As requested, I have finally got round to writing up my views on manipulation.
I decided to open this discussion in a new thread as the thread that was recommended to post into was last updated 18 months ago and I believe the manipulation that I see started heavily after that period after the 60% PC was introduced and therefore thought it would not be right to continue on that thread.
In addition I see many times people discussing manipulation in the forum but Ive never seen any clear details as to what people see as manipulation and for new readers of the forum it may be a little hard to understand/spot. Therefore I thought it would be good to actually openly discuss the types of manipulation people see, rather than just say the markets are being manipulated.
I will start by touching on a couple of types of manipulation I see, which appear quite obvious and then move on to what I see and disagree with in the markets. Don’t get me wrong, I don’t mind people manipulating markets if they are willing to use large amounts of money to influence opinion as long as it’s risked on the same level playing field, which I don’t believe it is. My experiences are mainly on pre-race horse racing but I also feel similar manipulation happens on pre-trading football and also in-play cricket.
Types of Manipulation to kick start things
The Berlin wall
The most obvious types of manipulation is when someone puts a large wall of money against the market. Let’s say for example a trader has just had 1000 pounds matched and no new support comes behind them, then they may just build up a wall of money behind them to try and get support from other traders or simply have people pull their orders on the opposite side of the ladder in fear of all the money that just arrived on the opposite side of the market.
This type of manipulation is quite easy to see in general and I have no problem with as they are putting the risk in the market. Most people will just see this as trading which I agree but manipulation in its simplest form is a way of changing views/opinions on what is happening at that moment I would say?
Knocking down Wall
This is basically the reverse of the above when a big wall has been built to protect a position and then all of a sudden it disappears and the money shoots back the other way opposing money that has been added into the queues thinking they are in a safe position by getting on the ladder early and not that near to the front of the queues, as they believe the market has to move through a lot of money first before reaching their money by at which time they will be in a good position at the front of the queue. The market thins completely and moves against the once safe position.
Self Matching showing as matched amounts (this is wrong in my opinion)
MUFC asked what the difference was between self matching and pulling a trade out the market. Basically with self matching as I discuss and see, is when money by the same entity is being matched and showing in matched columns on charting. This gives a completely different opinion to the market for everyone else watching waiting to get involved in a market. For example, if someone has a 100K in a queue and pull it out of the queue without being matched then everyone can see it was a bluff or someone holding the market. However if they see 100K matched it would show 200K matched (100K both sides of the book) at certain odds and it would create the market to possibly jump on the back of that train and move the price further and support the position that has been matched and moved. It would give the impression the person that matched the 100K on offer knows something more than the market and others would likely follow. If all this matched money was the same entity however it would alter the perception of what is really happening at that time to seeing someone pull 100K out of the market without being matched because actually nothing has been matched.
The simplest way I can try and describe self matching is by imagining you are looking at a market that looks like there is a lot of money both sides of the ladder. Money appears to being matched at the front of the queue, making it look like the market is active. Imagine if all that money you can see both sides of the ladder was a single entity, maybe betfair themselves? I don’t know but I doubt it. If you then offer money into the market and if the entire market you can see is actually one single entity they would have the ability to self match their own money in the queues they can then move the market as many ticks as they wanted beyond your money and with enough funds hold it there as long as they want until you sell out of your position or new money arrives. It would show as matched in charts which a lot of people follow, whilst taking your money and moving you into a losing position until more money comes into the market and they can safely sell out at a profit. This can be scaled up as much as possible to the extent of dropping bombs.
Possible Scenario
Imagine a 10K lay bet came into the market 2 ticks away from the current money that wasn’t the market makers money. With a big enough bank if they could self match all your own money and move it 6 ticks (say 10K of the real money and 40K of your own) and still leave 50K sat in the queue it would appear actually that 100K has just been matched (both sides of the book) and they are still wanting another 50K matched. Most traders in my opinion would jump on the back of that short term to push thinking if he wants 50K more matching to nip in front of it thinking it is the crazy bomber seeing that 50K is matched and he is still sat there wanting to match a further 50K. Allowing the bomber to slowly drip out the 10K of real money matched. I know that sometimes bomber goes in play. Im not saying this is the case but it wouldn’t surprise me if the bomber is real and that there are copycats around that prey on his moves.
