You can test all variables you want (of course, they have to make sense) and you realize that there is no edge, because it seems EVERYBODY knows it.
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The example is trivial, my research was way deeper , but i hope you understand what i meant.
The point is, as football markets, i don t see emotions. It seems all mathematics and statistics. I m paper trading mostly breakpoints and all i see is that every situation has the perfect win/loss ratio, even the most particular, it s perfectly right. Are all people playing with statistics? And are all people so deep in research like myself, or you in this forum?
I doubt it, but however, this is the situation. People would panic if a breakpoints is scored in the third set by the underdog at 4-4, the result would be a bigger win than average, or less then average, but it is always the exact probability. The only explanation is that only Betfair has the resources to do control prices
If you see £1000s available to back at 2.5 and £1000s available to lay at 2.52, it doesn't mean that everybody agrees that that's the true probability. There will be punters, traders, botters, statistical researchers that would back it at 2.44 or lay it at 2.56! The thing is, those bets have been swept up and the market has found its mean position.
I m not talking in a "static" way, i make an example:
Let ' s say Federer sucks when is 40-0 ahead against all players : for fun, let s say the chance of deuce is 30 %
Did he lose the first set? then 40 %, did the opponent break back twice, then 50% , etc etc
You can test all variables you want (of course, they have to make sense) and you realize that there is no edge, because it seems EVERYBODY knows it.
It is not plausible. In situation 1 you win 30 and lose 70, in situation 2 40/60, in situation 3 50/50.
You are always break even. How can you be break even if you constantly rise statistically your strike rate, assuming that the majority of people does not consider that variable?
The example is trivial, my research was way deeper , but i hope you understand what i meant.
The fact that people make money trading tennis (I've made modest profits but I've only traded about 100 matches) is confirmation that the market isn't always right, everyone doesn't know the probabilities so you can have an edge. Just take a look at some of Dallas's posts on the tennis thread. There have been some crazy prices on offer. Everybody has their own opinion of a player's chances which is why the market bounces about, and it's the opinions that are on average more accurate that come out on top.
You can test all variables you want (of course, they have to make sense) and you realize that there is no edge, because it seems EVERYBODY knows it.
...
The example is trivial, my research was way deeper , but i hope you understand what i meant.
So, if the market is always right, you can't beat it. I don't see any reason to continue then
the market always has deviations, overreactions, trends that can be followed. these are opportunities that you (depending on your skill and knowledge about the markets) spot and take. If you are more that 50 percent (+ commission) on the right side you make money.
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So, if the market is always right, you can't beat it. I don't see any reason to continue then
the market always has deviations, overreactions, trends that can be followed. these are opportunities that you (depending on your skill and knowledge about the markets) spot and take. If you are more that 50 percent (+ commission) on the right side you make money.
Good example to illustrate the point, if the market was always right the pre-start graph would always be a near straight horizontal line.
Efficiency is all down to how you measure it but NO the market is not efficient, unless you do everything at random.
The market is made up of good and bad guesses and there are a lot of a bad guesses. We all sit on the other side of these and accept thin margins sharing out the spoils.
Efficiency is one of the things thrown at me all the time, yet I've been sat here for 20 years profiting in a market where there isn't supposed to be any profit because it's efficient. Either the market is inefficient or my I've been the luckiest person ever born.
Who is comparing prelive markets like horse racing and tennis inplay markets is making a mistake, in my opinion.
Question , only about tennis markets : someone posted me a "overreaction" graph, but following the logic, you know that something is overreacting when you know the probability of that event to occurr, did you measure it?
Not surprised to see threads about market efficiency regularly pop up, it's an age old question about the markets overall long before Betfair showed up. Quants seem to often struggle in understanding how the markets work and where the edge is, while traders struggle with getting rid of their gambling habits. Best to keep an open mind and to avoid making final conclusions, it's very easy to change your mind several times over once you get immersed deeper into the market mechanics.
Think I've mentioned it a couple years ago but at least in tennis you have a very simple market with 2 outcomes and you can measure that however you like, all of the relevant data is there for you too see and analyze. If you look closer and break down a single tennis market that is not super liquid you can see and identify most of the market participants and their various trading styles, the nature of the market is that there are no suspend mechanics in place and because of its dynamic movement each point the ladder is often emptied and the money has to re-appear constantly so there aren't many hiding places like in other sports. You should be able to see the market making bots that hold the value prices for that particular moment, you'll see smaller market making traders who offer up their stakes on stupid prices when all the money is gone, hoping to get matched during that brief period before the courtsiders money swoops in, you'll see scalpers during breaks and you'll be able to see regular traders/punters entering and exiting with their obvious and flat stakes at key moments in a match where there's a lot matching going working out good risk/reward situations etc. On lower liquid markets you may see bigger manual market making traders that will simply control the whole market and crush it by absorbing most of the noise, although apparently there's been a steady decline of liquidity on tennis markets and some of the edges that people use has grown weaker, cannot confirm that since I haven't looked at a tennis market in a while, other than grand slams.
