Motivation from other Trader's blogs and P&Ls.

[PeterLe]

Im suspecting that what has happened here is that Peter would have laid on betfair and backed on betdaq (at odds as close as possible) to reduce PC
Over time you would expect the two respective accounts to be equal, ie neither in profit nor loss (discounting PC comm etc)
Peter has probably studied the two accounts and found that the Betfair account was in profit and then worked back from that point to understand why?

[andyfuller]

Laying Strategy.

I heard a Racing UK commentator say that if you backed every favourite on UK jump racing at SP over a year you would lose 20% of bank.
So conversley if you laid every fav presumably you would make 20%.
I guess the trick is laying at the lowest price possible.

Yup that is why I am on my beach with my auto software just laying all the fav's at SP.

But shhh don't tell anyone

In reality they are referring to the industry SP and not the Betfair SP hence that is not possible.

[andyfuller]

Im suspecting that what has happened here is that Peter would have laid on betfair and backed on betdaq

I would suspect that it is a matter of just letting it play out on BF over the long term, though that said there are plenty of times when you can back or lay on BF and do the opposite at a more favourable price on BD which would help cover the costs of such an operation.

As for doing both as Peter says, if you can do it and make money from it why not. It is a longer term stratergy that would require a bank that can take the rough with the smooth but in simple terms if you can lay a 3-1 fav at 2-1 every race you will make a nice profit over the years and in the process generate a nice bit of commission that helps reduce the PC band.

As Peter says, double bubble.

[freddy]

If in theory i could lay at or close to ISP,
I would still be tradeing / closing my positions before the off, Thus cuting out the ineveitable rollacoaster ,

This was what i was a bit baffled by in the original blog post, I was quite suprised to hear Peter was laying outright rather than trading his positions.

It's says the system is not based on horse racing knowledge or stats, so by definition in order to profit he must be getting prices low in the horses trading range ?.

If the main reason to Lay over trading is to generate commission for the P.C then fair enough, it may make sence for the likes of Peter, but for others probably not imo.

[BJGardner]

I think what Euler is saying is that the Betfair price is closest to Industry SP when the market is at its tightest (closest to 100%) so if you lay then your'e getting the best value.

Is that right?

[marko236]

I think what Euler is saying is that the Betfair price is closest to Industry SP when the market is at its tightest (closest to 100%) so if you lay then your'e getting the best value.

Is that right?

The best value for me isn't the sp price even if it's close to isp, the sp price on betfair tends to be close to break even.

[Euler]

Im suspecting that what has happened here is that Peter would have laid on betfair and backed on betdaq (at odds as close as possible) to reduce PC
Over time you would expect the two respective accounts to be equal, ie neither in profit nor loss (discounting PC comm etc)
Peter has probably studied the two accounts and found that the Betfair account was in profit and then worked back from that point to understand why?

And that my friends is how all great strategies start. Well not the PC, but the accidental discovery of something.

But I should point out you tend to find value at both extremes. I.e. people see something coming in, think the market knows something and more people back it and it marches into value. But the same happens with drifters as well.

If I'm honest, I suspect it to be a side effect of the trend following traders and little to do with punters in the market. A common mistake I see from traders is seeing a chart pointing in one direction and then extrapolating that trend.

[NeilSpence]

What would you say the most common reason for a horse to shroten(or drift) is?
Is it changing of the ground, the average joe punter piling in, traders getting out of or creating new positions which leads to a spiral as mentioend in the last post or something else completely? Which of these factors, if any actually has a bearing on what the horse will physically do in the race?
When the inital odds are set, in theory for it to change something has to have happened somewhere for a horse to chnaged from having a 30% probability of winning to 40% and surely that cant be accurate all the time. Is this how the value is created?

[lord]

All of the above + lots more including traders just trading/manipulating the figures + the herd mentality.

Look at the race as a whole and then try and work out what reasons are causing the shorten/drift.

You will only be able to do this by knowing your subject.

Then give a certain weight to each reason and decide its importance to the figure.

E.G My wife has made a Shepherds Pie, its lovely. What factors make it lovely and which is most important.
1. Quality of Mince
2. Potatoes soaked first
3. Keeping an eye on cooking
4. Other members of my family saying "It looks great"
5. We haven't had Shepherds Pie this month.

Once you know all the reasons why a horse drifts or is backed you can decide what weight and importance you give to the movement and take action to benefit financially.

Some races have more relevant information available, a claimer at Catterick will be less clear than a Group 1 at Ascot.

I love races where traders or bots are just trading the figures without resorting to any race research, long may it continue as I benefit from their lack of knowledge.

I believe to make any real money you have to know your subject fully, even knowing your subject fully you will make errors, but the % of errors you make will be less, the % of correct calls you make through research should outweigh the errors and that is where the profit comes from.

I know nothing about Brain Surgery or DIY and would not expect to profit in these subjects. However had I learned and studied these subjects I would be in a better position. It seems many want to make successful trades without knowing their subject.

I only trade when I believe that I know why the horse had shortened/lengthened, if I didn't it would just be a guess.

[NeilSpence]

Your post makes sense relating to what chnages price, but it seems not very much weight has any bearing on what the horse will be doing.
If a horse starts at 5's, and ten minutes before the off comes in to 4's then shoots back out to 6's, which happens often enough. Nothing with the horses actual chance of winning has changed so which is it.
Is it a good lay value at 4's, or is it good backing value at6's.
They say the market is always right but in cases like this it just cant be. Surely laying it at 4's gives better real value than laying at 5's only 5 mintues before?
There can't always be enough legit inside info to justify that movement. Is this how value is sought with a limtied inside knowledge?

[lord]

There is more than 1 market available on sport, you have 2 exchanges and hundreds of bookmakers. Horse Racing markets both on the exchange and at the bookmakers are partly formed by inside knowledge alongside form study. This knowledge is reflected in the prices on offer. The bookmaker and exchanges are not 100% true reflections because many are deliberately trying to succour you into backing and laying, so the market is not a true reflection as some are trying to confuse you. Knowing the form should help you read when the market is talking utter nonsense, this goes back to my point of knowledge.

[freddy]

Your post makes sense relating to what chnages price, but it seems not very much weight has any bearing on what the horse will be doing.
If a horse starts at 5's, and ten minutes before the off comes in to 4's then shoots back out to 6's, which happens often enough. Nothing with the horses actual chance of winning has changed so which is it.
Is it a good lay value at 4's, or is it good backing value at6's.
They say the market is always right but in cases like this it just cant be. Surely laying it at 4's gives better real value than laying at 5's only 5 mintues before?
There can't always be enough legit inside info to justify that movement. Is this how value is sought with a limtied inside knowledge?

When people say the market is efficient from a gambling perspective, then they generally mean at S.P,

For example, backing or laying all favourites at Betfair .S.P
would in the long term break even, before commission.

But it’s only efficient based on backing or laying horses at random,

With a great knowledge of the sport or some Trading skills you can overcome this and make a profit.

As you said If a horse starts at 5's, and ten minutes before the off comes in to 4's then shoots back out to 6's, then clearly it’s value at one point or other,
But deciding where is what takes the skill.

If you could lay or back near the bottom / top of a horses range,
which I guess is what Peter is able to do,
Then you will make money laying or backing even at random,
i.e. with no knowledge of the horse in question or it chances of winning.

But you would also be potentially a world class trader.
So not sure i would bother with the laying Myself

[Naffman]

Days when you don't expect much from sometimes end up suprising you. Only 1 loss from a perfect day, but I don't think anyone would complain with that.

[herbie]

welol done Naffman. good work

[Naffman]

Thanks herbie, hope your trading is going OK