Trading Out at Profit vs. Letting the Bet Run – Long-Term Edge

[globi166]

Hi all,

I’ve been analyzing in-play trading strategies and wanted to get your thoughts.

If I trade out my lay bet from 1.7 when odds reach 30 my calculations show that the long-term expected profit is roughly equal to letting the bet run fully (based on 10% edge over the selected set of odds and markets).

The benefits seem to be:

Lower risk exposure since I lock in profit early instead of risking a bigger loss if the event reverses.

A higher strike rate and maintaining my overall edge without losing value in the long run.

So, trading out at around 30 (in this example and then adjusting correctly to different set of odds etc.) should be better than straight betting due to slightly higher win percentage and reduced risk.

Does this sound correct to you? Am I missing anything important?

Thanks in advance for your insights!

[jamesedwards]

Hi all,

I’ve been analyzing in-play trading strategies and wanted to get your thoughts.

If I trade out my lay bet from 1.7 when odds reach 30 my calculations show that the long-term expected profit is roughly equal to letting the bet run fully (based on 10% edge over the selected set of odds and markets).

The benefits seem to be:

Lower risk exposure since I lock in profit early instead of risking a bigger loss if the event reverses.

A higher strike rate and maintaining my overall edge without losing value in the long run.

So, trading out at around 30 (in this example and then adjusting correctly to different set of odds etc.) should be better than straight betting due to slightly higher win percentage and reduced risk.

Does this sound correct to you? Am I missing anything important?

Thanks in advance for your insights!

It depends on two things; your value of bank control, and where your edge applies.

From a profit maximising perspective you should treat every trade individually on it's own merits and trade in or out only where you are expecting a positive expected value (+EV) from doing such. If you have +EV from your original trade, but no +EV from your exit then you will be giving back some of your profit in the long term. Consider it as a cost for reduced exposure and better bank control. Is it worth that cost to you?

Another couple of things to consider;
> If you ever end up paying Expert Fee on your profits then the more commission generated you create the less you will be charged. You're better off winning £100 across nine markets and losing £50 in one, than you would be if you won £50 across ten with no losses.
> As well as overall commission, every time you trade in or out of a market you have to beat the spread. With no edge for any individual trade then in the long term that trade will lose by the size of the average spread.

[globi166]

Do you think it makes sense to treat 3.2% (this how much i will lose if trade out insted straight bet)as the cost of "bank control" or should I try to model each exit separately to ensure I only trade out when the exit itself has +EV?

I’m trying to find the balance between consistency and micro-managing every market.
I'm not to worried about expert fee at this stage.

It just make sense even from psychological perspective seen so many trades reversed from 1.03 etc. It might be my bias as I don't have stats to back up how many bets going from 98% profit to -100% loss.

[jamesedwards]

Do you think it makes sense to treat 3.2% (this how much i will lose if trade out insted straight bet)as the cost of "bank control" or should I try to model each exit separately to ensure I only trade out when the exit itself has +EV?

I’m trying to find the balance between consistency and micro-managing every market.
I'm not to worried about expert fee at this stage.

It just make sense even from psychological perspective seen so many trades reversed from 1.03 etc. It might be my bias as I don't have stats to back up how many bets going from 98% profit to -100% loss.

Only you can answer whether the 3.2% cost is a worthwhile trade for a more consistent bank.

If you are wealthy, have a large balance and no problems depositing, then bank management is probably worth less to you.

If you are trading in the UK with draconian KYC limits and your balance is small then consistancy will be worth a hell of a lot more.

[Anbell]

Hi all,

I’ve been analyzing in-play trading strategies and wanted to get your thoughts.

If I trade out my lay bet from 1.7 when odds reach 30 my calculations show that the long-term expected profit is roughly equal to letting the bet run fully (based on 10% edge over the selected set of odds and markets).

Does this sound correct to you? Am I missing anything important?

Thanks in advance for your insights!

I'd be very careful to check whether you are cherry picking data. In your back test, how many did you lay at 1.7, backed at 30 and won?

[globi166]

Hi all,

I’ve been analyzing in-play trading strategies and wanted to get your thoughts.

If I trade out my lay bet from 1.7 when odds reach 30 my calculations show that the long-term expected profit is roughly equal to letting the bet run fully (based on 10% edge over the selected set of odds and markets).

Does this sound correct to you? Am I missing anything important?

Thanks in advance for your insights!

I'd be very careful to check whether you are cherry picking data. In your back test, how many did you lay at 1.7, backed at 30 and won?

No. It's just example my avrege odds are 1.53. Lowest odds 1.18 highest about 1.85. So far I got 75 bets, I know it's very tiny sample but I need to start somewhere.
It happens not very often, but I'm sure some people here have exact number.
Horse at short odds or tennis player losing set trades at 30 from 1.5 for example but managed to win somehow. It might be one trade in many but still missing out on big profit in this instance for tiny cut 3% of your win.

