Market moves - right or wrong?

[Tonto]

If you assume that a drifter is worth a lay, you're on dangerous ground unless you have excellent reasons to believe that its true price is higher than the available price. Often, horses drift and drift and go on to win comfortably.

Unless you're a value specialist, I'd forget about outright backing and laying, as all that will happen is that you'll bet at efficient prices and Betfair's commission will erode your betting bank.

Jeff

From my limited experience, people either back, lay or trade. My argument is that understanding all 3 is what we need to strive for. That way, whatever situation we find ourselves in, we have a solution.

I don't have the expertise to trade. Therefore, I have no option but to back or lay.

[Tonto]

Surely a race reader can find a false drifter and leave that one and lay the others?

Indeed they can. JollyG is able to do it with incredible frequency and accuracy.

[Iron]

What makes you think you have the expertise to outright back or lay profitably?

Jeff

I don't have the expertise to trade. Therefore, I have no option but to back or lay.

[Tonto]

We now have three options:

1. Trade out for a small loss.
2. Remain in the trade and hope that the odds begin increasing again so that we can trade out for a profit. This may come to fruition or we may end up with a larger loss because the odds continue to fall.
3. Remain in the trade because we believe that horse won’t win.

If we are solely a trader and know little about horses, then we only have options 1 and 2 available. However, if we also understand horses and form etc, then, we have a third option available which we wouldn’t have if we knew little about horses.

I wondered if any of you good people wish to comment on the above?

Forget about 3 unless your name is JollyGreen.

Jeff

From my limited experience, people either back, lay or trade. My argument is that understanding all 3 is what we need to strive for. That way, whatever situation we find ourselves in, we have a solution.

Gambling stakes are much lower than trading stakes, hence 3 is incompatible with 1 & 2.[/quote]

Not necessarily.I base my staking on fixed liability and the LLR of the system.

[Iron]

How do you calculate your longest losing run?

And how confident are you that you have a long-term edge?

You might be onto a winner - I'm not trying to knock you. I'm just wondering if you're making some of the many mistakes I've made over the years.

Jeff

Not necessarily.I base my staking on fixed liability and the LLR of the system.

[Tonto]

What makes you think you have the expertise to outright back or lay profitably?

Jeff

I don't have the expertise to trade. Therefore, I have no option but to back or lay.

I don't have any trading expertise other than a rudimentary understanding of the basic principles of trading ie. buy low, sell high.

I didn't say that I layed/backed profitably. I merely stated that I'd no option but to back/lay because I didn't possess the expertise to trade.

[Iron]

In that case, it might be best to:

A. Learn how to trade profitably.

OR

B. Learn how to back or lay profitably.

OR

C. Do neither, and find an alternative way to make money.

However, putting money into the market when you don't know what you're doing is a guaranteed recipe for losing money.

Jeff

I didn't say that I layed/backed profitably. I merely stated that I'd no option but to back/lay because I didn't possess the expertise to trade.

[Zenyatta]

However, putting money into the market when you don't know what you're doing is a guaranteed recipe for losing money.

Jeff

The sardonic cruelty of stating the obvious

Look Tonto, unfortunately, gambling is no easier than trading - there will be no relief for you there. It will likely take you months (or even years) to learn to profit from either.

[Tonto]

However, putting money into the market when you don't know what you're doing is a guaranteed recipe for losing money.

Jeff

The sardonic cruelty of stating the obvious

Look Tonto, unfortunately, gambling is no easier than trading - there will be no relief for you there. It will likely take you months (or even years) to learn to profit from either.

Ferru123/Zenyatta

I didn't say that I didn't know how to back/lay profitably either. All I've stated is that I don't know enough about trading to think that I could win consistently.

[Iron]

So what's your plan of action then?

Jeff

I didn't say that I didn't know how to back/lay profitably either. All I've stated is that I don't know enough about trading to think that I could win consistently.

[Tonto]

So what's your plan of action then?

Jeff

I didn't say that I didn't know how to back/lay profitably either. All I've stated is that I don't know enough about trading to think that I could win consistently.

I don't have a 'plan' as such. My feeling is that having a grasp of backing, laying and trading would maximise my available options and, hopefully, my profit. Currently, I know nada about trading. I'm hoping that by getting involved in forums such as this one, I can pick up some pointers and which will then allow me to start digging and learning.

[Iron]

Better to be specialist than a jack of all trades and master of none IMHO. Getting profitable at one thing will take long enough, and I'd make that my initial aim if I were you. Otherwise, you risk being all over the place and getting nowhere.

Good luck on your journey to profitability though. Don't expect it to be quick or easy, but hopefully you'll enjoy it and get there.

