Staking

[Talkbet]

I'd like a bit of advise regarding staking and trying to get it right. At the moment I'm using fixed amounts based on the various odds increments, however, I've just started looking at tick based staking.
I've done a bit of working out and something doesn't seem right.
Based on a £5 tick stake:
If I make a 10 tick profit between 1.45 and 1.55 (stakes become £500) I make £50. If I then green that across all outcomes (as I always do) that then becomes £34.48
Using the same £5 tick stake but with lay odds of 4.5 and back odds of 5.5 (stake becomes £50) I still make £50 but the green out value now becomes just £11.11

So using the examples above, even though I'm making a 10 tick profit the difference between the 2 totals is quite a contrast.
I realise that obviously the higher odds are causing a lower green out value but I was wondering if there's another way of working it out so that a 10 (or any set amount) tick profit on any odds level means a more level green ?
Hope you understand all that....

[malcster2]

when you are greening up, you are spreading the profits across the other runners. the more runners, the less profit

[Talkbet]

No thats not true, it makes no difference how many runners there are. Its the odds that make the difference when greening up.

[xitian]

Hi Talkbet,

I've always thought the same thing. Often I read about how traders are staking a certain amount which gives them a certain profit per tick, but they refer to this profit which is not green. So it's only really profit when that horse wins. If you green up the actual profit will vary depending on the price.

I always stake tick per profit greened up. This way, while I'm learning, I can decide I'll train with 20p per tick, say, and I'll adjust my stake before trading so that it's 20p per tick greened up based on the price of the runner I want to trade. That way, whatever I'm trading I know how much I'm making per tick. It's sensible when you think about it because it means you'll be staking a lot more on a short runner compared to a very long runner in order to achieve the same tick profit (greened up). Then, as I get more confident I raise the profit per tick.

In effect it's normalising your profits independently from the price of the runner. If you keep good records of your trading, it can also help to show where you're doing well and where you're going wrong, because you'll know roughly how many ticks you won/lost relative to each runner you traded.

In order to calculate profit per tick greened up you'll need to adjust your stake based on the price before you trade, and of course it skews as the price steams or drifts, but doesn't make too much difference unless there's a massive swing (or you're on a tick increment change). I have a spreadsheet which calculates the stake required for a specific profit per tick, which I'm happy to send you if you want.

Of course your stake size should depend on other factors as well, but when I was starting out this is what I used to use. I have to say that I'm not a massive manual trader though, so perhaps some of the others have more/better advice.

Cheers,
James

[Talkbet]

Hi James
Many thanks for that, much appreciated. I'll look into it further (when I'm at home and can fire up Betangel!) and take it from there.
If its not to much trouble, could you send a copy of the spreadsheet or post it up here ?

Cheers
Talkbet

[JollyGreen]

Talkbet

The basic difference is only related to the price. if you trade a horse that is priced <2.0 then by definition you are expecting the price to move a lot more. You will notice that below 2.0 the price changes 0.01 per tick. If you move above 2.0 it becomes 0.02. If you then look at a horse priced at 4.5 the changes are 0.10 per tick above and below. In a "normal" market you would not realistically expect to catch a move from 4.5 to 5.5. Yes, you will get these moves but overall the price should be more stable. When they occur they can be hard to catch correctly and invariably you get caught out and they rob you of a large chunk of profit. This is because they are not the norm and you should look to trade the norm rather than the exception.

If you look at a horse price around 2.0 then a move out to 2.14 or in to 1.88 would be considered the norm. That doesn't make them easier to trade but it does make it possible to achieve and it is not the exception. I hope that makes sense to you but please ask if you want clarification.

It also relates to volume of money in the market. If you were to lay a horse at 2.0 with £500 then your liability is £500. That amount would normally fit easily into a market if the horse is priced at 2.0. e.g. £500 would not look out of line in that type of market as there should be ~£1000s on a fav of this type.

If you lay a horse at 4.5 with £500 then your liability becomes £1750 which means you require a large bank and a higher pain threshold. You must also account for the market e.g. Would £500 look out of line with the rest of the money in the market? Admittedly £500 at 4.5 will be fine at Goodwood next week but at Wolverhampton on a Monday afternoon you would expose yourself to unnecessary risk.

That is why most traders look to work with the shorter priced favourites as they know the moves will be larger overall and they can gain higher profits. Conversely you must be prepared to accept larger losses because any move against you will also be greater.

The use of a tick size is negated somewhat when you get a meeting like Glorious Goodwood. Top traders will be looking to push as much money through the market as is possible. Because the volume is high it reduces the risk of a price moving from 4.5 to 5.5 so quickly that you cannot exit.