I know the above is an extreme view saying there is no other money in the market but I’m trying to keep it simple.
Why I’m sure it’s happening
For a long time it felt like the second I entered money in the market it went against me and I just presumed I was doing something wrong. Then one silly night started playing with bigger stakes. 170 quid down after 2 races seeing the money move so quickly against me. Then 1K orders and the market shot against me so I turned it into a gamble which won me about 6K. The next night on a little high I decided to enter my largest ever stake into the market of 2K into the market, just so I could say I’ve put a 2k bet in the market. I thought play it safe in the market that was going sideways for 10 mins, so I put it in a queue 3 ticks behind the current price and behind about another 6K in the queue before me in total and the market just jumped through all the money and beyond. I added another 4K of my money and it just kept going with no pressure back. For me this was the straw on the camel’s back that made me think something was not right.
It was at this point that I started to feel sure the markets are being controlled and probably by people with super huge banks that look out for money to come into the market to move it and hold it there very short term. I guess this is just regular trading if everyone is playing on the same terms.
As I was that sure something wasn’t right I started to feel that I can’t compete against them as they will always have enough money to outfight me and I started to believe they are just waiting for money to enter the market to oppose it but I couldn’t get my head around how they jumped through all the money in front of me also in the queue the second my money arrived, why didn’t they do it to the other 6K in the queue before my money arrived? I quickly came to the same conclusion that this was the same entity and which was the reason why some of the top pros can make so much in a single race when everyone else is talking that there is no real liquidity in the markets, can’t get money matched etc…. that we have all been reading about. I therefore decided the way to trade against these people is to pick good breaking point of 10s, where you wouldn’t expect to see so much money being traded and test it well out (up to 25mins out).
What I quickly saw was that at 10s for example there seemed to be a lot of money proportionally to the market on the lay side. Then at 10.5 it was so very weak and at 11s a bit stronger than at 10.5s. I thought as someone was offering up 500 pounds for example or about 5,000 exposure at 10s, 20-25mins out then they were doing so controlling the market. It appeared to look like money was being matched on both sides of the book as it was constantly turning over so the market appeared to be active but the 10s never weakened and the 10.5 stayed quite weak. Basically, what I later found out is that they would be happy to accept bets at 10s from backers and keep it weak at 10.5 so they could drip their money back out slowly to real layers and traders were reluctant to go in at a weak 10.5 to oppose a strong 10 that far out.
As I totally believed it was the same entity I decided to start getting stuck in at the money. I thought that if it was the same person they need the market to look active so they need to keep turning their money over because if this stops and the market didn’t move it wouldn’t attract new money to the market from traders or want to be traders, where I believe most of the money in the markets is won and lost and not from real punters. Therefore I first started to put small money at 10s well out from the start of the race and I was surprised how it started to weaken so quickly after seeming to be going sideways for some time whilst money was being matched. Why could my 10/20 quid cause the market to do this? I therefore decided it was the same entity. In order for them to attract money they need to keep the market active and therefore they have to turn over money on both sides of the book. Therefore I decided to also get in on the weak price of 10.5 and at a slightly stronger 11s which meant if they went through the weak 10.5 I could quickly scratch and add to my position at 10.5 on the lay side to be at the front of the queue on 10.5, 11 and 10s and I would add to 11.5 so that I could repeat the position once my scratch trade was out of the market. I know it sounds like a typical scalp trade but it was the timing. I could be 25 mins out and the market was completely reacting to my small trades as I wasn’t just scalping my trade to get out, I was putting myself in a great position by adding to the scalp to be again on both sides of the book whilst they were needing to continue turning over their money to keep the market active. If they did this then eventually they would have to match my bets both side of the book. This may sound crazy to some but to others it may be clear when I say at times I could even see the market stop and think.
