Trading on Betfair for a living

[freddy]

I have never seen trading as a job for life,
But if your doing well then it doesn't need to be.

Invest you money wisely for the future,
start other businesses, buy property, whatever

and if it all ends tommorow, then it's not the end of the world, you can do other things and you will not need to get a job or worry about gaps in your C.V.

[followthatcamel]

Very interesting post. A couple of questions for Jeff re using moving average graphs; would you say that the intervals used for measuring quick/slow averages need to be "tweaked" for each market? Also would they need to be changed as you get nearer the off to reflect/capture the increased volume/activity or is this overcomplicating things?

Regards
Doug

[Iron]

Hi Doug

I'm no expert (I'm not yet even at the stage of making a consistent profit), but I would say that tweaking the moving averages isn't necessary.

BTW, I wouldn't recommend moving averages for markets that aren't trending nicely. Many trend following purists would disagree with that, but there are better ways of approaching non-trending Betfair markets IMHO. If a market is going nowhere, and you treat it like it's trending, the risk is that you keep getting stopped out for a couple of pips. It's possibly different with the financial markets, as sooner or later a bit of news will arise that will move the market. But that's not a given with a horse in the 10 minutes prior to the off.

BTW, if you're interested in the application of trend following to the financial markets, I'd recommend these books:

http://www.amazon.co.uk/Complete-Turtle ... 0061241709

http://www.amazon.co.uk/gp/product/0137 ... FPS0NE9NRN

Just so you're aware, I'm in the minority in advocating trend following. For example, Euler (Peter Webb) recommends waiting till a trend appears to be expiring, having overheated, and then trading the rebound that occurs when people rush to close their positions before the market moves too far away from them.

I hope this helps.

Jeff

Very interesting post. A couple of questions for Jeff re using moving average graphs; would you say that the intervals used for measuring quick/slow averages need to be "tweaked" for each market? Also would they need to be changed as you get nearer the off to reflect/capture the increased volume/activity or is this overcomplicating things?

Regards
Doug

[followthatcamel]

Hi Jeff, thanks for the response and the recomendations. Like everything else I guess its down to testing different settings against the same market data to see what gives a more positive reading where and when.

Regards
Doug

[Euler]

Abaut initial subject ,I think that if more and more traders go succesfully long term people will have no problem telling ''the real job'' . But when traders like Adam Heathcore quit trading for a living .this really rise some questions .

Certain strategies work really well with small stakes but you just can't scale them. If you invest money or invest in a business it's much more scalable. If you have been lucky enough to earn decent money at Betfair then it makes sense to re-invest it elsewhere. You are unlikely to be able to put it to use on Betfair.

[crossing_along]

This makes sense.

[Photon]

I’m an accountant by profession working full-time for the UK market of a global retailer. The job/money is good. But I love trading whenever I get an opportunity to trade. So I trade mostly on weekends or evenings when I ever I can (which is always less often than I wish).

I’m not here primarily because of money (which helps) but to ‘crack’ the system which I thought would be possible with little bit of learning about probability when I was at uni in the late 90s. I realised that knowing little about statistical sampling and probabilities didn’t really help to make my fortune. I got rid of the ghost then but the fascination resurfaced c. 2007 and eventually got into Betfair and Betangel.

It’s important that people set realistic goals in terms of profitability with having regards to how much time they can devote, how much learning and training that they prepared to get, their core skill sets, their background (whether gambling or financial or otherwise) etc. It’s completely foolish to think that you can make consistent high profit from the start.

If you’re in employment then forget about quitting and concentrate on your day job but trade when time permits.

The thread did get drifted but in the interesting direction nonetheless about relationship between financial markets and sports especially horse racing market. Human species are quite good at pattern recognition and it has given an evolutionary edge over other species. And this is what at play also in Betfair but patterns in sports market don’t necessarily follow the same logic as in financial markets at all times (or most times – it does on many occasions but realising them and taking advantage is another matter).

The main reason the sports trading and financial market play out differently is due to the time-frame in which the activities take place.

Without going off on a tangent the point I want to stress is that it’s good to know about probabilities, market behaviour, fundamental and technical analysis as much as you can but nothing beats a bit of visceral intelligence of pattern recognition when it comes to sports trading.

Mugsgame made interesting points about when and what type of certain things happen on regular occasions and using few (rather than many and end up complicating needlessly) some tools and act when situation arises without the need to do activities constantly.

Anyway, trading sports market is interesting and worthwhile for some people and in some situation but not all so all try to put things in perspective and your situation without jumping the gun but if you do participate in it then good luck.

[hgodden]

The main reason the sports trading and financial market play out differently is due to the time-frame in which the activities take place.

Without going off on a tangent the point I want to stress is that it’s good to know about probabilities, market behaviour, fundamental and technical analysis as much as you can but nothing beats a bit of visceral intelligence of pattern recognition when it comes to sports trading.

Very good points

[lewismbet]

I agree that you have made a number of good points in terms of people setting realistic targets and the difference between trading while comfortable [such as yourself who does not truly need the money] and someone who is FT or aspiring FT, to whom every pound counts. Howevever....

Human species are quite good at pattern recognition and it has given an evolutionary edge over other species. And this is what at play also in Betfair but patterns in sports market don’t necessarily follow the same logic as in financial markets at all times (or most times – it does on many occasions but realising them and taking advantage is another matter).

I would have to argue that almost the exact opposite is true. We see lots of false patterns and are good at recognising 'patterns' in the short-term which lead to ruin in the long-term. In other words we may see a pattern [still debatable] however we do not understand the underlying phenomenon producing the signal.

[Euler]

I would also argue that humans are very vunerable to spotting patterns where they just don't exist. They put far too much emphasis on something that has just happened rather than what is likely to happen.

[Zenyatta]

We know from Webb/Heathcote, that returns from their trading are 0.1-1%. That means that the price movements must be very very close to random. I realize they can't be totally random, or no traders would make money, but as far as we are concerned, as shown by the miniscule returns from trading, the price movements must be very very close to random.

This suggets that apparent price 'trends' are largely just optical illusion. The price is just as likely to move in as out at any given moment?

[crossing_along]

I don't know abaut that. Will be great to read some answear to this from a professional trader.

[hgodden]

The price doesn't actually have to move to make money

[LeTiss]

We know from Webb/Heathcote, that returns from their trading are 0.1-1%. That means that the price movements must be very very close to random. I realize they can't be totally random, or no traders would make money, but as far as we are concerned, as shown by the miniscule returns from trading, the price movements must be very very close to random.

This suggets that apparent price 'trends' are largely just optical illusion. The price is just as likely to move in as out at any given moment?

It depends on how you see it

I've just made £51 after greening on Real Madrid tonight, but it involved me placing an initial bet of £6000 at 1.18. This gives me a return of 0.85%

I think Peter Webb works it out over the course of a day's trading, but it just shows how the tight the % margins are on individual trades

[fuzzer54]

You become more withdrawn.
Less tolerant of people
Lose social skills.
Your friends drift away
Your friends become jealous of your easy money lifestyle.

Could not disagree more. I'm a far happier, tolerant and more sociable person now than when I was in full time employment. And as for friends, well you really need to be a bit more choosy!