Personal Journey - discovering WHY many strategies don't work

[Fugazi]

So I have been thinking about a thread that is a bit of a personal journey, but offers something different that people will find worth engaging with and reading.

My plan is to post adhoc about basic strategies I have failed with, and a hypothesis as to WHY I think this is. I think I will start very simple and perhaps delve into more complex strategies and nuances as I progress.

Idea 1:

Filling gaps in the ladder.

Where I would see a gap in the ladder, I would put a £1 bet in that spot.

Original hypothesis: I will be the first to get a match at that price, and therefore should have time to scalp before the price moves

Hypothesis why it didn't work:

The price ploughs through to the next price where there is more money available to match.

[Derek27]

So I have been thinking about a thread that is a bit of a personal journey, but offers something different that people will find worth engaging with and reading.

My plan is to post adhoc about basic strategies I have failed with, and a hypothesis as to WHY I think this is. I think I will start very simple and perhaps delve into more complex strategies and nuances as I progress.

Idea 1:

Filling gaps in the ladder.

Where I would see a gap in the ladder, I would put a £1 bet in that spot.

Original hypothesis: I will be the first to get a match at that price, and therefore should have time to scalp before the price moves

Hypothesis why it didn't work:

The price ploughs through to the next price where there is more money available to match.

I'm not a regular horse racing trader anymore, but that strategy wouldn't be suitable for volatile markets where the price jumps around. And it's not necessarily gaps you need to look for, perhaps 2-figure sums in between 4-figure sums, so you're money is near the front of the queue but there's plenty of money at the neighbouring price that needs to be eaten. Ideally, you want people to add money behind yours so you've got a 3-4 figure sum with yours at the front.

[Fugazi]

So I have been thinking about a thread that is a bit of a personal journey, but offers something different that people will find worth engaging with and reading.

My plan is to post adhoc about basic strategies I have failed with, and a hypothesis as to WHY I think this is. I think I will start very simple and perhaps delve into more complex strategies and nuances as I progress.

Idea 1:

Filling gaps in the ladder.

Where I would see a gap in the ladder, I would put a £1 bet in that spot.

Original hypothesis: I will be the first to get a match at that price, and therefore should have time to scalp before the price moves

Hypothesis why it didn't work:

The price ploughs through to the next price where there is more money available to match.

I'm not a regular horse racing trader anymore, but that strategy wouldn't be suitable for volatile markets where the price jumps around. And it's not necessarily gaps you need to look for, perhaps 2-figure sums in between 4-figure sums, so you're money is near the front of the queue but there's plenty of money at the neighbouring price that needs to be eaten. Ideally, you want people to add money behind yours so you've got a 3-4 figure sum with yours at the front.

Tried that also and failed.

What I think went wrong was that I was not vigilant enough when those sums changed as the price got closer to them.

Possibly an avenue to explore with automation with careful criteria, theres a whole bunch of conditions to include in the setup. Probably needs including whether the horse is rapidly shortening / drifting as a reason not to fire the bet.

[LinusP]

Hypothesis why it didn't work:

The price ploughs through to the next price where there is more money available to match.

No, it’s adverse selection, you are getting matched when your price is wrong i.e. not value.

[Fugazi]

Hypothesis why it didn't work:

The price ploughs through to the next price where there is more money available to match.

No, it’s adverse selection, you are getting matched when your price is wrong i.e. not value.

Well yes, you could chose that as the answer to the majority of failed methods

[firlandsfarm]

Have you read Goat's thread of "Trading what I see"? viewtopic.php?f=5&t=21616&hilit=goat

[Anbell]

So I have been thinking about a thread that is a bit of a personal journey, but offers something different that people will find worth engaging with and reading.

My plan is to post adhoc about basic strategies I have failed with, and a hypothesis as to WHY I think this is. I think I will start very simple and perhaps delve into more complex strategies and nuances as I progress.

Idea 1:

Filling gaps in the ladder.

Where I would see a gap in the ladder, I would put a £1 bet in that spot.

Original hypothesis: I will be the first to get a match at that price, and therefore should have time to scalp before the price moves

Hypothesis why it didn't work:

The price ploughs through to the next price where there is more money available to match.

How many times did you try it?

[Archery1969]

So I have been thinking about a thread that is a bit of a personal journey, but offers something different that people will find worth engaging with and reading.

My plan is to post adhoc about basic strategies I have failed with, and a hypothesis as to WHY I think this is. I think I will start very simple and perhaps delve into more complex strategies and nuances as I progress.

Idea 1:

Filling gaps in the ladder.

Where I would see a gap in the ladder, I would put a £1 bet in that spot.

Original hypothesis: I will be the first to get a match at that price, and therefore should have time to scalp before the price moves

Hypothesis why it didn't work:

The price ploughs through to the next price where there is more money available to match.

One think to note is that I wouldn’t be trying that in low liquidity markets like greyhounds otherwise you will become poor very quickly.

[Kai]

Excellent thread idea OP. I don't say this lightly, I call things as I see it, based on merit.

Good input already from Linus and others

If you're taking suggestions a small one would be to maybe include a main question along with the hypothesis.

For example, one of the main questions here could be why are there gaps in the first place etc

[wearthefoxhat]

Idea 1:

Filling gaps in the ladder.

Where I would see a gap in the ladder, I would put a £1 bet in that spot.

Original hypothesis: I will be the first to get a match at that price, and therefore should have time to scalp before the price moves

Hypothesis why it didn't work:

The price ploughs through to the next price where there is more money available to match.

A simple tweak could give you a better chance.

