2 Years and still struggling

[goat68]

It's a tough journey and I've only been at pre-race horses for 6 months. The market pushes me all over the place...

[Anbell]

It's a tough game Alex.

I don't understand why you think your trading should be profitable.

This is maybe the wisest post on the forum.

[alexmr2]

It's a tough game Alex.

I don't understand why you think your trading should be profitable.

This is maybe the wisest post on the forum.

I see trading as a game, albeit a very serious one. In a typical market there is a big pot of money say £300k, a lot of this money is dumb, people are stupid and always will be (me and my emotions included at this point but not in the same way as the mug punters who make up some of that pot of money). This creates inefficiencies which makes it possible to skim a tiny percentage off that pot, even just £10 or £20 of the £300,000 is enough (or a smaller loss if it doesn't work).

So people that are very well practised can turn up to this game and spot an opportunity from patterns which allows them to make a trade which either has more chance of winning than losing or has a bigger potential upside than downside. If this is done consistently then they should have a positive expectancy much the same way a car dealer has a positive expectancy from buying below market value and selling above.

The problem is that most of this pot of money is smart, it is a zero sum game after all so not everyone can win especially those that are new. So what I'm trying to say that with enough quality practice and self-development to work on overcoming the things which prevent consistency such as emotions and bank management, it should be possible to become profitable eventually?

Big emphasis on the quality practice and constant self-development to recognise and avoid the places I lose money instead of trading every race

[darchas]

In a typical market there is a big pot of money say £300k, a lot of this money is dumb, people are stupid and always will be (me and my emotions included at this point but not in the same way as the mug punters who make up some of that pot of money). This creates inefficiencies which makes it possible to skim a tiny percentage off that pot, even just £10 or £20 of the £300,000 is enough (or a smaller loss if it doesn't work).

I see this sentiment expressed quite a lot but how true is it? How much of that money actually is 'dumb' and what makes it dumb? And if there is indeed a big chunk of 'dumb' money how exactly can you exploit it?

These are just some questions that naturally arise for me but I do think it's important to drill into these things. My own view is that five minutes before the off horse race trading is one of the hardest places on the exchange to make money, so much of the action here is smoke and mirrors that you can end up chasing ghosts. I'm interested in what it is you see here that leads you to believe you can make money here even after having put in so much effort.

Not trying to be antagonistic in any way btw, I'm hoping that this thread if anything helps you clarify and sharpen your own thinking and really helps you focus on your approach.

[JohnT]

No matter how dumb the owner of the money he can't lose at a higher rate than 1.5% in a 101.5% market. If the market price is 8/1 that the price he gets,
he might have been happy to accept 5/1 but he has to take the 8/1.

If there is £300K bet(£600K matched) on a race there is only £4.5K profit margin to share so you're trying to skim £10 or £20 from £4.5K and not £300K.

"So people that are very well practised can turn up to this game and spot an opportunity from patterns which allows them to make a trade which either has more chance of winning than losing or has a bigger potential upside than downside"

You don't know for sure that is the case.You might repeat the claim you're having a lot of help from a profitable trader but that just doesn't make sense.

Either way it's bad news for you because if people can do what you claim, it means you are competing with them for the same bets and the amount available at any given price is usually relatively small.

I'd be surprised if anyone with zero knowledge of horse racing makes a living purely by trading.

I have zero knowledge and made the best part of £100K one year.
But that was 2001 and by 2002 I had packed it in.

There is every chance that what you are trying to do is impossible,
it's now a matter of how much more of your life you're going to waste finding that out.

[Derek27]

No matter how dumb the owner of the money he can't lose at a higher rate than 1.5% in a 101.5% market. If the market price is 8/1 that the price he gets,
he might have been happy to accept 5/1 but he has to take the 8/1.

If there is £300K bet(£600K matched) on a race there is only £4.5K profit margin to share so you're trying to skim £10 or £20 from £4.5K and not £300K.

"So people that are very well practised can turn up to this game and spot an opportunity from patterns which allows them to make a trade which either has more chance of winning than losing or has a bigger potential upside than downside"

You don't know for sure that is the case.You might repeat the claim you're having a lot of help from a profitable trader but that just doesn't make sense.

Either way it's bad news for you because if people can do what you claim, it means you are competing with them for the same bets and the amount available at any given price is usually relatively small.

I'd be surprised if anyone with zero knowledge of horse racing makes a living purely by trading.

I have zero knowledge and made the best part of £100K one year.
But that was 2001 and by 2002 I had packed it in.

There is every chance that what you are trying to do is impossible,
it's now a matter of how much more of your life you're going to waste finding that out.

I see what you're getting at but that's not quite true because Betfair prices don't represent true chances. Toss a coin and offer 4-6 heads, 5-4 tails, you've got an overround of 104.5% but can lose 20%. I'm pretty sure it's possible to make a living from trading with no knowledge of horse racing. Although I used to be a profitable punter I stopped studying racing when I switched to trading and know little about Aussie racing. Trading is really a numbers game and as long as you're fully aware of your ignorance you can act accordingly, you're just more advantaged if you have knowledge.

