On a decent race I’ll easily trade a five figure amount, if we get a really big race I’ll push to get over six figures. While those numbers sound huge, they were built from a very low based and grown gradually.

That’s how I started – I started with a tiny bank and then just kept on reinvesting the money until gradually the stakes started to curve upwards. Then it gave me the confidence to start using larger amounts without even realising it. I become very comfortable with using larger amounts as I had worked slowly to reach that point.

From a stress perspective that makes sense as well, it gives you the ability to not have to worry too much about the stakes you’re using and you can just get on and do it. If you jump into a market with large stakes straight away, the pressure will force your hand and most likely lead to a bad result.

So I hope this has shown you what an average day can look like using small stake. Hopefully the screenshots in this blog and my explanations on how I approach small stakes, will give you a bit of an insight as to what goes on over the course of a typical trading day and allow you to trade it a bit more confidently!

The post Betfair trading pre-off Racing with small stakes appeared first on Betfair trading blog | Expert advice from Professional Betfair trade.

Get a trading edge with Probabilisitic thinking

Imagine you are a caveman meandering through a landscape, you hear a rustle in the bush. “What’s that…?” Your brain kicks into action and provokes a flight or fight response. It could be lunch, or it could kill you!

Your primitive brain makes a really simple judgement and decides that the payoff here for ‘kill you’ is pretty bad, -100% in fact. The pay off for food is there as well, but it can’t offset the negative. So you walk away, cautiously.

The curious thing about this instinct is that it still persists today; in two forms. The first one is how we treat losses, but it also kicks in with how we treat outcomes.

Profits and losses

The first most notable apparition of our primitive mind pervading our modern world is that we treat losses with far more severity than profits. It’s not that we don’t value profits, it’s just that our mind is trying hard to avoid losses.

This was useful many generations ago as it stopped us from getting eaten, but is of less use in the modern world. But it still permeates our thinking.

This thinking manifests itself in a number of ways. Think about how stupid you felt when you made an unexpected loss, but also think about when that person cut in front of you when you were in line or on the road waiting patiently. Perhaps it was just a loss of face when you didn’t put across an argument very well?

Losses come in many forms and humans tend to do what they can to avoid them. When it comes to losses the quickest way to get rid of one is to double your stake and lump on the next good thing of course. Then again………

Most losses can be contained, either by forward-thinking or by managing the pay off on the other side. There is no real need to think about the rustle in the bush being a threat in the modern world, especially when trading. Successful risk-taking is all about a balance of risk and reward. Unless you are totally reckless, then the chance of something that will wipe you out should be a far-off situation and preferably, almost impossible.

When I risk money, it’s purely a question for me of what the potential long-term payoff is and I try to skew that in my favour and repeat. I don’t really care about what happens next. I care about what happens over a very long period of time.

Binary thinking

Another thing that has been transported over the millennia is binary thinking. The thought that there are only two outcomes to an event. Most people struggle to come to terms with an answer that isn’t yes or no and often base their decision on a definitive result. I rarely do.

If a politician said there was a 60% chance a policy would work, they would come under attack as being indecisive or having failed to rigorously think things through. But the fact is, at a fundamental level, that is how the universe works. There are only degrees of certainty.

If you don’t believe me, then look at how people react to the information presented in two forms.

If I give facts and judgement on a trading strategy that are based on years of experience and practice. It will lose to advice that says something along the lines of ‘Win a fortune, get a second income, quickly & easily with this secret Betfair trading strategy’. Instinct and interest are driven by fundamentally different forces. If you really want to win and develop a strategy that works in the long term, you have to go against your feelings. If you want to hand money over to a conman, just run with your instinct.

When people ask me if something will happen, I’ll typically give a probability back. People hate that. I once sat in a business meeting where a business plan was being agreed for the following year and I said we probably have a 70% chance of hitting that number. The MD just wanted a Yes or No, so I replied that I could give a Yes if the number was lower as it would be more certain. Nobody in the room really understood what I was saying.

