Level greening vs larger greens

[stueytrader]

Just wondering what other (more experienced) traders views are on taking level greens vs having an (opinion based) larger green running for them on some selections?

I know each selection is different, but do people favour either process generally, in their own practice with trading?

I tend to level green more when I'm less certain of the actual merits of a selection, but often leave larger greens on specific runners when I feel I have some understanding of the race that will follow (though not actually trading during the race in all these cases).

Any other thoughts about this balance, thanks?

[Euler]

It makes no difference in the long term, but hedging and taking a profit allows you to grow your bank in a more controlled manner and give you confidence to do that.

If you think there is value then take a value bet.

Trading is the process of opening and closing a trade, maybe more than once. So hedging at then end of that process is logical, letting a random profit average out will take a long time and there is a demonstrable chance it wont. So I wouldn't recommend it.

[stueytrader]

It makes no difference in the long term, but hedging and taking a profit allows you to grow your bank in a more controlled manner and give you confidence to do that.

If you think there is value then take a value bet.

Trading is the process of opening and closing a trade, maybe more than once. So hedging at then end of that process is logical, letting a random profit average out will take a long time and there is a demonstrable chance it wont. So I wouldn't recommend it.

Thanks for the reply, makes sense - I guess that relates to the amount of 'variance' possible when leaving the bets more open (even if they're free bets)?
I do know from a psychological perspective that it's also more frustrating to have a number of 'free bets' only to see them all come 2nd/3rd!

[stueytrader]

Just a thought to add - the term 'value bet' was mentioned above. One issue/problem is that every free-bet (traded 0 one side, profit for the win) looks very much like a 'value bet', as there's no downside but possible profit!
Very often tempting (in my own experience).

[andyfuller]

Thanks for the reply, makes sense - I guess that relates to the amount of 'variance' possible when leaving the bets more open (even if they're free bets)?

I have never understood why people call green's free bets. They aren't.

If they lose you have lost money you would otherwise have had.

Say you trade a race and get a £20 green across all runners, that is now as good as cash in the hand. It is your money now (less commission).

If you then go and stick that all on one runner you are having a bet on that runner. It is no different to not trading the market at all and sticking a bet on the runner.

If it loses you have lost money either way.

It is a real bug bear of mine that people look at it this way as imho it is 100% the incorrect way to look at it. I totally fail to see how it is anything but a normal bet with your own money.

[Euler]

I thought I had done a blog post on it and I have: -

http://www.betangel.com/blog_wp/2011/03 ... -green-up/

[andyfuller]

I thought I had done a blog post on it and I have: -

http://www.betangel.com/blog_wp/2011/03 ... -green-up/

Yes I remember that blog, I also did my own study on it and found that I was far better off going with level greening because of the emotional impact letting it run had on my trading.

For example you could spend several days having great days of trading making lots of greens and letting them run only for all the horses to lose and walk away with nothing.

The impact this would have had on me would then impact my future trading.

There are several other threads on the forum that have gone into a lot of discussion on this topic. Some are quite old but just as relevant today as they were back then.

[jimibt]

i find it hard in my automation strategy/rules to NOT include greening at some constantly tweaked value. to me it feels *un professional* to let a trade expire on the basis of it reconciling at some point in the future. I'm not in this for the thrills, but can honestly say that I still get a big kick out of seeing a greened up race in front of me after only 15 seconds of action, safe in the knowledge that it's all locked down (even if only for a tenner across the board).

[edit] - one exception to the greening rule of course may be if you have a fave runner that has gone out to extreme odds and is turning back in (measured in your automation). A sneaky £2 bet on this at odds > 900 may be worth losing on the few and far between occasions vs greening out for a smaller amount on the same number of occasions

[stueytrader]

Thanks for those interesting replies, and the article above also interesting on this. I appreciate the points about how this effects both the maths and the psychology in part.

I still think my trading weakness, is knowing when to switch to what I see as a 'value bet'. As an extreme example, imagine you saw Frankel (in a weak race) trade very high (fat finger for eg), you backed him heavily, only to see that you could now leave a very large free bet on a 1.1 shot - would you never be tempted...?

[stueytrader]

Also, just to add, the other question here is whether greens should be 'exactly' equal, as there are varying degrees possible to leave even if green on all outcomes...so not just the simple 'free bet vs equal green' comparison.

[stueytrader]

I thought I had done a blog post on it and I have: -

http://www.betangel.com/blog_wp/2011/03 ... -green-up/

Yes I remember that blog, I also did my own study on it and found that I was far better off going with level greening because of the emotional impact letting it run had on my trading.

For example you could spend several days having great days of trading making lots of greens and letting them run only for all the horses to lose and walk away with nothing.

The impact this would have had on me would then impact my future trading.

Hi Andy, just wanted to come back to this point, as something struck me.
I understand this possible outcome, and the related emotional issue. However, just simply greening up doesn't remove this does it? It's still possible to trade over many races and have no profit (or even worse a loss) to show, as you have to account for losses, while smaller greens from level hedging will provide less of a cushion against any losses.

So, how does simply greening everytime protect against that possible emotional negative (i.e. trading for some time with nothing to show)?

Cheers,
Stu.

[Tanden]

Over a period of time you will have a number of negative trades and a number of potentially positive trades.

I say "potentially" because you are considering leaving them as a "free bet" every time or greening up every time.

If you green up every time then you get your profit there and then, guaranteed, which you will be able to offset against the negative trades.

If you don't green up, taking a chance on the "free bet", then, in the short run, you may be "unlucky" and not get the expected number of winners so your profits will not be as much as if you had greened every time.

For example, if you could hedge at odds of 4 you would expect about 1 in 4 to win.

Over 12 races, if you hedged 12 times you would get the same profit as if you left 12 free bets and had 3 winners.

But you may get zero winners out of 12 and then suddenly 3 in a row.

So, for those 12 races you would have no profits to offset against your negative trades putting you in a worse situation than greening every time.

Psychologically, this can be difficult to withstand and can often cause people to deviate from an otherwise long term profitable strategy.

For some, it may even end their trading due to blowing their whole bank (and so these guys never get to see the 3 winners in a row!).

And when you consider, in the long run, that the profits from the "free bets" will tend to be equal to greening every time, why take the chance?

[andyfuller]

What he said.

[stueytrader]

Thanks guys - I can see that does make sense in terms of possible variations in different runs of returns, and associated psychology. Of course that would depend on the specific 'strike-rate' (I know it's more a gambling term) of the free bets in this analysis, but I take the point about this estimated example. In essense, this question would come down to how good you were at selecting the free-bet selections, which is open to question of course and much less predictable.

I think I agree that we're in the game of reducing such uncertainty in general, so I can see that the more solid approach is definitely greening up in the long run!

[andyfuller]

If you think you can select the 'good' opportunities you may as well just bet them as normal and level up your trading profits.