[Alpha322]

when you are greening up, you are spreading the profits across the other runners. the more runners, the less profit

Not true, it is the whole traded value divided by what ever side of the book you close out on as far as i know the amount of horses players doesnt come into it

[Alpha322]

If I make a 10 tick profit: between 1.45 and 1.55 (stakes become £500) I make £50. If I

Do you make 10 tick profits on swing trading, i now stake using a percentage of the bank and go for less ticks say 4 on a swing, to achive 10 is far and few between, or you can scalp say 2 ticks a time. I stopped scalping as i found BF wanted data charge usesage fee off me

Good topic

[Talkbet]

Jollygreen - Thanks for the reply. I'm only using the 10 tick analagy as an example. Having said that, it's also the way I prefer to trade I try and catch 'big' swings out of the defined trading ranges, I've never really got to grips with scalping and 'fill-rates', something that other (far more accomplished!) traders regularly talk about on here. I prefer taking a longer term view of a market and find this a far less stressful way of trading, it also means you can use smaller stakes.
Using your example, (this is all hypothetical obviously) if we then assumed a £500 lay at 4.5 and then back at 5.5 then we would be sat on £500 profit which when greened across all outcomes becomes £111.11
What I was trying to ask is there some mythical equation that could be used to give a 'rough' tick profit across all odds levels.
I think I'm probably over complicating it all a little but the information about odds moving more at the lower levels is interesting, certainly food for thought there.
James has also added in plenty to think about as well as mailing me over a spreadsheet.
I only trade the evening races but last night I recorded the following break outs(might be of interest)
2.4 down to 2
2.44 up to 2.6
4.3 up to 7
5.8 up to 6.4
4.3 down to 4.2
5.6 up to 6.6
2.96 up to 3.1
4.2 down to 3.2
3.2 up to 3.55


Thanks again.
Talkbet

[Talkbet]

Do you make 10 tick profits on swing trading, i now stake using a percentage of the bank and go for less ticks say 4 on a swing, to achive 10 is far and few between, or you can scalp say 2 ticks a time. I stopped scalping as i found BF wanted data charge usesage fee off me

Good topic

I tend to take a position then leave it until just before the off or a stoploss has kicked in, I rarely (unless I get interupted or need to go away from the computer) close a trade before just before the scheduled start time. I looked into trying to take 2 or 5 tick profits but the model I created just didnt bring in enough profit, it also doesnt make sense that you cut a winning trade....

[JollyGreen]

Hi again

You cannot really find a "rough" profit per tick across all prices because it is the price itself which determines both the risk and greened profit when using fixed stakes. This means it has to be different when you compare a horse at 2.0 and another at 4.5. What I tend to advise people is that because the inherent nature of a move at 2.0 is greater than that of a horse priced at 4.5 you may perform one large trade at 2.0 and several at 4.5 which result in a near even overall profit. This then comes closer to balancing the difference in greened profit.

I understand what you say about looking at larger longer term moves, something I perform myself. What I find is that on these moves there is less money in the market anyway so you have to be careful with the stakes you use as this can have an influence on the desired movement.

[Iron]

Hi Jollygreen

So is your thinking along the lines of the following:

'When I exit, I'll want to offer money to the market. If my stake plus a typical amount already waiting to get matched adds up to a figure that looks unusually large, I might have trouble getting matched at the requested price. So I need to go in with a sufficiently small stake to avoid arousing suspicion.'

Also, do you look at how quickly money is being matched, and think 'I need to go with a stake that means that, when I offer money, there will be enough time for the stake to be taken at the current fill rate before the market moves further against me'?

Thanks

Jeff

If you were to lay a horse at 2.0 with £500 then your liability is £500. That amount would normally fit easily into a market if the horse is priced at 2.0. e.g. £500 would not look out of line in that type of market as there should be ~£1000s on a fav of this type.

[Ginger8585]

Hi Talkbet,

I've always thought the same thing. Often I read about how traders are staking a certain amount which gives them a certain profit per tick, but they refer to this profit which is not green. So it's only really profit when that horse wins. If you green up the actual profit will vary depending on the price.

I always stake tick per profit greened up. This way, while I'm learning, I can decide I'll train with 20p per tick, say, and I'll adjust my stake before trading so that it's 20p per tick greened up based on the price of the runner I want to trade. That way, whatever I'm trading I know how much I'm making per tick. It's sensible when you think about it because it means you'll be staking a lot more on a short runner compared to a very long runner in order to achieve the same tick profit (greened up). Then, as I get more confident I raise the profit per tick.

In effect it's normalising your profits independently from the price of the runner. If you keep good records of your trading, it can also help to show where you're doing well and where you're going wrong, because you'll know roughly how many ticks you won/lost relative to each runner you traded.

In order to calculate profit per tick greened up you'll need to adjust your stake based on the price before you trade, and of course it skews as the price steams or drifts, but doesn't make too much difference unless there's a massive swing (or you're on a tick increment change). I have a spreadsheet which calculates the stake required for a specific profit per tick, which I'm happy to send you if you want.

Of course your stake size should depend on other factors as well, but when I was starting out this is what I used to use. I have to say that I'm not a massive manual trader though, so perhaps some of the others have more/better advice.

Cheers,
James

talk talk, I've been trying to work out the same thing.

I want to pre-define my risk/reward based on greened profit/loss per tick (within the cross over points) i.e. I want to risk 5% of my £1000 bank = £50... then lets say (for example) i want to spread that risk over a 10 tick stop loss. Then based on that i could work out my stake for that given price.
James i'd very much appreciate if you could send me that spread sheet to have a play with. Thanks

[xitian]

Holy moly! That post was from 5 and a half years ago! Took me a while to remember writing that.

Amazingly though, I still have that spreadsheet (attached). It's very simple - Just allows you to specify how much each tick is worth (tells you what stake to use) when green-ed up based on the price. Of course it'll only be an estimate, and of course it won't work around the cross-over points as you've mentioned. You should be able to play around with the formulas and tailor it to your needs though. The cells with borders are the ones I expected to be edited, but of course you can do what you want with it.

[Ginger8585]

HAHA i did think it was a long shot given the age of the post!!

thanks mate... much appreciated

Darren