The point being that all of these market participants have an edge of their own, some big and some small, they wouldn't be active in the market if they didn't have an edge. As Euler says, you're asking the wrong question, you should just be looking to buy and sell volatility or trade the noise etc, don't worry whether the market is efficient in the long run or not or who is going to win a particular match.
Who is comparing prelive markets like horse racing and tennis inplay markets is making a mistake, in my opinion.
Question , only about tennis markets : someone posted me a "overreaction" graph, but following the logic, you know that something is overreacting when you know the probability of that event to occurr, did you measure it?
You don't have to know the probability - you use your judgement on what the probability is and whether there has been an overreaction. If you make a long term profit then you know your judgement is accurate, or at least collectively more accurate than the people on the other side of your trades.
Not surprised to see threads about market efficiency regularly pop up, it's an age old question about the markets overall long before Betfair showed up. Quants seem to often struggle in understanding how the markets work and where the edge is, while traders struggle with getting rid of their gambling habits. Best to keep an open mind and to avoid making final conclusions, it's very easy to change your mind several times over once you get immersed deeper into the market mechanics.
Think I've mentioned it a couple years ago but at least in tennis you have a very simple market with 2 outcomes and you can measure that however you like, all of the relevant data is there for you too see and analyze. If you look closer and break down a single tennis market that is not super liquid you can see and identify most of the market participants and their various trading styles, the nature of the market is that there are no suspend mechanics in place and because of its dynamic movement each point the ladder is often emptied and the money has to re-appear constantly so there aren't many hiding places like in other sports. You should be able to see the market making bots that hold the value prices for that particular moment, you'll see smaller market making traders who offer up their stakes on stupid prices when all the money is gone, hoping to get matched during that brief period before the courtsiders money swoops in, you'll see scalpers during breaks and you'll be able to see regular traders/punters entering and exiting with their obvious and flat stakes at key moments in a match where there's a lot matching going working out good risk/reward situations etc. On lower liquid markets you may see bigger manual market making traders that will simply control the whole market and crush it by absorbing most of the noise, although apparently there's been a steady decline of liquidity on tennis markets and some of the edges that people use has grown weaker, cannot confirm that since I haven't looked at a tennis market in a while, other than grand slams.
The point being that all of these market participants have an edge of their own, some big and some small, they wouldn't be active in the market if they didn't have an edge. As Euler says, you're asking the wrong question, you should just be looking to buy and sell volatility or trade the noise etc, don't worry whether the market is efficient in the long run or not or who is going to win a particular match.
Interesting post, in your description i m a trader who trades on keypoints, i understand you re more into cold trading, i guess. But if i trade live, i have to know who are the players, probabilities etc...
Is there anyone trading order flow in live horse racing? i don t think so...
Who is comparing prelive markets like horse racing and tennis inplay markets is making a mistake, in my opinion.
Question , only about tennis markets : someone posted me a "overreaction" graph, but following the logic, you know that something is overreacting when you know the probability of that event to occurr, did you measure it?
You don't have to know the probability - you use your judgement on what the probability is and whether there has been an overreaction. If you make a long term profit then you know your judgement is accurate, or at least collectively more accurate than the people on the other side of your trades.
Guessing is the worst thing one can do, i think the reason to enter a trade must be more solid
Is there anyone trading order flow in live horse racing? i don t think so...
Yes, there are hundreds of traders from Portugal and Brazil alone on racing inplay, they're not big fans of prerace markets like the British. Bickat is their most famous inplay trader, although there are others as well, some who sell video courses on how to read the order flow and read the race itself, so that's why it's so popular over there.
Guessing is the worst thing one can do, i think the reason to enter a trade must be more solid
if you mean by "guessing" doing random stuff then you're right although it's not easy to be random in actions. But when you have a bit of logic on your side that's not guessing that's calculated risk. and very soon your pnl will tell you whether you're guessing or not.
Who is comparing prelive markets like horse racing and tennis inplay markets is making a mistake, in my opinion.
Question , only about tennis markets : someone posted me a "overreaction" graph, but following the logic, you know that something is overreacting when you know the probability of that event to occurr, did you measure it?
You don't have to know the probability - you use your judgement on what the probability is and whether there has been an overreaction. If you make a long term profit then you know your judgement is accurate, or at least collectively more accurate than the people on the other side of your trades.
Guessing is the worst thing one can do, i think the reason to enter a trade must be more solid
There's a clear distinction between guessing and using your judgement. If you're not guessing or using your judgement, what the hell are you doing, calculating the precise probability?
You don't have to know the probability - you use your judgement on what the probability is and whether there has been an overreaction. If you make a long term profit then you know your judgement is accurate, or at least collectively more accurate than the people on the other side of your trades.
Guessing is the worst thing one can do, i think the reason to enter a trade must be more solid
There's a clear distinction between guessing and using your judgement. If you're not guessing or using your judgement, what the hell are you doing, calculating the precise probability?
Well, everyone has his method. The problem is, if you don't have solid and empirical proofs thatt you have an edge over them markets, how will you behave when you will make bad judgements for days, or a month?
