Blew over half my bank last weekend - need advice!

[Alexander_99]

Re Boring game 'value'. The value you're exploiting in that case is the likelihood of a goal vs the amount the odds will decay per min. If you think there's a 10% chance of there being a goal in the next 20mins and the risk/reward (ie cost/profit of being right or being wrong) is > 10% then it's a good trade. By understanding how odds decay and how they move after a goal (try looking at Soccer Mystic) you can pretty accurately determine what the price will be if there are no goals or a goal for either team at any time in the future.

Remember that unlike a bet you aren't playing to the whistle. You're looking at what profit or loss is available over the short term as well as the long term. If a player has a bad injury and is on the ground for 5 mins it's perfectly possible to steal a tick or two without the ball being kicked as the odds tick inexorably towards 1000 or 1.01.

You mention trading late to reduce the risk of something happening, well is the last 5mins any less action packed than the first 5 mins, or from 40-45? You're trading a 5 min decay, doesn't really matter when that 5 mins is.

I mention trading late not to "reduce the risk of something happening", but rather to be able to have potentially much larger profits for the same liability. Say I lay the draw on 85 min at 1.2 odds or I lay the draw on 50 min at 1.9 odds, for the same liability. I stand to win much larger amount in the first case - of course the drawback being I have only 5 mins (plus injury time to get that win...)


You say it "doesnt matter when that 5 mins is". Well, the odds decay must faster towards the end of the game, so isn't this also the added advantage if you are going to trade on "trends"? I'd say you can get many more ticks in those 5 mins late in the game, rather than in the early stages!

[Kai]

My prematch analysis made me pretty certain that Zaragoza were going to win their game

Maybe you're putting too much faith in prematch analysis, forming strong opinions before the match even starts can cloud your objective judgement, not to mention you're exposing yourself to confirmation bias as well. If there is a strong and obvious bias somewhere in the match then chances are that this will already be implemented in the pricing of this match. Most traders that I know like to keep an open mind and only trade what they see is happening, not what they think is going to happen.

Value aside, do you frame your trades? By clearly defining your risk and reward along with the window of opportunity?

Take this random situation as an example, in a pretty even game one team scores relatively early and their price drops to 1.50ish, which then sparks a dominant period from the other team that is looking for the equalizer and you lay the leading team around 1.50. As an exercise you can try and work out how much you would lose if they score again for 2-0 versus how much you'd win if it goes to 1-1, and have a look at much time you have before the price starts moving against you if nothing happens. Sometimes you can find a semi free trade for an extended period of time or gain several ticks soon as you open a position, which buys more time before you start losing ticks to decay etc. So in a nutshell in this random situation you don't need to wait for all of the stars to align to catch a big swing, you'd have to catch the equalizing goal, which would arguably be the most likely outcome during this dominant period of the trailing team. I'd suggest to not overthink it too much and to keep your trades very simple at the start, with the main aim in general being that you try and position yourself on the side of minimum risk and maximum reward etc.

Have a look at how Peter framed this trade recently, can learn a lot from that clip : https://www.youtube.com/watch?v=KIdHnjxNWb0&t=2s

Well, the odds decay must faster towards the end of the game, so isn't this also the added advantage if you are going to trade on "trends"? I'd say you can get many more ticks in those 5 mins late in the game, rather than in the early stages!

I don't count normal decay as a trend, late in the game you'd have to risk practically your whole stake to take advantage of decay, the swings are absolutely massive in case of an important goal. There's a lot of depth to it and it's difficult to discuss it textually, yeah the decay depends on the time remaining in the game but the speed of the decay also depends on the price range and the tick increment, it will move extremely slow at a certain range and very fast at another. It also doesn't always move mechanically tick by tick but in wave like patterns with periods of stability and even volatility and pullbacks, plus if the market knows that there is obvious value somewhere then it can greatly accelerate the decay or drastically slow it down and so on.

Hope that helps a bit.

[ShaunWhite]

Kai's comments need to be taken onboard.

Say I lay the draw on 85 min at 1.2 odds or I lay the draw on 50 min at 1.9 odds, for the same liability. I stand to win much larger amount in the first case - of course the drawback being I have only 5 mins (plus injury time to get that win...)