I use to get in some real battles up to 25 mins out and the market would jump into action. As there was nothing else happening at that time it was for sure a battle against the same entity. I thought that at the time I would just frustrate them because as long as they needed to self match to make a market look active they wouldn’t want me to nip in even for 5 pound stakes as they would still need to keep the market looking active to attract new money. 2 or 3 nights in a row, I saw some silly money put into the market again 20-25 mins out which appeared frustration and a show of strength. I think the most I saw was something like 70K on the lay side around 4s put up into the market or a liability of around 200K. I did mention this on the forum and it soon stopped after and was less obvious for everyone to see.
In the beginning it was quite easy to use small money against and consistently win as they also have to think about other money coming into the market. They did then become more aggressive and would send the ladder from 10s to 9s quickly but as long as I didn’t over expose myself it was quite easy to cut my losses and start over again. It was very hard however to compete with them for larger amounts because I felt that in general they were reluctant to make a big move against small stakes but the second I tested it with say 100s+ they would be happy to move from 10s up to around 12s quite quickly.
Finally, I decided if they had an edge in the markets where they can self match bets then it is because
1) They are working from 2 or more accounts
2) Its betfair themselves
3) It was a bot acting against my every move
Option 1, I didn’t think would be possible because I thought after the premium charge of 60% was introduced, betfair will be looking for accounts that suddenly seem to be being hedged to another account that doesn’t pay a premium charge. Betfair did later confirm to me that this is the case.
Option 2, I thought to myself that if betfair had people trading for them, their traders would totally need to understand the market themselves and also betfair would have to allow them risk in the market to exceed others. They couldn’t just recruit someone straight out of Uni and expect them to get it. To have the top traders making decisions like this for betfair I thought they would probably need to pay them around 60,000 pounds a year net which would be around 100K a year before tax. I thought if people are capable of pulling this out of the market then the last thing they would be doing is working for betfair for 60K a year.
Option 3 – It just felt impossible that a bot could act in the way it did and even get frustrated offering up 70 K on the layside against me 25 mins out.
Therefore, I went back to option 1. I decided that it is most probably traders that have privileges in the market and therefore thought they must have at some time contacted BF and asked for privileges. I thought of how I could get a reaction out of betfair to prove this point. I therefore came up with the idea of selecting a market where there is basically no liquidity, offering to betfair a new geographic that would suit this market and offer to create the liquidity in the market to create interest within the market to bring trading money into the market. Without the liquidity there would be no interest in the market but I would need some assistance. I therefore fired off an email to them asking in general is it possible to self match bets if I offered something good for BF. Much to my surprise I got a reply saying if I can offer more detail and if it’s good for them and me then they are open to suggestions. Therefore I basically submitted a proposal saying I would offer liquidity within a certain market but needed the ability to self match my own bets to make the market look active to attract new money into the market. I’ll leave it to your imaginations what the reply was!
I was also surprised at the time the amount of traders that contacted me to see why I said it was possible to self match bets. Some are regular posters, others are people whose websites/blogs I had read and were seasoned pros but not seen on the forum and the general feel at that time was something was happening but they couldn’t quite put their finger on it. Some thought it was X-matching, some thought it was a superbot from Betfair, whilst others agreed 100 % with me etc..
I have also seen recently this has been extended to some PC traders openly commenting that they are seeing self matching at the front of the markets, and others getting frustrated and leaving to betdaq where they believe it is less corrupted and therefore offers more opportunity taking PC into account. I therefore finally thought it would be good to post up my views having some support.
So this is my story as to why I’m 110% sure the markets are corrupted. I hope people understand the scenario I was setting up above. Im sure if you set up the same scenario you will start to feel the same. We all know that manipulation goes on but in my opinion it should be done on a level playing field. I have made the example around 10s because this is a price you wouldn’t expect to see great amounts of money being matched 25 mins out and the market going crazy over a few 10 pound positions around the front of the queue so it’s easier to spot. However, I believe it is happening on all markets on all horses and it is just scaled up and down depending on situation.