Jeff

My feeling is that having a grasp of backing, laying and trading would maximise my available options and, hopefully, my profit.

[Tonto]

Better to be specialist than a jack of all trades and master of none IMHO. Getting profitable at one thing will take long enough, and I'd make that my initial aim if I were you. Otherwise, you risk being all over the place and getting nowhere.

Good luck on your journey to profitability though. Don't expect it to be quick or easy, but hopefully you'll enjoy it and get there.

Jeff

My feeling is that having a grasp of backing, laying and trading would maximise my available options and, hopefully, my profit.

Thanks Ferru123.

[James1st]

The only way it is possible to extract profits from pre race trading is by "following a trend". Whether you invest in following the trend or follow it and invest in its reversal, the fact is that the "trend" is the key element that produces the profit. If the odds didn't move then you would be left with scalping between 2 huge sums on the lay and back side.

Proof of the pudding is that in 95% of races there is a valuable difference between the opening odds (10 minutes out) and the closing odds (at the off); this is a trend and oppose it at your cost.

I'd disagree on your first point, it's perfectly possible to scalp given the right conditions as showed in another thread, but it would be suicide to do that in some races. Though even scalping has an element of directional bias, but it doesn't require a direction to profit from it.

Some of the semantics in the discussion are around time. The longer you are in the market the more likely it is to inherit a directional bias.

If you look at the very short term there isn't a bias, but over the long term there is (to an extent). According to my research it's difficult to spot a directional bias in less than ten seconds. But over longer time periods you get more and more confirming signals.

Once a trend is underway it's, generally, impossible for it to continue forever so that explains why reversals work.

I've managed to come up with an equation that shows you how to trade a market. Of course it's perfect once the market has passed but you can obviously use it to tease out the best characteristics and predict how a market is likely to trade and what to do about it. As you alter one parameter it affects another so that is where your trading style comes into it. More than one way to skin a cat as they say.

Stats can fool people as well. You often hear people saying the market is a zero sum game, which it can be depending on how you look at it. But if you look at the broads stats the average move is ZERO. Yes ZERO. So justification for a zero sum comment?

But that hides what the market is all about. You are trading volatility, not direction really. A steam of 20 ticks and a drift of 20 equals zero in a statisticians eyes, but in a traders eyes that looks like a good chance of a profit.

Thanks Peter.

I wasn't suggesting that it is impossible to scalp, simply that without odds movement the market generally becomes a game of who has the most money on either side of a static book. For the most part markets don't behave in that manner and years of research has allowed you an insight into exactly how, why, when and where the market moves.

Since the majority of pre race traders ply their trade in the 10 minutes or so before a race, I will restrict my comments to that time period. The opening question is whether there are trends in that period and whether it is wise to use them when trading. Patently, as I said in my last post, the odds movement between the open (10 mins out) and the close (inside the last minute) indicates that odds movement are NOT zero sum; other influences may be but odds are not. There is clearly, in each race, a macro trend for the whole period of time we are discussing. Yesterdays racing (first 24 races) yielded the following data:

13 drifters and 11 steamers; Average movement per race was 6.5 ticks (drifters avge was 5.2 whilst steamers avge was 8 ticks). Range of trend ticks was +12 (and -15) to +2 (-2). There is a net 10% bias in favourites steaming movement.

These stats are important insofar that in each race there is an obvious "macro trend" that is not difficult to locate and/or follow, assuming you know how to do so effectively. Of course, just like true love, the course of a macro trend may take a few turns but nevertheless it exists.

You wrote: "According to my research it's difficult to spot a directional bias in less than ten seconds......Once a trend is underway it's, generally, impossible for it to continue forever so that explains why reversals work".

If you are looking at the odds pattern, I agree that detecting a trend might take more than 10 seconds, but that isn't the data to be looking at, is it?

There are plenty of occasions where macro trends are long lived (not least an example in the first post in this thread) and where reversals do not materialise before the off time.

..and of course there are many times where reversals happen frequently, these being in the sine form of the minor trend movements. (note: a minor trend being the low to high points of each sine wave).

Where trend traders go wrong is in confusing macro and minor trends and attempting to jump on a "trend" too late, or simply not knowing how to detect the start and finish of both macro and minor (sine) trends.

[Euler]

Where trend traders go wrong is in confusing macro and minor trends and attempting to jump on a "trend" too late, or simply not knowing how to detect the start and finish of both macro and minor (sine) trends.

I agree

I've got some great audio somewhere of me teaching somebody. I'll see if I can dig it out but you there is another problem as well and that's the ability of people to act on information. You often tell people exactly what to do, but curiously they just don't do it. That's how I've become fascinated by the psychological aspects of things.