I wouldn't say Alex is wasting his time trying to be profitable. He might be but only he can really assess his progress.

[jamesedwards]

No matter how dumb the owner of the money he can't lose at a higher rate than 1.5% in a 101.5% market. If the market price is 8/1 that the price he gets,
he might have been happy to accept 5/1 but he has to take the 8/1.

If there is £300K bet(£600K matched) on a race there is only £4.5K profit margin to share so you're trying to skim £10 or £20 from £4.5K and not £300K.

"So people that are very well practised can turn up to this game and spot an opportunity from patterns which allows them to make a trade which either has more chance of winning than losing or has a bigger potential upside than downside"

You don't know for sure that is the case.You might repeat the claim you're having a lot of help from a profitable trader but that just doesn't make sense.

Either way it's bad news for you because if people can do what you claim, it means you are competing with them for the same bets and the amount available at any given price is usually relatively small.

I'd be surprised if anyone with zero knowledge of horse racing makes a living purely by trading.

I have zero knowledge and made the best part of £100K one year.
But that was 2001 and by 2002 I had packed it in.

There is every chance that what you are trying to do is impossible,
it's now a matter of how much more of your life you're going to waste finding that out.

I see what you're getting at but that's not quite true because Betfair prices don't represent true chances. Toss a coin and offer 4-6 heads, 5-4 tails, you've got an overround of 104.5% but can lose 20%. I'm pretty sure it's possible to make a living from trading with no knowledge of horse racing. Although I used to be a profitable punter I stopped studying racing when I switched to trading and know little about Aussie racing. Trading is really a numbers game and as long as you're fully aware of your ignorance you can act accordingly, you're just more advantaged if you have knowledge.

I wouldn't say Alex is wasting his time trying to be profitable. He might be but only he can really assess his progress.

It's definitely not true in my opinion. I spent weeks trading automations that matched backs and lays on 2% commission at much better than 102% and 98% positions only to find myself getting smashed to pieces over time. It's only following conversations on here that I appreciated the value in the offer will usually be taken with the rest left on the shelf.

[alexmr2]

I see this sentiment expressed quite a lot but how true is it? How much of that money actually is 'dumb' and what makes it dumb?

A few of the things PW has mentioned in the past come to mind which I have seen with my own eyes. You only have to look at social media and the betting/trading groups to see that your average punter does not understand or care about price. Even if just 20% of the total volume is made up of these people then that is still a lot of money to go around if you have spent thousands of hours developing the extremely precise ability to consistently skim money from markets. There is also the other group of people who are newbie traders falling into the same psychological traps over and over.

No matter how dumb the owner of the money he can't lose at a higher rate than 1.5% in a 101.5% market

"So people that are very well practised can turn up to this game and spot an opportunity from patterns which allows them to make a trade which either has more chance of winning than losing or has a bigger potential upside than downside"

You don't know for sure that is the case.You might repeat the claim you're having a lot of help from a profitable trader but that just doesn't make sense.

Either way it's bad news for you because if people can do what you claim, it means you are competing with them for the same bets and the amount available at any given price is usually relatively small.

I'd be surprised if anyone with zero knowledge of horse racing makes a living purely by trading.

I get what you are saying about the efficient market as a whole but they also take wildly inefficient swings every day. How often do you see the price double or half or swing up and down xx ticks each way in the last 5 minutes? Both of these prices can't be right and it makes mathematical sense that there are opportunities within this. Not to mention some of the obvious things which can happen on live video to influence price movement.

From what I have heard and believe you don't need to know everything about horse racing to trade order-flow. PW often mentions cold trading and recently said that too much sentiment can even be detrimental e.g. cause you to hold onto a losing trade which you believe will turn around. Although there are still lots of rules and charactertistics around the sport that are a must to know

[rik]

think especially in running market overround dont have much to do with value, you get matched more often if there is a general move against you so what percentage the market overround at time of match was not that relevant, also proportionally overround is much bigger on the longshots, difference between odds 150 and 200 is not 2% is it

[Kai]

Trading is really a numbers game and as long as you're fully aware of your ignorance you can act accordingly, you're just more advantaged if you have knowledge.

I wouldn't say Alex is wasting his time trying to be profitable. He might be but only he can really assess his progress.

Have to agree with Dewick here (The Artist Formerly Known as Derek), no matter how you look at it it's all a numbers game in a nutshell with the main goal of building a probability-based mind (from a fear-based brain, yikes!).

If it's all about numbers and prices and their behavior then you don't really care who is racing or playing, it can be Steffi Graf vs Manchester United for all I care.

[georget1907]

It's a tough game Alex.

I don't understand why you think your trading should be profitable.

This is maybe the wisest post on the forum.