[Anbell]

You do have to start somewhere, but my best guess is that you dont have enough information yet to start making decisions like those.

[jamesedwards]

Hi all,

I’ve been analyzing in-play trading strategies and wanted to get your thoughts.

If I trade out my lay bet from 1.7 when odds reach 30 my calculations show that the long-term expected profit is roughly equal to letting the bet run fully (based on 10% edge over the selected set of odds and markets).

Does this sound correct to you? Am I missing anything important?

Thanks in advance for your insights!

I'd be very careful to check whether you are cherry picking data. In your back test, how many did you lay at 1.7, backed at 30 and won?

No. It's just example my avrege odds are 1.53. Lowest odds 1.18 highest about 1.85. So far I got 75 bets, I know it's very tiny sample but I need to start somewhere.
It happens not very often, but I'm sure some people here have exact number.
Horse at short odds or tennis player losing set trades at 30 from 1.5 for example but managed to win somehow. It might be one trade in many but still missing out on big profit in this instance for tiny cut 3% of your win.

Betfair markets are pretty near perfect. That's what makes this game so hard. Most of the time you will find the chance of an event occurring sits somewhere between the back and lay prices.

[globi166]

You do have to start somewhere, but my best guess is that you dont have enough information yet to start making decisions like those.

Fair point.

[globi166]

I'd be very careful to check whether you are cherry picking data. In your back test, how many did you lay at 1.7, backed at 30 and won?

No. It's just example my avrege odds are 1.53. Lowest odds 1.18 highest about 1.85. So far I got 75 bets, I know it's very tiny sample but I need to start somewhere.
It happens not very often, but I'm sure some people here have exact number.
Horse at short odds or tennis player losing set trades at 30 from 1.5 for example but managed to win somehow. It might be one trade in many but still missing out on big profit in this instance for tiny cut 3% of your win.

Betfair markets are pretty near perfect. That's what makes this game so hard. Most of the time you will find the chance of an event occurring sits somewhere between the back and lay prices.

Are you sure ? I watched and traded horse race a while ago that fav was priced at 1.08. As the race started, horse went to a slow start, half way later he pulled up and didn't finish the race.
I got many examples like that.
By no means I'm saying BF odds are not efficient but they efficient of avrege.
At least that what I got from Peter videos.

[jamesedwards]

No. It's just example my avrege odds are 1.53. Lowest odds 1.18 highest about 1.85. So far I got 75 bets, I know it's very tiny sample but I need to start somewhere.
It happens not very often, but I'm sure some people here have exact number.
Horse at short odds or tennis player losing set trades at 30 from 1.5 for example but managed to win somehow. It might be one trade in many but still missing out on big profit in this instance for tiny cut 3% of your win.

Betfair markets are pretty near perfect. That's what makes this game so hard. Most of the time you will find the chance of an event occurring sits somewhere between the back and lay prices.

Are you sure ? I watched and traded horse race a while ago that fav was priced at 1.08. As the race started, horse went to a slow start, half way later he pulled up and didn't finish the race.
I got many examples like that.
By no means I'm saying BF odds are not efficient but they efficient of avrege.
At least that what I got from Peter videos.

Finding these and exploiting them is the key to profitability. They are hard to find consistently.

[globi166]

I understand. Just wonder what you mean "they hard to find consistently " ? Any chance for some numbers? Just to give us the idea.

[jamesedwards]

I understand. Just wonder what you mean "they hard to find consistently " ? Any chance for some numbers? Just to give us the idea.

Sorry I have no idea. But if there were that plentiful then everyone would be rich.

[globi166]

I understand. Just wonder what you mean "they hard to find consistently " ? Any chance for some numbers? Just to give us the idea.

Sorry I have no idea. But if there were that plentiful then everyone would be rich.

I think often people would lose anyway. Chasing loses, betting on hopes, believing in odd systems, wrong bank management methods, preferring to bet on favorite team or some tipster story... etc.
Rationality in betting world is scarce not the opportunity or misprinted markets. One hopes lol

[ShaunWhite]

Are you sure ? I watched and traded horse race a while ago that fav was priced at 1.08. As the race started, horse went to a slow start, half way later he pulled up and didn't finish the race.
I got many examples like that.

A 1.08 horse still loses 7% of the time so it doesn't necessarily mean the price was overestimated.

But although its a fair assumption that a horse at 2.0 wins 50% of the time, quoted prices are the centre of a range of probabilities. It's might be that half the time it runs like a 2.0 horse, but there's a small chance it will run like a 1.9 or 2.1 horse, a smaller chance again that it's 1.8 or 2.2. It's this distribution of probabilities that makes it possible for outsiders to win, and for hot horses to lose.

A chart makes it easier to see. The grey area represents the chance of the outsider beating the favourite. One needs to overperform while others are underperforming. And the width of the distribution varies, some horse usually run 'to form' and others have a wide variety of outcomes so might often run exceptionally well or exceptionally badly. The overlaps are the important feature, not just their raw price.

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