If you try and tip a sports result, you should also say ‘There is a 65% chance of XXXX’. That would allow the punter to know how certain you are and allow them to bet the edge and manage their staking. But of course, absolutely nobody wants that, so people just nominate an outcome as though it’s a certainty. I suspect this will never change.

When I have written articles for magazines or betting sites, this is what the editors want. They called it ‘actionable content’, I call it duping people into placing an almost certain losing bet. But, of course, telling people what they should be doing isn’t doesn’t drive half as much revenue in the short term. Though I would argue the former produces a better long term scenario for both parties.

The problem with trading

I’ve spent a lot of the last 20 years solving puzzles, mainly in the market, but the latter part of my career has been focusing on the why and how. For that, I’ve looked to psychology.

The problem with trading is that it does the exact opposite of what your mind seeks. You have to deal with uncertain outcomes, with uncertain payoffs which only balance out over time. You have to actively find rustling bushes and stick your hand in with the view that it will get bitten off frequently, but that the bushes where that doesn’t happen will help provide the meat and bones to repair your partially eaten arm.

You have to get used to getting eaten, but avoid your head getting ripped off.

Trading will also nag your binary thinking mode, making you believe with certainly one thing or another when you can’t really know the outcome. This leads to mistakes in judgement. People believe that things can’t happen or definitely will happen.

Neither of those is the correct answer. People migrating from matched betting to trading often struggle with this, looking for some definite answer when one doesn’t exist. Losses hurt, a lot. But trading is full of them and your long-term goal is more or less to welcome them and move on. That’s really hard for people to do!

The beginners curse

I once had a conversation with a new trader. To my surprise, he fed back to me that he felt I was evasive and holding something back. I didn’t hold anything back, the way I described the market was what I had learnt over many years experiecen and accurately reflected the uncertain feeling you get when you trade properly.

There are no easy answers, just set-up’s, potential payoffs and risk/money management. It’s rare to find somebody that realises this straight off. Usually, they try all sorts of different trading strategies, pay money for stuff that clearly can’t work, then lose a fair bit of money, before returning to more fundamental starting points.

This new trader also spoke to somebody else, who promptly gave him a slam dunk, ‘binary’ trading strategy. It was an, if this then that type strategy, he seemed to quite like it. Of course it was appealing to a new trader, the strategy would win quite often and give anybody using it a nice warm feeling. Unfortunately, the strategy was well known, fundamentally flawed and impossible to profit from in the long term. The initial success had fooled him. It kept his mind happy, but in the long term not his bank balance.

When people show you a ‘shortcut’ to a great strategy, show it to the bin. There are no shortcuts in finding an edge, everybody has a different tolerance to risk.

I kept tabs on this chap for a while and his initial excitement eventually died away, he no longer trades having bust through several banks. I tried to nudge him in the right direction, but I’ve noticed that once somebody has committed to something it’s really difficult to get them to change their mind, backtrack and admit they were wrong.

This is another skill you need to acquire when trading, it’s ok to be wrong. But there is a caveat, sometimes you win, sometimes you learn. That’s how it should be. If you lose examine what when wrong if you could have improved some aspect of what you did. If you do this often enough you gently push yourself forward.

Our poor newbie though just couldn’t do that, he relentlessly pursued this strategy until he ran out of money.

Summary

If you want to know how to get and keep an edge, of course you need a strategy and to put some work in, but my best advice is simple.

Avoid the thought processes that most people go through. Once you identify it, you see it everywhere and see the flaws it produces. When you can see that, you can position yourself in front of flaws. Going back to our bush analogy, it’s like setting a trap. Apart from this trap has a great big sign in front of it saying don’t fall into the trap. But I assure you, there will be a never-ending number of people that will.