Anyway, some will think that this is just some crazy frustrated traders but others will go away and try for themselves when things settle down as there will probably be a few people trying now.
I hope that it gives an opportunity for others to discuss what types of manipulation happens in the market and what they see as I don’t see that people usually comment on what or how manipulation is happening.
Manipulation - Self Matching - What do you see?
An interesting and honest appraisal of the scenarios as seen.
I cant help thinking its a blurred line between manipulation of the markets fairly and unfairly, and its hard to call exactly when trading ends and manipulation begins.
Its becoming very obvious though, that all is often not as it seems to be in the market, for a variety of reasons.
I cant help thinking its a blurred line between manipulation of the markets fairly and unfairly, and its hard to call exactly when trading ends and manipulation begins.
Its becoming very obvious though, that all is often not as it seems to be in the market, for a variety of reasons.
I think you dismissed XM very fast there, also Peter has said before they offer up to 10 accounts for those that are profitable and provide large turnover... or something along those lines, please correct me if im wrong.
Also im presuming XM, SP's, Prices past and present along with price correlation on BD come into all your calculations.
Honestly i don't think you'll get alot of response that is of use to this as those who are in a position to have more knowledge and understanding of the situations you describe would be foolish to share it.
It's good that your seeing some of the things that go on though, im sure it will help your trading... personally i think there's quite a bit more too it, have a look at the whole book in these situations.
Best of luck!
Also im presuming XM, SP's, Prices past and present along with price correlation on BD come into all your calculations.
Honestly i don't think you'll get alot of response that is of use to this as those who are in a position to have more knowledge and understanding of the situations you describe would be foolish to share it.
It's good that your seeing some of the things that go on though, im sure it will help your trading... personally i think there's quite a bit more too it, have a look at the whole book in these situations.
Best of luck!
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CaerMyrddin
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Steven, you wrote such a long and insightful post that it's a shame you aren't getting more answers, but like Chuck said, those who know more about it won't share their views, in a legit position. Anyway, I'd like to thank you for sharing your knowledge.
I agree.
BTW, here is a video showing some manipulation: http://www.youtube.com/watch?v=A7rqF24Sjsg
Jeff
BTW, here is a video showing some manipulation: http://www.youtube.com/watch?v=A7rqF24Sjsg
Jeff
CaerMyrddin wrote:Steven, you wrote such a long and insightful post that it's a shame you aren't getting more answers, but like Chuck said, those who know more about it won't share their views, in a legit position. Anyway, I'd like to thank you for sharing your knowledge.
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steven1976
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Hi Guys,
Thanks for the replies and as for the lack of response I guess I can take it as a deafening silence! At least I havent been shot down massively which would offer some support or at least acceptance to my ideas as real possibilities.
Chuck in regards to XM in my opinion it is quite different to what I am talking about, Im sure. XM is easiest to spot i find in very weak markets with just 2 competitors like cricket with big gaps between the money. What I was discussing was reaction to every single position I put in the market and had nothing to do with it being matched on a different horse in the market Im sure.
As for the 10 accounts, maybe someone else can clarify the details with multiple accounts. My understanding is you can operate more than one account, maybe they would be needed for more than one type of sport and you can pay different commissions on each of these accounts? Therefore, betfair dont accept that you could just use different accounts on different levels of commission as they would see it as fraud if one account is only paying say 5% and another account is 45% because if you were smart you could hedge a green off to the account on the lowest premium. This could also be a reason why some people have reported issues with BF closing accounts even with someone at opposite end of the country but that would be a different thread to discuss it. Either way, if you can simply register multiple accounts and self match bets to distort a market then it would help explain why I see self matching. It will make it a lot easier for others to operate in a similar way and the markets will become very messy i would imagine. I guess you might as well chuck (no pun meant) the scrap book away for WOM, charting etc... out the window if everyone starts self matching positions.
Anyway, I posted up my understanding as I was requested to do so in another thread. I was hoping that the main point of the thread would open up some discussion on other types of manipulation and actually explain what, why and how things are happening to manipulate a market which unfortunately it doesnt seemed to have done. I was also going to offer up some manipulation I believe I see on other markets (although not examined in detail) but decided against it now as it takes to long to write up!