I see trading as a game, albeit a very serious one. In a typical market there is a big pot of money say £300k, a lot of this money is dumb, people are stupid and always will be (me and my emotions included at this point but not in the same way as the mug punters who make up some of that pot of money). This creates inefficiencies which makes it possible to skim a tiny percentage off that pot, even just £10 or £20 of the £300,000 is enough (or a smaller loss if it doesn't work).

So people that are very well practised can turn up to this game and spot an opportunity from patterns which allows them to make a trade which either has more chance of winning than losing or has a bigger potential upside than downside. If this is done consistently then they should have a positive expectancy much the same way a car dealer has a positive expectancy from buying below market value and selling above.

The problem is that most of this pot of money is smart, it is a zero sum game after all so not everyone can win especially those that are new. So what I'm trying to say that with enough quality practice and self-development to work on overcoming the things which prevent consistency such as emotions and bank management, it should be possible to become profitable eventually?

Big emphasis on the quality practice and constant self-development to recognise and avoid the places I lose money instead of trading every race

I feel i'm recognisning a lot of my own pitfalls in trading through reading what you're going through. Even though you're not profitable you seem to have a high level of awareness, and i'm convinced the biggest edge, or at least the very first most important aspect for successful traders is the psychology. We are humans, so we all see patterns everywhere in life and perhaps the traders that have made it, have grown to see the markets patterns better because they're focus was entirely on reading/attempting to read the market with an even greater absence of greed and fear.

For example, profitable traders dont need to worry if they cant see an opportunity when they open a market. They have a deep sense of confidence from experience that the right opportunity will come, perhaps in the next race. There's no rush for them, they know they will make money sooner or later. Compared to someone who is seeking to be profitable, there can be a sense of urgency, even if slightly in the background, which can lead to over trading and making wrong decisions. This difference in mindset alone i believe can make a really big difference, but its hard to ignore that urge, even if its only a slight urge.

I wonder what would happen if you used very small stakes for a week, maybe £5 stakes, and every time you opened a market you said to yourself 'there is absolutely no need to trade this market, but im going to give it some analysis and if i do spot an opportunity then i'll think about opening a position'.

This may alter your mindset even more, which may be the only thing that needs tweaking to swing things for you. I think it applies to every situation in life. Look at the people who panic-buyed toilet roll at the beginning of the pandemic. They frantically bought everything they could like mad zombies. Then there were those who didnt panic buy, but were utterly pissed off at the empty shelves. And then at the very other end of the scale, there were those who didnt let it affect their lives, acknowledged there was a shortage, got on with things, and when the opportunity arose, calmly went out and bought some.

I know this is an extreme example, but i definitely think this kind of psychology applies to all things in life, especially trading. And with even bigger tweaks to your mindset, can make a big difference i think. I know i need to work on it myself!

[Derek27]

For example, profitable traders dont need to worry if they cant see an opportunity when they open a market. They have a deep sense of confidence from experience that the right opportunity will come, perhaps in the next race. There's no rush for them, they know they will make money sooner or later. Compared to someone who is seeking to be profitable, there can be a sense of urgency, even if slightly in the background, which can lead to over trading and making wrong decisions. This difference in mindset alone i believe can make a really big difference, but its hard to ignore that urge, even if its only a slight urge.

That's an interesting point. As a punter I had no problem passing over a race with no value bet (realistically the number of good bets in a day are very limited) but as a trader, although I should know better with my experience, it's almost as though I feel opening a trade is compulsory in any horse racing market that I look at when I should just move on to the next race if nothing interests me.

[Euler]

I see this sentiment expressed quite a lot but how true is it? How much of that money actually is 'dumb' and what makes it dumb? And if there is indeed a big chunk of 'dumb' money how exactly can you exploit it?

These are just some questions that naturally arise for me but I do think it's important to drill into these things. My own view is that five minutes before the off horse race trading is one of the hardest places on the exchange to make money, so much of the action here is smoke and mirrors that you can end up chasing ghosts. I'm interested in what it is you see here that leads you to believe you can make money here even after having put in so much effort.

Not trying to be antagonistic in any way btw, I'm hoping that this thread if anything helps you clarify and sharpen your own thinking and really helps you focus on your approach.

I've studied the structure of the markets a lot in 20 years and there is a lot of dumb money in the market. I've gathered data from a number of sources to understand exactly what is going on the in market. I can elaborate next week when I have some more time if you like.

You don't really need to worry about that aspect.

[alexmr2]

I've studied the structure of the markets a lot in 20 years and there is a lot of dumb money in the market. I've gathered data from a number of sources to understand exactly what is going on the in market. I can elaborate next week when I have some more time if you like.

You don't really need to worry about that aspect.

Would make a great video or post

[Vladimir CC]

I don't understand why you think your trading should be profitable.

Might be because people believe that, unlike the stock market where they trade with banks and the best professionals in the world, on a betting market they trade order flow mainly generated by drunk punters who stick a tenner on the favourite and make the assumption that it is like a walk in the park.
I know i'm guilty of that. or was, but still... that thought hides somewhere in the back of my mind.