When you start thinking differently, some people won’t understand you or your judgements and disagreements are common. But in a market, that’s more or less exactly what you want. If everybody thought the same and did the same thing, nobody would win a penny. A difference of opinion is what makes a trading market! Welcome it, embrace it and when people disagree, learn to get a reassuring feeling about it.

It’s quite enlightening when you can stop thinking like everybody else. You can see the true colour of things, it’s not black and white, or should I say ones and zeros. Taking risk in life, on specific judgements and especially when trading, is much more nuanced than that. It’s a judgement on probabilities, where there is no definitive right or wrong answer.

It’s was a transformative moment for my trading when I discovered this way of thinking and started adapting my trading to take advantge of these flaws. So that’s why I recommened you explore it fully.

The post Get a trading edge with Probabilisitic thinking appeared first on Betfair trading blog | Expert advice from Professional Betfair trade.

Betfair API – Greening / Hedging / Cash out issues

On Friday 19th June, without any prior notification, Betfair introduced some changes and new rules to their API. This had the effect of preventing ALL API software users correctly hedging position on the Betfair betting exchange.

Typically this would have exhibited itself when trying to implement greening. The Betfair exchange wasn’t accepting orders correctly, leaving stray orders in your unmatched bet area. This meant that customers were left with slightly uneven positions in the market which they were trading.

Changes to the API should be announced in advance and that gives us time to implement and test any key changes. On this occasion Betfair changed the API without informing us, so the first we knew about it was when we spotted it ourselves when trying to hedging our own trading postions. Betfair didn’t acknoledge any changes until much later than evening.

Why did this happen?

Betfair felt the integrity of the exchange was threatened by an exploit that existed.

There has been a loophole in the way Betfair round bets for many years and is often exploited by a few users so it’s is something that’s been on their radar for quite some time, obviously though something must of happened during last week to prompt them into doing the sudden unannounced change when they did on Friday.

For example – a 13p @ 1.06 back bet is ‘unfair’ as it ‘ought’ to win 0.78p, but actually – due to the old rounding – wins 1p, which is a 28% uplift in profit.

However having hundreds and thousands of tiny bets like that hitting the exchange from various accounts purposely exploiting this loophole is bad for API stability which effects us all so its not a bad thing Betfair have taken decision to close this exploit once and for all.

What we did

Although no one was aware of this change coming, we spotted something was wrong within hours and moved quickly to release an updated build of Bet Angel later that same evening to our forum to try and reduce the wider impact these new changes were having on customers using stakes below the £2 Betfair minimum, particularly when greening up with small stakes. This enabled Bet Angel users to continue using the software and their trading throughout that weekend.

Once we were able to speak with Betfair and get clear confirmation of what exactly what it was they changed and what the new parameters and calculations now being used were we could then issue another build of this Bet Angel at the start of this week with tighter coding.

Updating Bet Angel

We recommend updating Bet Angel. These updated versions will still allow you to continue to place bets and green up with small stakes still. But due to the new Betfair rounding rules, there may be times when your P/L still ends up uneven by a few pence. So we have also updated the Bet Angel logging to spot when the API rejects these bets due to rounding, this allows users to see clearly if that was indeed the reason their order was rejected or not.

If that does happen you will see an error written to your Bet Angel log which looks like ” While Greening Up Unable to Place Lay Bet Due to Befair’s Rules Regarding Payout/Liability Rounding”

The latest builds of Bet Angel are now;

Bet Angel Profesional V1.52c

Bet Angel Trader V1.4.4c

These can be downloaded from both our forum and main website, once installed you will see one of those build numbers in the bottom right corner of the blue login window or by clicking the ‘about’ tab once logged in.

If you are installing the latest version of Bet Angel to a VPS you may need to follow the specific instructions listed on this blog post.

Note; If you are not using the latest version, you will also see a pop-up message at login prompting you to download and install the latest version.

For full details of the changes made by Betfair on 19th June please see this post from their developer’s forum

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