What % of betfair users are profitable?

[mjmorris335]

I've traded slightly less than a thousand markets in seven months and, although I'm in profit, even a cursory analysis of the figures suggests it's more to do with luck than judgement.

My problem seems to be gaping holes in my knowledge - often fundamental - rather than technique, if you can call it that. I've never been a particularly emotional person (never seen the point in worrying about things over which I have no control) and I can't remember the last time I got angry about something. I have always felt that anger tends to exacerbate a situation rather than solve it, but given a few of the refereeing decisions over the past few days that might change .

What I can see happening is my luck running out before my knowledge catches up, which would be somewhat disappointing, and having to re-evaluate my position if I'm in negative territory for the first time. Although I'm really enjoying what I'm doing, I can't afford to start throwing money at it. Interesting times ahead...

[gazuty]

Reminded myself of this earlier post, which seems on topic.

For the mathematically minded.

Let us conduct a thought experiment.

Let us propose we have a participant on betfair, Mr Gazuty.

To keep things simple this version of betfair only allows a yes/no outcome bet with a 50/50 probability. For the naysayers it's all down to luck.

Mr Gazuty pays 5% commission on winnings. He starts with a bank of $1000 and pursues a modest staking plan and risks $5 on each outcome.

After 1000 events Mr Gazuty needs to have won at least 513 times to break even. ((513 X 4.75) - (487 X 5)).

What is the probability of 513 or more successful outcomes out of 1000 attempts with a 50% probability? (Calculate it here http://stattrek.com/m/online-calculator/binomial.aspx).

It's 21.4%. High enough for the naysayers to believe Mr Gazuty could easily be successful from random dumb luck.

Mr Gazuty continues.

He reaches 10,000 events.

Now to break even he needs to have won at least 5128 times.

What is the probability of 5,128 or more successful outcomes out of 10000 attempts with a 50% probability?

Its 0.5%. So after 10,000 events the chances of Mr Gazuty achieving success through pure luck is 0.5%.

And once we get to 20,000 events The probability of achieving more than 10,256 winning results through pure dumb luck is 0.015%.

Now ask yourself this question. Let's change from Mr Gazuty to the real gazuty.

The real gazuty has participated in over 70,000 markets. On the same methodology as above he'd need to be successful in at least 35,897 to be in front (and he has been).

The probability of that through random luck? You do the math.

It's possible I don't have an edge. But that possibility is infinitesimal after participating in so markets.

Still don't believe me. Interested in a challenge? Let's each start with a new account of $500. Winner takes all after one year with a participation in at least 200 markets (just to reduce the random walk). (Trouble is my non believer noob competitors will be wiped out and I'll be collecting zero from them - apart from what I collect from them through the market along the way).

At the end of the day, traders and their variants with an edge are liquidity providers to the market and their profit is the price paid for providing that liquidity.

[jimibt]

Reminded myself of this earlier post, which seems on topic.

For the mathematically minded.

Let us conduct a thought experiment.

Let us propose we have a participant on betfair, Mr Gazuty.

To keep things simple this version of betfair only allows a yes/no outcome bet with a 50/50 probability. For the naysayers it's all down to luck.

Mr Gazuty pays 5% commission on winnings. He starts with a bank of $1000 and pursues a modest staking plan and risks $5 on each outcome.

After 1000 events Mr Gazuty needs to have won at least 513 times to break even. ((513 X 4.75) - (487 X 5)).

What is the probability of 513 or more successful outcomes out of 1000 attempts with a 50% probability? (Calculate it here http://stattrek.com/m/online-calculator/binomial.aspx).

It's 21.4%. High enough for the naysayers to believe Mr Gazuty could easily be successful from random dumb luck.

Mr Gazuty continues.

He reaches 10,000 events.

Now to break even he needs to have won at least 5128 times.

What is the probability of 5,128 or more successful outcomes out of 10000 attempts with a 50% probability?

Its 0.5%. So after 10,000 events the chances of Mr Gazuty achieving success through pure luck is 0.5%.

And once we get to 20,000 events The probability of achieving more than 10,256 winning results through pure dumb luck is 0.015%.

Now ask yourself this question. Let's change from Mr Gazuty to the real gazuty.

The real gazuty has participated in over 70,000 markets. On the same methodology as above he'd need to be successful in at least 35,897 to be in front (and he has been).

The probability of that through random luck? You do the math.

It's possible I don't have an edge. But that possibility is infinitesimal after participating in so markets.

