Why Stake at 2^x?

[firlandsfarm]

I've noticed on Peter's ladder videos his default stakes are set at 16, 32, 64, 128, 256, 512 and 1024 … why are they 2^x amounts? Why not just simply something like 20, 40, 75, 150, 300, 500, 1000? Obviously the latter set of stakes are not in a doubling sequence is there a relevance there? And if so do his stakes start at 16 simply because that number is part of a doubling sequence that started at 1? Just curious and wanting to understand why.

[PDC]

I think I heard in a video once he doesn't use round numbers to 'hide' his stakes but tbh I don't think that makes any difference, if anything it actually works against him as I quite often see what I assume are his stakes or people also using his stake sizes having seen them in one of his videos.

I use a doubling system as it makes life easier as each click is a multiple of one click so helps placing and closing trades.

[Derek27]

2^x are all round numbers if you have a programming background and it's more logical. 10, 20, 50, 100 is less uniform.

[Kai]

I've noticed on Peter's ladder videos his default stakes are set at 16, 32, 64, 128, 256, 512 and 1024 … why are they 2^x amounts? Why not just simply something like 20, 40, 75, 150, 300, 500, 1000? Obviously the latter set of stakes are not in a doubling sequence is there a relevance there? And if so do his stakes start at 16 simply because that number is part of a doubling sequence that started at 1? Just curious and wanting to understand why.

Having different stake sizes ready to go makes the execution easier, depending on how you want to manage your positions and your trading style. You may want to drip your entries and your exits or split stakes to spread them out a bit etc. Traders in general have a tendency to slightly randomize their stakes to hide their activity if possible, especially on thinner markets like greyhounds or tennis where it gets much easier to spot other traders.

[firlandsfarm]

Thanks PDC, I can see the advantage of double stake options to simplify spreading your staking over a variety of prices. And you may well be right with the disguise theory, I wouldn't be sharp enough to spot it ... to me a lot of money is just a lot of money!

[firlandsfarm]

2^x are all round numbers if you have a programming background and it's more logical. 10, 20, 50, 100 is less uniform.

Yes I understand that Derek but what's the advantage of a 'more logical' progression over a 'less uniform' one and is 2^x any more logical than 20, 40, 80, 160, 320, 640, 1280?

[PDC]

I wouldn't be sharp enough to spot it ... to me a lot of money is just a lot of money!

Keep an eye on the ladder and you will see them from time to time. If you watch his videos he often places several closing orders into the market away from the current price. You can see them pop up on several prices in quick succession for example or if the market is thin you can see them on their own from time to time.

I won't say it is a very clever/smart strategy but I have been known to spot some of what I assume are Peter's exit trades and placed mine around the same point as I am sure he knows more than me about how far the price is heading.

Also if you look at your matched amounts you can see patterns, bots using the same stakes stick out a mile. In particular the annoying 1p bot owner who can be really frustrating when you hear your bets are getting matched really quickly and a lot on a runner only to realise it is the annoying 1p bot owner. Derek posted about that owner not so long back as well on a thread.

[firlandsfarm]

Having different stake sizes ready to go makes the execution easier, depending on how you want to manage your positions and your trading style. You may want to drip your entries and your exits or split stakes to spread them out a bit etc. Traders in general have a tendency to slightly randomize their stakes to hide their activity if possible, especially on thinner markets like greyhounds or tennis where it gets much easier to spot other traders.

Thanks Kai, I understand the advantages of drip feeding and having your six shots preloaded. Maybe there is an issue with randomising but if you use the same sequence all the time (and especially if you the publish that sequence on the Internet) it loses it randomness!

Maybe there was a reason for the precise sequence that has been overtaken by events. Maybe it started because when trading first started and having thought about the advantages of a doubling sequence the first sequence started at 2! As I said I was just curious!

[firlandsfarm]

Keep an eye on the ladder and you will see them from time to time. If you watch his videos he often places several closing orders into the market away from the current price. You can see them pop up on several prices in quick succession for example or if the market is thin you can see them on their own from time to time.