You're still thinking like a punter rather than a trader. If you lay at say 1.2 @ 85mins you're just taking a price that's been offered by a room full of PhDs and nerds in huge syndicates. That price you see will be as close to 'correct' as you're ever likely to find and more accurate than you'll ever judge it. Over 1000s of trades you'll breakeven (aka lose commission). If it's not the right price, then another room full of PhDs and nerds in a huge syndicate will buy up every penny in a couple of milliseconds. You're not going to beat the market by watching 5 simultaneous games and betting on a hunch.

What these smart people can't do is stop the price changing over time because that's a fundamental mechanism of the market. So trading is about using that price volatility & movement to make money, not necessarily by judging the validity of the actual odds at fixed points in time.

Well, the odds decay must faster towards the end of the game,

That's not always the case. Try not to fall into the trap of convincing yourself you're right when it's unsubstantiated. Quite often there are value trades to be had by opposing what Joe Public assumes is the case. But when you study the data, the opposite can be the case.

But the big risk you have trading late is losing all of your stake. That's a big deal because Stake is NOT the same as Liability. With a £500 bank you could be staking £100 or even more, because you would frame your trade so that the maximum downside would still be be £10 but the upside could be 10x more than it would be staking £10.

It's quite a conceptual leap from straight betting to trading, the examples might not relate directly to all markets and style of trade but you'll soon start to think about framing trades rather than having value bets. There's 100s of ways to trade football though, the key thing about all trading is never losing all of your stake, the key thing about betting is that you always do. So that means traders can use much larger stakes while still protecting their banks.

[Alexander_99]

My prematch analysis made me pretty certain that Zaragoza were going to win their game

Maybe you're putting too much faith in prematch analysis

Not really, I always keep an open mind and happy to change my opinion as much as needed throughout the match. I should have more correctly said "prematch analysis and watching the first 30 mins made me pretty certain that Zaragoza were going to win comfortably".

Value aside, do you frame your trades? By clearly defining your risk and reward along with the window of opportunity?

Take this random situation as an example, in a pretty even game one team scores relatively early and their price drops to 1.50ish, which then sparks a dominant period from the other team that is looking for the equalizer and you lay the leading team around 1.50. As an exercise you can try and work out how much you would lose if they score again for 2-0 versus how much you'd win if it goes to 1-1, and have a look at much time you have before the price starts moving against you if nothing happens. Sometimes you can find a semi free trade for an extended period of time or gain several ticks soon as you open a position, which buys more time before you start losing ticks to decay etc. So in a nutshell in this random situation you don't need to wait for all of the stars to align to catch a big swing, you'd have to catch the equalizing goal, which would arguably be the most likely outcome during this dominant period of the trailing team.

Thanks for this comment Kai...sure, I have noticed that in the first half the match odds (for the leading team at least) usually tend to stay pretty stable and barely decay. But I have not really thought about it as a potential trading opportunity, possibly because I have put all my focus into trading late in the game.

Yeah I rarely frame my trades for the same reason - getting on the market late in the game (after 80 min usually).

If the team goes two or 3 goals up early, then I'd watch the match for a while and then decide if I should lay the team or not. I'd usually let my bet run till the end - because if I didn't see value, I wouldn't bother entering the market in the 1st place. However, I would certainly trade out early if I later come to conclusion that the losing team is very unlikely to get back in the game.

[Alexander_99]

You're still thinking like a punter rather than a trader. If you lay at say 1.2 @ 85mins you're just taking a price that's been offered by a room full of PhDs and nerds in huge syndicates. That price you see will be as close to 'correct' as you're ever likely to find and more accurate than you'll ever judge it. Over 1000s of trades you'll breakeven (aka lose commission). If it's not the right price, then another room full of PhDs and nerds in a huge syndicate will buy up every penny in a couple of milliseconds. You're not going to beat the market by watching 5 simultaneous games and betting on a hunch.

What these smart people can't do is stop the price changing over time because that's a fundamental mechanism of the market. So trading is about using that price volatility & movement to make money, not necessarily by judging the validity of the actual odds at fixed points in time.