Cheers anyway for all replies
Hopefully my insights open a few opportunities for some out there.
Thanks for the replies and as for the lack of response I guess I can take it as a deafening silence! At least I havent been shot down massively which would offer some support or at least acceptance to my ideas as real possibilities.
Chuck in regards to XM in my opinion it is quite different to what I am talking about, Im sure. XM is easiest to spot i find in very weak markets with just 2 competitors like cricket with big gaps between the money. What I was discussing was reaction to every single position I put in the market and had nothing to do with it being matched on a different horse in the market Im sure.
As for the 10 accounts, maybe someone else can clarify the details with multiple accounts. My understanding is you can operate more than one account, maybe they would be needed for more than one type of sport and you can pay different commissions on each of these accounts? Therefore, betfair dont accept that you could just use different accounts on different levels of commission as they would see it as fraud if one account is only paying say 5% and another account is 45% because if you were smart you could hedge a green off to the account on the lowest premium. This could also be a reason why some people have reported issues with BF closing accounts even with someone at opposite end of the country but that would be a different thread to discuss it. Either way, if you can simply register multiple accounts and self match bets to distort a market then it would help explain why I see self matching. It will make it a lot easier for others to operate in a similar way and the markets will become very messy i would imagine. I guess you might as well chuck (no pun meant) the scrap book away for WOM, charting etc... out the window if everyone starts self matching positions.
Anyway, I posted up my understanding as I was requested to do so in another thread. I was hoping that the main point of the thread would open up some discussion on other types of manipulation and actually explain what, why and how things are happening to manipulate a market which unfortunately it doesnt seemed to have done. I was also going to offer up some manipulation I believe I see on other markets (although not examined in detail) but decided against it now as it takes to long to write up!
Cheers anyway for all replies
Hopefully my insights open a few opportunities for some out there.
Hi Steven
I appreciate the efforts you have gone to and your explanation is clear.
I must admit though; (and at the risk of appearing foolish); I'm not sure that I completely understand why it's such a big issue?
In the past I had a simple scalping bot that fired in some big back bets in out of the money and then if/when the current price approached it, place a lay bet in just underneath my back bet and simultaneous cancel one or more of the back bets to 'aid' the market movement in a favourable direction. Thats no secret, the first market today will demonstrate that.
In that scenario, assume I put in 3 x £1000 back bets and as the market approached my first back bet, I self matched £2000 hoping that I may make a 3 tick movement. The only difference between me and this entity you write about is that it wouldn't show as a matched amount if I did it, whereas it would if the entity did. As I said at the beginning why is that a big issue? I appreciate that it is falsely showing that money is being traded, but in 'general' traded vol isnt part of my equation (naturally I wouldn't trade a wolverhampton market one day out where just £1k had been matched etc)
Thanks and appreciate the effort you have gone to but I think I'm missing the point?
Regards
Peter
I appreciate the efforts you have gone to and your explanation is clear.
I must admit though; (and at the risk of appearing foolish); I'm not sure that I completely understand why it's such a big issue?
In the past I had a simple scalping bot that fired in some big back bets in out of the money and then if/when the current price approached it, place a lay bet in just underneath my back bet and simultaneous cancel one or more of the back bets to 'aid' the market movement in a favourable direction. Thats no secret, the first market today will demonstrate that.
In that scenario, assume I put in 3 x £1000 back bets and as the market approached my first back bet, I self matched £2000 hoping that I may make a 3 tick movement. The only difference between me and this entity you write about is that it wouldn't show as a matched amount if I did it, whereas it would if the entity did. As I said at the beginning why is that a big issue? I appreciate that it is falsely showing that money is being traded, but in 'general' traded vol isnt part of my equation (naturally I wouldn't trade a wolverhampton market one day out where just £1k had been matched etc)
Thanks and appreciate the effort you have gone to but I think I'm missing the point?