As I said I'm not sharp enough to spot such manoeuvrings and the amounts of money alongside the prices moves so quickly I doubt anyone could keep up ... you would effectively need to photo-memorise every amount for every price 10 ticks each side of the current price and then 1/10th of a second later perform a calculation to see by how much those amounts have increased or decreased. But even then you wouldn't know if it was a single offer to market that moved the money or a combination of two or many more offers that just happen to move the amount to the level you think you are expecting or disguise the amount you are looking for! In fact I think you could convince yourself you know who's doing what and be dangerously wrong in your assumption!

I won't say it is a very clever/smart strategy but I have been known to spot some of what I assume are Peter's exit trades and placed mine around the same point as I am sure he knows more than me about how far the price is heading.

For the reasons above I would say that's a very dangerous strategy and the more active traders in the market the more the chance that the data you are reading is fake. But I don't actively trade, I'm just researching, so could be totally wrong in my thinking!

Also if you look at your matched amounts you can see patterns, bots using the same stakes stick out a mile. In particular the annoying 1p bot owner who can be really frustrating when you hear your bets are getting matched really quickly and a lot on a runner only to realise it is the annoying 1p bot owner. Derek posted about that owner not so long back as well on a thread.

Sorry, I'm really not following that. What patterns? How does a bot using stakes of say £128, £256 etc make themselves obvious out of a market of £200k? I can see the frustration with 1p matches (that would stick out and be obvious) but why haven't Betfair closed him down, I can't believe they want all those 1p transactions but it would be somewhat ironical if he or she was using Bet Angel!!

[PDC]

As I said look at your matched amounts, you see patterns at times and if you are active enough you can spot them very quickly. The below image isn't the best example but it gives a pretty good example of what I mean. It was taken from a fairly quiet market today with not much activity, to me the way my stake was being taken seemed very much like a bot and when I see repeats of the same stake at the same price it backed up my thoughts.

Same stakes.png

I was saying the bit about following Peter's trades jokingly but I have placed exits around what I think are his at times in the past. I agree if you are looking for them near the current price they would get lost in the fog but if you look away from the current price the market is often thin and sometimes emtpy. You then see machine gun fire of £128 bets enter and you could be forgiven for putting 2 and 2 together and coming up with Peter. Rather than all of a sudden various people have all entered the market and 6 prices in a few seconds away from the current have ended up with exactly £128 more sitting at it.

If you watch this video and how he enters the stakes in some markets you can see them enter. This isn't the best example but hopefully it gives you an idea. Also if I were to come in and match his bets they would show on my matched bets as whole bets of £128. I might then think, hmmmm who do I know who uses stakes of £128. Oh there is another £128 and another and another:

https://youtu.be/wAL6DbY5NAE?t=391

The more you trade the more things like this are seen without even looking. For example have you ever driven a short distance home from somewhere and got home and thought, wow I hardly remember that drive. You have just driven and been alert to things without even thinking about it. Much like trading after a while you just see the matrix in front of you after a while. Peter I suspect sees right through it to the other side and sees things without even thinking that have been and gone before we have chance to see them.

I am not saying this is in anyway a holy grail moment but it is the kind of things you start to see when actually trading that researching will never show you. Chuck some money in an account, keep things small and start trading, your learning will pick up much more than endless research.

Have a play in some greyhound and US racing markets and you will soon start to spot the bots matching your trades and placing unmatched orders in the market - they stick out quite quickly. One way of spotting them is the sheer speed at which they are able to enter, cancel and re-enter the market when reacting to an order. They stick out like a sore thumb at times and you can then start thinking about how to exploit them to get a profit out of a market for example.

Sorry to take the thread off on a tangent.

[Kai]

That's probably an overkill for the scope of this thread and what the OP was asking, but I agree with PDC that there are all kinds of amazing things that one can do by analyzing order flow and by playing around with reverse engineering in general, don't remember that being discussed anywhere and probably for good reason. However, mostly it does require an in depth knowledge of the market mechanics, and if you have that then you're probably already sitting on all kinds of edges, so chances are that you don't need to go into such depth to get slightly more.