Funny you mention that. Sometime ago I interviewed for a quant position in a low latency sport betting hedge fund. According to the quant (definitely nerd like in appearence )who interviewed me, most of opportunities for trading have been taken out of major leagues. (I assume he meant pre-kick of trading), and that nowdays the value is usually found in lower leagues. His team were planning to move on to tennis trading and he asked me if I have any experience in tennis modelling/trading. I didn't. He didn't either...

What really surprised me was the size of historical data they backtested strategies on. One of the questions he asked me was about testing statistical models on 100,000 games (or maybe it was even 400,000, I don't quite recall, but whatever it was, the number was an order of magnitude bigger than I thought).

Anyway, when I said "lay at 1.20 on 85 mins", I didn't mean just any old team - I meant laying if I deem these odds value.

Which brings me onto a question. Am I right in assuming that the starting prices offered on the exchange are in most part governed by quant models from Betfair (and other exchanges) and bookmakers, and the individual punters / traders (even those who put in large stakes) only influence the odds by only a few ticks?

More importantly, are the INPLAY odds also majorly driven by pre-existing quant models which cannot be radically updated during the match? And traders (even with big stakes like Psychoff) are unable to RADICALLY "correct" odds that appear to be out of line at a given moment in time?

I.e. suppose a team's starting price is 1.4. They score and the odds drop to 1.1. Then later in the game the losing teams starts performing much better, to the point that to it's pretty much impossible to distinguish which team was deemed to be the favourite initially. In fact, you'd price the leading team (at that point in the game) at 1.3 rather than 1.1. Then you could say that laying at 1.1 is value. And then suppose some "huge syndicate", or Psychoff, notice that these odds are value, and they put large lay stakes. The price would readjust... but surely it would readjust only by a few ticks (say to 1.15), and hence 1.15 would still be value? I mean I have never seen a very large correction in price...

[jimibt]

What really surprised me was the size of historical data they backtested strategies on. One of the questions he asked me was about testing statistical models on 100,000 games (or maybe it was even 400,000, I don't quite recall, but whatever it was, the number was an order of magnitude bigger than I thought).

i tell you, what ALWAYS surprises me (if using BF data) is that no matter what strategy you backtest, if you use their BSP, you will seldom (if ever) repeat the experience in the real world. don't ask me why this is, but i see it across almost every sport. in short, i now use BSP as a very loose indicator and use realtime cached data to validate (or deny) the BSP data from BF.

It's a weird and wonderful world out there and there are plenty of rabbit holes to skip or dip!"!

[Alexander_99]

But the big risk you have trading late is losing all of your stake. That's a big deal because Stake is NOT the same as Liability. With a £500 bank you could be staking £100 or even more, because you would frame your trade so that the maximum downside would still be be £10 but the upside could be 10x more than it would be staking £10.

I don't really understand where you are going with this? If I have say £500 bank, my stake could be potentially as large as £1000 (If I lay at 1.01) yet I would still only have £10 liability. So I would lose maximum £10 (assuming I choose 2% liability per trade).

[Kai]

If you edit your posts after others have posted, there's a good chance that they'll miss the edited parts and all your questions

Am I right in assuming that the starting prices offered on the exchange are in most part governed by quant models from Betfair (and other exchanges) and bookmakers, and the individual punters / traders (even those who put in large stakes) only influence the odds by only a few ticks?

More importantly, are the INPLAY odds also majorly driven by pre-existing quant models which cannot be radically updated during the match? And traders (even with big stakes like Psychoff) are unable to RADICALLY "correct" odds that appear to be out of line at a given moment in time?

I.e. suppose a team's starting price is 1.4. They score and the odds drop to 1.1. Then later in the game the losing teams starts performing much better, to the point that to it's pretty much impossible to distinguish which team was deemed to be the favourite initially. In fact, you'd price the leading team (at that point in the game) at 1.3 rather than 1.1. Then you could say that laying at 1.1 is value. And then suppose some "huge syndicate", or Psychoff, notice that these odds are value, and they put large lay stakes. The price would readjust... but surely it would readjust only by a few ticks (say to 1.15), and hence 1.15 would still be value? I mean I have never seen a very large correction in price...

