Hi all,
I have been lurking around for a while and thought it was time to post something up and get a bit of the BA community's wisdom.
I currently work in financial markets and am, naturally, quite interested in gambling too. In gambling, I have tended to focus on arbs which, while satisfying, aren't particularly lucrative (a big exception was the 2012 US presidential elections, I am sure some here are familiar with that one). I have made a few value bets but I rarely feel like I have an edge.
My only point of comparison is financial markets. Here my strategy depends on fundamental analysis (value investing in particular). I try to find the stuff that other people don't want and work out what they are missing. This works great in its own context but doesn't really help me much here...or so I think.
So my question is what are the key concepts or techniques in sports trading. I understand that each person has their own method (value investing suits my personality) but I am more interested in practical general information.
For example, is fundamental analysis actually useful? I am aware of the Aussies in HK who made this work in horseracing but I suspect that I am outgunned here; they have better data than me and better tools (also this: http://www.bloomberg.com/news/2014-01-1 ... ayers.html). Maybe I could take a crack at a less popular sport? I understand this brings up all sorts of other issues about market efficiency, I am not looking for a definitive answer but just some kind of discussion about how these markets operate.
Or do people trade off flow? This is obviously harder for me to understand, I know people make money doing this but what is the edge? Being faster? Again, I am not looking for a definitive answer here (especially here as I don't think I even know the right questions to ask).
Finally, I think the solution in either case is data. I am aware of some useful data but I feel I am missing quite a bit. For example, if I was interested in flow I would want to look at volume on price but I haven't been able to locate any useful market price/volume time series. Likewise, fundamental data on sports seems somewhat limited (although not knowing which sports are "soft" means that I have been stumbling in the dark on this one).
Any info on these points would be much appreciated (particularly from someone who might have crossed from "my world").
Key trading concepts? Fundamental analysis?
...lovely...ok, tldr version...
Work in financial markets, involved in gambling arbs for a while, want to get familiar with other concepts.
In markets I do value investing, how does this knowledge transfer to gambling? What concepts do people use? Trading flow or fundamental value? What is the edge?
What data do people use to get an edge either trading flow or value?
Work in financial markets, involved in gambling arbs for a while, want to get familiar with other concepts.
In markets I do value investing, how does this knowledge transfer to gambling? What concepts do people use? Trading flow or fundamental value? What is the edge?
What data do people use to get an edge either trading flow or value?
the pro's pretty much mainly go off flow and general market fundamentals.
Stick to peak liquidity and try and watch and interpret the flow on one runner and you'll get it. There are no tools to measure this (which is a shame because I think there is a real gap in the market for some market profiling/flow tools like some of the better financial trading programmes have recently been introducing)....so you will have to learn this skill yourself and that is the difference between a good trader and a novice pretty much.
Stick to peak liquidity and try and watch and interpret the flow on one runner and you'll get it. There are no tools to measure this (which is a shame because I think there is a real gap in the market for some market profiling/flow tools like some of the better financial trading programmes have recently been introducing)....so you will have to learn this skill yourself and that is the difference between a good trader and a novice pretty much.
Thanks for all the responses (and PMs). I am still digesting some of these points (and trying to work out how I actually think about these markets) but my thoughts are...
I am slightly sceptical of talking a bit too much about flow. In markets, these people tend to be lucky rather than good. They talk a lot about "feel" and other bullshit lifted from Malcolm Gladwell or wherever(I know he is popular but that is just what I think, sorry), this is fine but I am looking for something slightly more tangible.
On flow, gambling markets are obviously quite unusual. The thing being traded has a short life (some financial products are perpetual) and liquidity floods in just before the event, I am sure there is other stuff but this must create all kind of weird effects. From responses, it seems like most gambling markets exhibit strong trends? Where is pricing data available to prove this (I am aware of some of the Betfair data but it seems pretty useless, i.e. not time series)? I am interested in more of this information about how these markets actually behave.
On fundamentals, it doesn't seem like anyone has much of an edge here. It seems like people are mainly trying to get better/quicker information than each other and play "line changes". This doesn't seem like a particularly attractive situation, so what am I missing here?
I am slightly sceptical of talking a bit too much about flow. In markets, these people tend to be lucky rather than good. They talk a lot about "feel" and other bullshit lifted from Malcolm Gladwell or wherever(I know he is popular but that is just what I think, sorry), this is fine but I am looking for something slightly more tangible.
On flow, gambling markets are obviously quite unusual. The thing being traded has a short life (some financial products are perpetual) and liquidity floods in just before the event, I am sure there is other stuff but this must create all kind of weird effects. From responses, it seems like most gambling markets exhibit strong trends? Where is pricing data available to prove this (I am aware of some of the Betfair data but it seems pretty useless, i.e. not time series)? I am interested in more of this information about how these markets actually behave.
On fundamentals, it doesn't seem like anyone has much of an edge here. It seems like people are mainly trying to get better/quicker information than each other and play "line changes". This doesn't seem like a particularly attractive situation, so what am I missing here?