[PDC]

So chances are that you don't need to go into such depth to get slightly more.

Every little helps

there are all kinds of amazing things that one can do by analyzing order flow and by playing around with reverse engineering in general, don't remember that being discussed anywhere and probably for good reason.

It is usually the stuff you don't read and see that is worth 'reading' and 'seeing' if you spend time thinking about things. There are often so many clues in Peter's videos, I suspect a lot of the time on purpose that require you to spend time thinking about what he has said but also often what he didn't say.

[Derek27]

2^x are all round numbers if you have a programming background and it's more logical. 10, 20, 50, 100 is less uniform.

Yes I understand that Derek but what's the advantage of a 'more logical' progression over a 'less uniform' one and is 2^x any more logical than 20, 40, 80, 160, 320, 640, 1280?

Depends what your lowest stake is. I go as low as £8 on low-liquid/higher price horses or I might open a £64 trade and close with 16-16-16-8-8.

[firlandsfarm]

Thanks for the trouble to put together a detailed response PDC.

As I said look at your matched amounts, you see patterns at times and if you are active enough you can spot them very quickly. The below image isn't the best example but it gives a pretty good example of what I mean.

Same stakes.png

I can see the pattern in your example but seeing as I'm not using stakes anywhere near the level required to identify such patterns I will never spot them. Also and maybe I'm wrong again but it seems to me you can only identify the pattern when it's too late, after the event!

I was saying the bit about following Peter's trades jokingly but I have placed exits around what I think are his at times in the past. I agree if you are looking for them near the current price they would get lost in the fog but if you look away from the current price the market is often thin and sometimes emtpy. You then see machine gun fire of £128 bets enter and you could be forgiven for putting 2 and 2 together and coming up with Peter. Rather than all of a sudden various people have all entered the market and 6 prices in a few seconds away from the current have ended up with exactly £128 more sitting at it.

If you watch this video and how he enters the stakes in some markets you can see them enter. This isn't the best example but hopefully it gives you an idea. Also if I were to come in and match his bets they would show on my matched bets as whole bets of £128. I might then think, hmmmm who do I know who uses stakes of £128. Oh there is another £128 and another and another:

https://youtu.be/wAL6DbY5NAE?t=391

Thanks for the link but I've seen many vids of his stake placing and spreading that's why I asked the question! But I disagree that you can see constant levels of stakes being fired in within 10 ticks of current price. I have rarely seen a price that is empty within that range of the CP. And the amounts available on prices within that range often change with every refresh and by random amounts. I'm looking at the day's UK and Irish racing Win markets within 10 minutes or less of the Off. I'm sorry PDC, I'm not ungrateful but I would defy anyone to see if the amount for a price increased by £128, £130 or £125 in the markets when I have looked at them and even if they did have a brain like an i7 they couldn't tell if it was a coincidental accumulation or a single offer to the market.

For example have you ever driven a short distance home from somewhere and got home and thought, wow I hardly remember that drive.

Nope, not since the breathalyser!

I am not saying this is in anyway a holy grail moment but it is the kind of things you start to see when actually trading that researching will never show you. Chuck some money in an account, keep things small and start trading, your learning will pick up much more than endless research.

I think you are misunderstanding me ... I always have money in my account, I have kept things small (which is why I have never seen the patterns you refer to above). I don't like the dogs, the way the prices move is gambling if you have no knowledge of that market and I don't ... It's not betting nor trading! US racing is too unsociable.

You have to do research to know what to trade and gain an idea how to trade. Anyway, my motivation was just curiosity as to why the staking set was 2^x, it was not trading motivated, I have no plans to trade. It is an obvious pattern that played on my maths based mind but I couldn't see why it was so.

[firlandsfarm]

Depends what your lowest stake is. I go as low as £8 on low-liquid/higher price horses or I might open a £64 trade and close with 16-16-16-8-8.

But did you choose £8 because that was the stake you wanted, why not £10? Or did you choose it because it's a factor in the 2^x progression and £4 was lower than you wanted and £16 too high? Which came first the £8 chicken or the 2^3 egg?