I think you're starting to see the bigger picture, no matter what you're doing your only real job is to make sure that all of your bets and trades have +EV, sounds simple but I don't think it's possible to do it consistently on a high level without a crap ton of practice.

Everyone has their own opinion, I've expressed some of my own on occasion and I've had these types of discussions plenty of times before, sometimes on this forum as well so if you don't mind I'll just link a post or two instead of repeating myself regarding this topic.

viewtopic.php?p=192944#p192944

viewtopic.php?p=198800#p198800

I guess my own opinion comes from looking at how various football traders work, I think it's important to understand how and why others trade the way they do, and of course it's impossible not to form any opinions after manually trading 10k football markets overall but I think you can learn a lot more if you also use the experiences of other traders to supplement and nurture your own. I'm all for narrow specialization of course, but how can one know what exactly to specialize without understanding the full depth of the market and all of the opportunities? I personally think that people may be selling themselves short if they specialize too early, but alas, that topic is probably beyond the scope of this thread

One of your questions can be directly answered by Rebelo who experimented with a goal alert service a few months back, the strong value that he found in some matches was completely squeezed out by his numerous followers within minutes of posting, so he had no choice but to abandon the experiment, because some of them desperately kept jumping at the opportunity at terrible prices which obviously killed the whole concept of goal alerts.

It's a great idea to learn from the likes of Psychoff but it's probably best to avoid being too much of a copycat, if someone really wanted to they could reverse engineer quite a bit of his edge since he posted about it regularly, if you analyzed his goal alert matches and compared the prices at the time etc you could probably work everything out, it's much easier finding something of value when you know exactly where to look instead of searching for it blindly, which is why I've done similar things in the past, but you shouldn't forget to analyze your own trading, especially when you lose half your bank in one weekend, the market was obviously trying to tell you something so I hope you were listening

[ShaunWhite]

But the big risk you have trading late is losing all of your stake. That's a big deal because Stake is NOT the same as Liability. With a £500 bank you could be staking £100 or even more, because you would frame your trade so that the maximum downside would still be be £10 but the upside could be 10x more than it would be staking £10.

I don't really understand where you are going with this? If I have say £500 bank, my stake could be potentially as large as £1000 (If I lay at 1.01) yet I would still only have £10 liability. So I would lose maximum £10 (assuming I choose 2% liability per trade).

I'm guessing you didn't get the quant job.... I'm talking about exposure vs risk. With a £500 bank you could have a £250 back bet (exposure) and only risk £10. Or you could have a lay bet at 1.1 with a stake of £2,500 (exposure = £250) and risk only £10.
It's how you frame your exit that determines your risk, your exposure could be your whole bank if you were crazy enough and could always guarentee you could exit (no tech issues and enough money at the price you want)

My attempt to simplify the terminology probably explains your confusion. By 'stake' I meant the money you put on the table and by 'liability' I meant the money you could lose.

[ShaunWhite]

You shouldn't worry yourself too much about quants. Quants use algorithms that apply generally at large scale eg over 400000 games. Discretionary traders look at the individual matches. A quant won't submit a large trade because TeamA look handy for 20mins.

As for who 'sets' the prices, it's everyone, the hive mind. It's supply and demand economics 101 like any other commodity.

You also still seem to be obsessing about value in the moment rather than value as a function of time. Who cares if a team is 1.1 or 8.7 it's where the price will be in the future for any given scenario that's important, and the likelihood of each of those scenarios within a given time-frame.

By the way who did you interview for? What was the role?

[Alexander_99]

I think you're starting to see the bigger picture, no matter what you're doing your only real job is to make sure that all of your bets and trades have +EV, sounds simple but I don't think it's possible to do it consistently on a high level without a crap ton of practice.


