Calculating commissions into back testing

[warren0]

Apologies for what I'm sure is a very basic question but when you have back tested data and are attempting to chart predictions of returns, would it be fair to apply the following BASIC commission calculation into the results;

Taking any winning positions and automatically removing the 5% commissions, clearly leaving all losses untouched. Currently I am applying an IF function to calculate this for me;

=IF(Result>0, Result*0.95, Result*1)

Am I doing something crazy here, excluding premium charge varying thresholds. Just trying to get as close an estimation as I can, and I am fully aware back testing will only ever be an estimation.

Thanks in advance.

[ShaunWhite]

You want to be on the 2% rate. PC is calculated weekly and a bit pain to do in simple analysis. Unless you're already paying it then I wouldn't bother trying to include it. And by the time you are paying PC then you'll probably know all about it.

That formula looks fine, the '*1" isn't necessary though.
Bare in mind that commission is based on your profit for the market as a whole so if your analysis is working on multiple selections per market, you'll want to net up per market before deducting commish.

[Derek27]

You can calculate PC by totalling for each profitable market:

profit * (20 - (commission rate / 2)) / 100...

...and for each losing market subtract:

loss * (20 + (3 / 2) / 100).

A negative total should be ignored unless you're confident that you will be paying PC in the long run, because it represents your allowance.

[warren0]

Thanks for the insights, regarding PC I agree it'll become clearer how it affects the running should it get to the stage that it turns any real profits.

Regarding the 2% mentioning, I was slightly confused by that, I was working off the general 5% commissions on winning positions?

Again thanks for the help clarifying a few things in my understanding to go forward accurately, with reasonable expectations.

[ShaunWhite]

Regarding the 2% mentioning, I was slightly confused by that, I was working off the general 5% commissions on winning positions?

My Betfair account > Promotions and rewards > My Betfair Rewards

Screenshot_11.png

[warren0]

I did not even know that existed as an option to change your plan, thanks, that has changed a lot.

[danbenwithey]

Hi Warren,

Don't mind me asking but what procedure/system are you using to back test?