Still don't believe me. Interested in a challenge? Let's each start with a new account of $500. Winner takes all after one year with a participation in at least 200 markets (just to reduce the random walk). (Trouble is my non believer noob competitors will be wiped out and I'll be collecting zero from them - apart from what I collect from them through the market along the way).

At the end of the day, traders and their variants with an edge are liquidity providers to the market and their profit is the price paid for providing that liquidity.

really nice post and an awesome way to show time married to hit rate ...

[megarain]

Still don't believe me. Interested in a challenge? Let's each start with a new account of $500. Winner takes all after one year with a participation in at least 200 markets (just to reduce the random walk). (Trouble is my non believer noob competitors will be wiped out and I'll be collecting zero from them - apart from what I collect from them through the market along the way).

I am sure u are correct, but, we all need to challenge ourselves.

I could be persuaded to participate in some sort of challenge - providing we can agree on the rules.

I would mainly bet cricket, and would be willing to limit trades, to before game start, or intervals.

Send me PM if u interested.

[Trader_Tom]

This thread is coming along nicely. Thanks all for the input. There's some very interesting perspectives here.

One thing you have to account for when you're starting out is the number of markets traded can't always be a guaranteed indicator of long term consistency. Typically when someone starts to see positive results over a decent sample size the natural response is to begin increasing stakes. This is exactly what I have done. This will obviously skew any long term results as more recent winning/losing streaks at higher stakes will have a larger overall impact on your lifetime performance. My trading still "seems" to be successful but due to me fairly recently upping my stakes and having success those results could be slightly false. If I was a betting man (pardon the pun) I would say that I do have an edge but for now, cautious optimism seems to be serving me well. We all know confidence is important so right now my 2 main concerns are protecting my bank, and the confidence in my edge.

For anyone new also reading this. For me at least, confidence is very very important and that only comes with a larger amount of markets traded. If you are sure you have an edge then when things go wrong you won't be second guessing yourself, you will just view it as a small blip in an otherwise positive curve. I think for this reason it is also really important to measure success by the type of trading you are doing as one loss could offset a win on another trade. For instance, if you like to trade horses pre-off and have had good success but fancy trying your hand at a bit of back to lay. Switch over to Betdaq for this to keep your results separate. If you're trading anything and everything you will get confused about where your success comes from and where your failures are. Obviously this can be offset with some good record keeping but that can be a pain in the arse

As mentioned before. For me right now, I'm cautiously optimistic. My staking is relative to my bank so as long as my bank is steadily growing, I can trade with a bit more confidence.

Funnily enough, I have had a losing day today but most were down to personal mistakes that could have easily been avoided. For the first time, I have had a losing day and it hasn't bothered me emotionally. Nothing has changed and I've learned a small flaw in my trading that has now been remedied, cost me 4 quid mind you

[ruthlessimon]

it's tricky because profitable & successful are two different beasts. lets say i make £5k per annum, am i a profitable trader? yes. am i a successful trader? i'd argue no, & unless that trader has the right attitude they will seriously consider quitting. does that make the trader a failure?

opportunity x scale = success

worth a watch: https://www.youtube.com/watch?v=XBfLWqyOxhY

[Trader_Tom]

it's tricky because profitable & successful are two different beasts. lets say i make £5k per annum, am i a profitable trader? yes. am i a successful trader? i'd argue no, & unless that trader has the right attitude they will seriously consider quitting. does that make the trader a failure?

opportunity x scale = success

worth a watch: https://www.youtube.com/watch?v=XBfLWqyOxhY

Interesting video, thanks for posting it. I'd be interested to see what the successful, full time traders on this forum think to the pyramid chart above and how it compares to sports trading (I'm assuming the chart relates more to stocks etc. I'd be particularly interested in Peters opinion considering he knows both.

I understand that I may be wrong but personally I think that by the 2 year mark, providing you have been serious about it and not just "dabbling" every now and then, you should know whether or not you are successful at sports trading. I have seen a couple of people in the public spotlight who earn enough to live off after a relatively short amount of time in the markets (less than a year). I understand these guys are the exception to the rule but I try to be optimistic and find these people an inspiration rather than an expectation of my own performance within any given time frame.

I also see some very "ordinary" people who are successful traders. When I say ordinary I don't mean that in a derogatory way, I mean that they are normal people who have come from very normal walks of life. People who may not have done great at school and are flawed in some way yet they found a way to make it work for them personally. These are the people I look up to. I'd love to be a millionaire but lets be real here. If I can make enough out of the markets to be happy with my return on time invested (and hopefully I still enjoy it as much as I do now) then I will consider myself a success, regardless of how others may measure it.