Choose a spot 4/5 ticks (if a gap even better) either side (input stake in both sides) and let the market come to your trade. The closer it gets to your trade, in either direction, then enter a trade the tick before your position as the money flow reduces. That way, you increase the chance of a winning trade if momentum and direction continues, because your first trade was already in the market, ahead of the queue.

You can also use the PIQ (price in queue) option to see how far down it is before it gets matched.

Don't tell anyone....

[Euler]

So I have been thinking about a thread that is a bit of a personal journey, but offers something different that people will find worth engaging with and reading.

My plan is to post adhoc about basic strategies I have failed with, and a hypothesis as to WHY I think this is. I think I will start very simple and perhaps delve into more complex strategies and nuances as I progress.

Idea 1:

Filling gaps in the ladder.

Where I would see a gap in the ladder, I would put a £1 bet in that spot.

Original hypothesis: I will be the first to get a match at that price, and therefore should have time to scalp before the price moves

Hypothesis why it didn't work:

The price ploughs through to the next price where there is more money available to match.

That's quite a one dimensional strategy. More of a tactic than a strategy.

If you put that into different markets, you will get different results. If you enter at 10 minutes, or 2 minutes. You will get different results.

It sounds like you are applying a strategy without any other aspects to it. So it will fail.

[Bobajob]

So I have been thinking about a thread that is a bit of a personal journey, but offers something different that people will find worth engaging with and reading.

My plan is to post adhoc about basic strategies I have failed with, and a hypothesis as to WHY I think this is. I think I will start very simple and perhaps delve into more complex strategies and nuances as I progress.

Idea 1:

Filling gaps in the ladder.

Where I would see a gap in the ladder, I would put a £1 bet in that spot.

Original hypothesis: I will be the first to get a match at that price, and therefore should have time to scalp before the price moves

Hypothesis why it didn't work:

The price ploughs through to the next price where there is more money available to match.

That's quite a one dimensional strategy. More of a tactic than a strategy.

If you put that into different markets, you will get different results. If you enter at 10 minutes, or 2 minutes. You will get different results.

It sounds like you are applying a strategy without any other aspects to it. So it will fail.

I would say more of an 'idea'

Takes a lot of finesse to convert an 'idea' into a strategy.
I guess the benefit of this thread is that it might stop you wasting a 'sh*t' load of time trying to convert an 'idea' into a 'profitable' strategy

[Fugazi]

Have you read Goat's thread of "Trading what I see"? viewtopic.php?f=5&t=21616&hilit=goat

Yep, not completed it yet but gave me the inspiration to try reinvent the wheel and come up with discussion not already in there

How many times did you try it?

Not anywhere near as many times as I would to confirm a winning strategy. Self preservation though to decide quickly when a strategy doesn't work

One think to note is that I wouldn’t be trying that in low liquidity markets like greyhounds otherwise you will become poor very quickly.

Yep, came to that realisation rather quickly!

Excellent thread idea OP. I don't say this lightly, I call things as I see it, based on merit.

Good input already from Linus and others

If you're taking suggestions a small one would be to maybe include a main question along with the hypothesis.

For example, one of the main questions here could be why are there gaps in the first place etc

Noted, will do. Thank you.

A simple tweak could give you a better chance.

Choose a spot 4/5 ticks (if a gap even better) either side (input stake in both sides) and let the market come to your trade. The closer it gets to your trade, in either direction, then enter a trade the tick before your position as the money flow reduces. That way, you increase the chance of a winning trade if momentum and direction continues, because your first trade was already in the market, ahead of the queue.

You can also use the PIQ (price in queue) option to see how far down it is before it gets matched.

Don't tell anyone....

Took me a while to visualize this. Will have a mess with it tonight

That's quite a one dimensional strategy. More of a tactic than a strategy.

If you put that into different markets, you will get different results. If you enter at 10 minutes, or 2 minutes. You will get different results.

It sounds like you are applying a strategy without any other aspects to it. So it will fail.

Of course once the initial attempt didn't work I did start playing around with various settings / markets but came to the same conclusion. Was aiming for brevity in the post with a simple discussion point to begin with.

I guess the benefit of this thread is that it might stop you wasting a 'sh*t' load of time trying to convert an 'idea' into a 'profitable' strategy

Exactly this. Partly why I started with such a basic idea/strategy. Don't need to go into war and peace of every iteration of it and 6 months of work to discover the fundamental idea is flawed[/quote]

[Fugazi]

How far above BSP to be sure you're making profit?

I've been analysing another failed method of mine (small sample, 30 bets). I have found that on cross referencing BSP and the odds I backed at, I seem to be above BSP 80% of the time!

so for example I back at 2.28 - BSP was 2.24

I know there is no strict answer, but I wonder when you consider commission and BSP not always being the true value, what people think a rough ballpark would be to profit long term? Also, I need to check the times I was under value, if these are wildly more under value than the times I got over value. I suspect this will be the most likely finding in a bigger sample.

[Anbell]

How far above BSP to be sure you're making profit?

I've been analysing another failed method of mine (small sample, 30 bets). I have found that on cross referencing BSP and the odds I backed at, I seem to be above BSP 80% of the time!

so for example I back at 2.28 - BSP was 2.24

I know there is no strict answer, but I wonder when you consider commission and BSP not always being the true value, what people think a rough ballpark would be to profit long term? Also, I need to check the times I was under value, if these are wildly more under value than the times I got over value. I suspect this will be the most likely finding in a bigger sample.

Beating BSP is a very good starting point. I doubt that any of us can beat it 80% of the time over a reasonable sample.

You also need to consider the entire equation: 80% * (size of beat) + 20% * (size of miss)

As you are a beginner, if you're beating BSP by 80% you should get out of your trades at BSP and minimize your commission. It'd be very difficult to blow a bank while you learn.