Regards
Peter
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steven1976
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Hi Peter,
I think my example of the bomber should answer your question. If you self match money and it just looks like it was pulled from the market it would give a different meaning to the market than if it looks like the money was shown asmatched. This id imagine would also effect someone like yourself if you used a bot to trigger when xxxx amount is matched. My main worry is that it no longer becomes betfair if people have an edge that could change opinions on what is happening in a market opinion that others have and which I was offered. If you try and understand my example of the bomber above although it i ficticious it may help you understand why I believe it changes the market more than simply someone dropping out their order for all to see as a bluff.
I think my example of the bomber should answer your question. If you self match money and it just looks like it was pulled from the market it would give a different meaning to the market than if it looks like the money was shown asmatched. This id imagine would also effect someone like yourself if you used a bot to trigger when xxxx amount is matched. My main worry is that it no longer becomes betfair if people have an edge that could change opinions on what is happening in a market opinion that others have and which I was offered. If you try and understand my example of the bomber above although it i ficticious it may help you understand why I believe it changes the market more than simply someone dropping out their order for all to see as a bluff.
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spreadbetting
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I think the lack of response may be due the size of your post tbh, most people pretty skim posts and the in depth post may also suggest you've already made up your mind so no room for any real discussion.steven1976 wrote:Hi Guys,
Thanks for the replies and as for the lack of response I guess I can take it as a deafening silence! At least I haven't been shot down massively which would offer some support or at least acceptance to my ideas as real possibilities.
Probably a valid point, I didn't read through it all.
Manipulation goes on in the market for sure, but it always has. Lots of old threads here on manipulation. It's easy to think the market has it in for you or there is a conspiracy against you, but you have to ignore that or you will never move forward.
Tried laying at a high price, they won. Backed at a low price they lost, tried them all, feel like the market somehow has it in for you, but eventually realised it didn't and it was just my mind playing on me. Found a simple trading strategy and just do my best to earn from that.
Manipulation goes on in the market for sure, but it always has. Lots of old threads here on manipulation. It's easy to think the market has it in for you or there is a conspiracy against you, but you have to ignore that or you will never move forward.
Tried laying at a high price, they won. Backed at a low price they lost, tried them all, feel like the market somehow has it in for you, but eventually realised it didn't and it was just my mind playing on me. Found a simple trading strategy and just do my best to earn from that.
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steven1976
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- Joined: Tue Jan 19, 2010 6:28 am
Fair comments guys, I realised the post was long but thought better to write it up in detail so then people can pick through and take points they think are useful and discard the rest as they wished. Everyone is at different levels in trading and for some that have been doing it for a long time it may be a waste of time but for others just thinking of a career as a professional trader it may offer something for them.
As I stated in my post manipulation is mentioned in other threads but I don't actually see much discussion of what is happening, only that it is happening. So although I have closed ideas on the front of the queues on horse racing I was hoping others would expand on what they see as manipulation not just on horses but other sports.
As I stated in my post manipulation is mentioned in other threads but I don't actually see much discussion of what is happening, only that it is happening. So although I have closed ideas on the front of the queues on horse racing I was hoping others would expand on what they see as manipulation not just on horses but other sports.
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spreadbetting
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steven1976 wrote: So although I have closed ideas on the front of the queues on horse racing I was hoping others would expand on what they see as manipulation not just on horses but other sports.
I think you'll find the majority of people with a strong view of how the markets are being 'steered' will have the same view
Sorry if my first post seemed a little stern steven, didnt mean it like that... kinda agree with what someone else said.. why's it an issue? this kind of things can produce some great edges of their own, wouldnt want them to stop!! I look forward to what peter has to say when he has time too 
Me personally think if people think manipulation is wrong then trade in play, there is none there, but as someone said manipulation can carry you in the right direction sometimeschuck536 wrote:Sorry if my first post seemed a little stern steven, didnt mean it like that... kinda agree with what someone else said.. why's it an issue? this kind of things can produce some great edges of their own, wouldnt want them to stop!! I look forward to what peter has to say when he has time too