Trading at random

[Iron]

Maybe if it hasn't happened after all this time then it's time to accept that it wont and move on to other things? You've clearly got talents so why waste them here?

Hi H

Thanks for your kind words.

I am pretty sure that the reason I don't profit from trading isn't due to poor technique, but to poor execution, caused by psychological factors. I could give up on my quest to become more disciplined, and do something else, but the lack of discipline extends to other areas of my life, such as my dieting, so that would be unwise. Instead, what I will do is address my discipline issues more generally, and only trade above minimal stakes when I'm confident that I have a handle on that.

Jeff

[Iron]

The disaster came about because I was trying to mix trading with gambling but it just won't work - I've now accepted I'm a gambler and not a trader.

Do you make consistent profits from your gambling, if you don't mind me asking?

Jeff

[Iron]

He may find one to one tuition is the best way forward to eliminate any flaws in his approach rather than just plodding on.

Thanks for the advice, but whilst I have things to learn from others, I'm pretty sure I know where I'm going wrong. Also, I already correspond with a couple of traders who are always happy to exchange ideas with me if I need a second opinion on anything.

It's like when you see people trying to steal a tick or two by flicking bets into the market either side of the spread and then wondering why they continually have more losers.

That's an interesting one. I imagine there are two schools of thought on this, with some people thinking it's a good way of capturing value created by the market's constant Brownian motion and by getting near to the front of the queue, and other people seeing it as standing in front of a bulldozer.

It's not a technique I use, but it wouldn't surprise me if some people are able to get it to work.

Jeff

[spreadbetting]

It'd be a very simple way of making money if this Brownian motion was guaranteed to cross the spread and take our market making positions then reverse direction. Sadly the only guarantee you can expect by random market making is 100% of your losing bets will be taken.

Obviously making prices rather than taking can be profitable in certain circumstances but not as random bets.

You also need to think if you believe the market is actually going to come and take your bet why are you taking an opposing position ? If you can predict the direction the market is going to move why not go with it even short term moves if you're ticking. If you're so good you can predict the bottom/top of the market and it will come in a tick then reverse direction I'd suggest they're wasting their skills trading ticks.

Assuming you already have the spread is a dangerous assumption to make when trading.

[steven1976]

Fair play to hgodden. Probably the best and most honest advice I've ever read for pre horse markets.

In what way is that the best and most honest advice you've ever read about pre-race markets? Are you viewing in general terms as in pre-race trading should be avoided or just in Zenyatta's case that he shouldn't trade pre-race?

Because its very blunt. Its easy to advise your almost there, but if someone's been trying for 8 years and not making money its probably time to give up on that dream. The 8k is a small investment over that period of time in the grand scheme of things but if someone was to invest a further 8 years of their time with similar results then it would be a waste which they could use their time more productively outside of betfair.

[Iron]

Its easy to advise your almost there, but if someone's been trying for 8 years and not making money its probably time to give up on that dream. The 8k is a small investment over that period of time in the grand scheme of things but if someone was to invest a further 8 years of their time with similar results then it would be a waste which they could use their time more productively outside of betfair.

If I do make it, then I'm going to print out this post and frame it.

Jeff

[Iron]

It'd be a very simple way of making money if this Brownian motion was guaranteed to cross the spread and take our market making positions then reverse direction. Sadly the only guarantee you can expect by random market making is 100% of your losing bets will be taken.

Let's say that, whilst you don't know what the market will do next, you predict that it's going to remain in a range for a while. So you offer within the range, and let's say your back bet gets taken.

Two things can happen here (assuming that matters are brought to a conclusion before the race goes in-play). Either the market stays within the range and also takes out your lay offer, giving you a small profit, or it exits the range and you exit the trade with a small loss.

If it's the latter, it's not the end of the world. After all, it's widely believed that, by trading at random, you'll near as dammit break even, so you won't lose much long-term with such an approach. But if there's some objective basis for believing that the market will remain range-bound and that the market will exhibit Brownian motion within the range, then maybe you will cross the line to profitability.

Personally, I prefer to swing for the fences and go for nice trends than to adopt such an approach, but some people may be able to profit by predicting volatility and offering money within a market they think will remain range bound. You're not going to make many ticks' profit per trade, but that could be compensated by you potentially getting lots of trades through the market whilst it remains stuck within its tight range.

Jeff

[icarus121]

Jeff

You certainly put the hours in sir ,judging by your early post today.Look i agree with some of the posts on here ....that you are not far away!Living in Edinburgh like yourself i would be happy to meet for a coffee and get the heads together as two are better than one i guess!
I was despondent to hear Peter may stop training etc as over the years i have learnt alot from his posts.Without being able to attend his course ,due to the cost (my teenage daughters see to that),i find his input inspiring as im sure you do.
What im trying to say is you have to stay positive ,,,2014 could be your year ??? Its a tough nut too crack but i believe all nuts can be cracked.