As things stand right now, if I had known when I started I would be trading as well as I am now I would have been very surprised. The thing that excites me most is that while I am pleased with my trading, I still feel like I have a huge amount to learn and a lot of growing to do. Every day is a school day and seeing better and better results is an incredible drive for me to improve my knowledge and myself.

Why does every post I do end up sounding like a "my trading journey" blog? I think sometimes I talk to you guys to help figure myself out. It was only meant to be a basic question on statistics

Thanks again for the input guys.

[ruthlessimon]

The thing that excites me most is that while I am pleased with my trading, I still feel like I have a huge amount to learn and a lot of growing to do. Every day is a school day and seeing better and better results is an incredible drive for me to improve my knowledge and myself.

100% agree with that, great comment. the amount of opportunity should keep you awake at night! everyone can improve their trading, even peter

[Trader_Tom]

The thing that excites me most is that while I am pleased with my trading, I still feel like I have a huge amount to learn and a lot of growing to do. Every day is a school day and seeing better and better results is an incredible drive for me to improve my knowledge and myself.

100% agree with that, great comment. the amount of opportunity should keep you awake at night! everyone can improve their trading, even peter

Nah. He is a robot created by Betfair to convince us all to trade away all our hard earned cash He even has us striving to pay higher commission rates! Coincidence? I think not...

[Bluesky]

I understand that I may be wrong but personally I think that by the 2 year mark, providing you have been serious about it and not just "dabbling" every now and then, you should know whether or not you are successful at sports trading.

I think a big problem people have with learning to trade horse racing is getting the time to do it. Trying to trade evening races after a full day at what may well be a tiring and stressful job must be extremely difficult.

If one just tries to trade Saturdays then its probably not often enough to learn, or one is going to get grief from ones family for messing about on the computer instead of spending time with them.

When you start to think about it and put everything together you can see why it is so difficult to learn to trade, and its not surprising really that so few people can do it well over a reasonable length of time.

[Crazyskier]

I understand that I may be wrong but personally I think that by the 2 year mark, providing you have been serious about it and not just "dabbling" every now and then, you should know whether or not you are successful at sports trading.

I think a big problem people have with learning to trade horse racing is getting the time to do it. Trying to trade evening races after a full day at what may well be a tiring and stressful job must be extremely difficult.

If one just tries to trade Saturdays then its probably not often enough to learn, or one is going to get grief from ones family for messing about on the computer instead of spending time with them.

When you start to think about it and put everything together you can see why it is so difficult to learn to trade, and its not surprising really that so few people can do it well over a reasonable length of time.

Agree 100%. I'm only still trading due to the bot that still pinches me a few pounds every day. As soon as I start to manually intervene, it generally is a ticking time bomb before I go on tilt chasing losses or spam clicking in play that invariably result in substantial losses.

[newaustralian]

very Interesting post. - Yes we must learn every day. The journey of a successful trader is exciting. Once you think you "have ït" and stop considering your success as well as your failures critically your success may be shortlived. This post is a great post as it helps highlight what others are doing. We all want to be good traders and posts like this one is required Thanks to all who have contributed

[newaustralian]

This morning I have won $107.00. Over the next 30 minutes I will look at each bet, determine the risk and see if I need to change even slightly my selection method. eg Today I dutched 3 dogs - potential loss $200. Return $24.00 - it won BUT on examination it was a high risk bet given that they were box 2,4 & 5 and box 6 was a very quick starter. On the otherhand the dutching at Chelmsford City was low risk. Also the lay in running at Meydan was extremely good it was being swamped in the straight. - This is an example how I consider my bets. PS the bet that lost was a low risk bet that was wrong.

[LeTiss]

Who knows, but my guess it has decreased in recent years.

For starters, many of the PC payers buggered off. Secondly, BF get involved with markets now which seriously tinkers with the markets integrity and efficiency, making it more difficult for some small time scalpers to make money

[AReasonedView]

I think it is a tricky question to answer - there are bigger traders than me but I am in the 1% quoted above - I've traded for 10+ years now for a living and supported a family with the money made on Betfair. The big problem now for me, as suggested above, is the Premium Charge issue and the way it is structured - I have paid the top charges since Nov2015 and it is difficult to carry on - the markets I trade are not liquid enough on Betdaq to make enough money on - I'd probably be better off now by teaching others my techniques. In my opinion the Premium Charge stifles the growth of the Exchange and is one of the main reasons it has plateaued/retracted in recent years. Betfair seem more interested in becoming a more normal bookmaker with the Sportsbook - I'm still going for now but good things don't generally last forever and I appear to be reaching a critical point myself.