It's a great idea to learn from the likes of Psychoff but it's probably best to avoid being too much of a copycat, if someone really wanted to they could reverse engineer quite a bit of his edge since he posted about it regularly, if you analyzed his goal alert matches and compared the prices at the time etc you could probably work everything out, it's much easier finding something of value when you know exactly where to look instead of searching for it blindly, which is why I've done similar things in the past, but you shouldn't forget to analyze your own trading, especially when you lose half your bank in one weekend, the market was obviously trying to tell you something so I hope you were listening

Well, I knew about +EV from the start, I thought I made it clear in my opening post when I mentioned value. Never ever did I imply anywhere that I was just looking at a bunch of games and placing totally random bets, so whenever I gave examples like laying at 1.2 on 85 min, I always meant if I sense some value there. Sorry If I didn't make this clear earlier.

But as you say, it can be very hard to spot value in subtle situations. So all of those other 50 bets I did at the weekend...I thought value "might" / might not be there. I coudln't tell either way. At this stage it's still all kinda experimental. A part of the reason why I am watching so many games at once is so I could learn how to compare and contrast the action with the available odds, in order to improve...so why the hell not place a bet if you think it might pay off?

If anything, losing a chunk of my bank also showed me what other "subtle signs" to look for in closing stages of one match to determine that a late goal is not that likely to arrive, compared to some other match going on at the same time.

[Alexander_99]

I'm talking about exposure vs risk. With a £500 bank you could have a £250 back bet (exposure) and only risk £10. Or you could have a lay bet at 1.1 with a stake of £2,500 (exposure = £250) and risk only £10.
It's how you frame your exit that determines your risk, your exposure could be your whole bank if you were crazy enough and could always guarentee you could exit (no tech issues and enough money at the price you want)

Ok now it's clear what you wanted to say. I already wondered if you actually meant "exposure" in your previous post.

[Alexander_99]

You shouldn't worry yourself too much about quants. Quants use algorithms that apply generally at large scale eg over 400000 games. Discretionary traders look at the individual matches.

You also still seem to be obsessing about value in the moment rather than value as a function of time. Who cares if a team is 1.1 or 8.7 it's where the price will be in the future for any given scenario that's important, and the likelihood of each of those scenarios within a given time-frame.

By the way who did you interview for? What was the role?

I interviewed for a "quant" role at one of companies in London. But it wasn't quiet as straightforward as that. I am a PhD myself. However the vast majority of hedge funds / prop trading companies / sports betting companies, when they are recruiting "quants", they are looking for someone with a very specific background mostly in statistics / machine learning / big data, and preferably work experience, and they get inundated with applicants with precisely such background. So if you have a PhD in some arcane area of theoretical physics or maths that is completely irrelevant to the world of finance or sports betting, you will have difficulties getting in.

I actually initially applied for a pure "trader" position. Then I got a phone call from them saying that they were not looking for a quant at the time, but only in around 6 months or so. They saw "PhD" on my CV so obviously thought "this guy is overqualified for a trader position". And they'd be right from my view, because as a trader I'd be seriously underpaid; junior trader roles at sports betting funds are only around £30,000 per year (or even less), while junior quant roles are anywhere from £40,000-£60,000.

I explained during my phone call that despite my mathematical PhD, I may not have the "right" background in statistics / computation for a quant position, so that's why I applied for a "trader". So I ended up interviewing for a hybrid trader/quant, their intention was to give me a trader position for 6 months and then switch me to the quant position once I picked up more experience.

The interview itself went well, but a week later I got the email "while you are clearly very intelligent, and have the same interests as us, we simply cannot find a right fit for you at this time".

Probably a good thing. If I got the job, I'd be ruining my health for 6 months watching / trading tennis in the early hours of night broadcast from the other side of the planet. They explicitly asked me if I am ok coming into the office at antisocial / night hours.

[Jukebox]

Probably a good thing. If I got the job, I'd be ruining my health for 6 months watching / trading tennis in the early hours of night broadcast from the other side of the planet. They explicitly asked me if I am ok coming into the office at antisocial / night hours.

but at least it might have been over half their bank that got blown instead of yours.

[jimibt]

@Alexander_99 - i seem to recall someone talking about applying for such a position last year. was that yourself under a different username (@Speculator_3)??

it was a very similar scenario...