Happy anyway to meet and share thoughts Jeff! Maybe we could share the cost and drop in on Peter for a coffee? I know he would be cool with that!

Yours in Trading

JD

[Zenyatta]

The disaster came about because I was trying to mix trading with gambling but it just won't work - I've now accepted I'm a gambler and not a trader.

Do you make consistent profits from your gambling, if you don't mind me asking?

Jeff

If you only look at my horse-racing gambling, I'm in the green, but its not enough to live on.

Also, as regards BetAngel trades, if I had simply done the opposite of standard trading advice, let all my trades run to completion, and actually put more money on whenever the price went against me, a -2% ROI would have been transformed into a +2% ROI !

So clearly I can pick the right horses, I just couldn't get to grips with the trading side of things.

[Iron]

I'm very doubtful that you could have made money by adding to positions that were losing money, but anything is possible.

If you were outright gambling, and knew that the horse was steaming deeper and deeper into value lay territory, that would be one thing. But if you're trading and you have a market that's moving against your position, and you take a Martingale type approach of throwing more money into the market rather than redding up, then the market may remain irrational longer than you can remain solvent!

But if the issue with your trading is execution, why not write a spreadsheet, and let it take care of opening and closing your trades?

Jeff

Also, as regards BetAngel trades, if I had simply done the opposite of standard trading advice, let all my trades run to completion, and actually put more money on whenever the price went against me, a -2% ROI would have been transformed into a +2% ROI !

So clearly I can pick the right horses, I just couldn't get to grips with the trading side of things.

[Zenyatta]

Jeff

Living in Edinburgh

JD

Edinburgh? Best damn city in the UK! Princes Street Starbucks was my betting office up there in Scotland for a few weeks. Been up there? (it's at 120 Princes Street) I've been to hundreds of Starbucks, stores around the world, this one was my favourite

[Zenyatta]

I'm very doubtful that you could have made money by adding to positions that were losing money, but anything is possible.

But you said it yourself earlier in the thread; if I actually did *worse* than chance redding up every time the price went against me, then logically, doesn't it follow that I would have done *better* than chance doing the opposite of that (i.e. adding to my position) instead?

But if the issue with your trading is execution, why not write a spreadsheet, and let it take care of opening and closing your trades?

I mucked around with Excel , but didn't know what I was doing, and like a fool I couldn't resist the temptation to keep getting involved manually. But yes, clearly I should just use automation in the future.

[icarus121]

Zenyatta

That looks like a rare day in scotland...the sun being out! I agree its a great spot for a coffee ,never traded from that spot but will think of you the next time i venture in...

[FlatBack4]

I registered to make a point.
Assuming that the markets are efficient, random betting should see you lose just the commission. I agree with that.
The point seems to have been accepted that random trading will also have this result, though the commission will of course be reduced.
I don't really go along with this because when you enter the market, you enter at a negative position. Whether it's the back price or the lay price that is deemed the 'true' figure, your random closure will surely cost you the spread?

I suppose this is open to debate depending on the definition of random, but my thinking is that traders need to beat the commission PLUS the spread, whereas punters need only worry about (admittedly higher) commission.

[spreadbetting]

Let's say that, whilst you don't know what the market will do next, you predict that it's going to remain in a range for a while. So you offer within the range, and let's say your back bet gets taken.

Two things can happen here (assuming that matters are brought to a conclusion before the race goes in-play). Either the market stays within the range and also takes out your lay offer, giving you a small profit, or it exits the range and you exit the trade with a small loss.

If it's the latter, it's not the end of the world. After all, it's widely believed that, by trading at random, you'll near as dammit break even, so you won't lose much long-term with such an approach. But if there's some objective basis for believing that the market will remain range-bound and that the market will exhibit Brownian motion within the range, then maybe you will cross the line to profitability.



Jeff

If you're predicting something it not exactly random trading tbf, plus I'd guess there are different views of random. If you're giving yourself a leg up by assuming the advantage of the spread is already yours I personally wouldn't consider it random.

To be honest Jeff, I think the fact you're reasonably intelligent but stubborn means you're making far too many assumptions, you believe to be true, and only take or seek out advice that reinforces those views for you. It's like the hundreds of blogs you see spring up for a week or so where people use discipline and an excuse why they're not winning. They conveniently ignore the fact that poor discipline usually adds just as much to their wins as their losses and their underlying strategy is the real reason they're losing.

I can see where Peter's coming from about the training. It's hardly disputable he's making a reasonable living at this but every time he puts up a view someone will want to stick in an opposing one because it's at odds with what they think rather than trying to understand exactly what he's saying and using it to their advantage.