Thursday, 25 March 2010

Week 4

Spread Betting - NBA/NCAA/Football

Stakes profit target of bank:
NBA 1 or 2%
NCAA BB 0.5 or 1%
Football 0.5 or 1%

Since last update:
NBA P&L: £23.48 * Current Bank: 153.25%
NCAA BB P&L: -£29.48 * Current Bank: 91.66%
Football P&L: £35.69 * Current Bank: 107.14%

I have now added Football picks to my ever increasing repertoire. This is for the major European leagues where I have decent enough stats to analyse. I have been looking at Football for a while and the draw has always made any edge quite small in the longterm. Placing some filters on price range has helped increase this enough to warrant giving it a go, and for only 5 days it has certainly proved worthwhile already. It's nice to see something new have such a positive start, but of course it is mainly one good weekend that could easily be wiped by an equally poor one. So staking is strict and the discipline to stick to the rules is as ever paramount.

The NCAA BB started off terribly and clawed back a couple of percent in the past few days, overall though it is still underperforming. Plenty of games to go though and I'm confident that it will eventually return an overall profit once the mean is met, or at least break even. 
And of course let's not forget the NBA, which has been my star performer and continues to go from strength to strength. Not the best of weeks but another profitable one is warmly welcomed and has helped push the total in the right direction.

Staking Plan
My staking plan has changed again as predicted. The previous one was causing too many permutations and although it did save me some large losses in the NCAA BB in comparison to a direct martingale approach, just straight bets would have produced similar results.

With some testing of the previous results, surprisingly a straight 3 stage martingale approach (3 bets) or a 3 stage semi-martingale approach (with the liability split equally for the last stage - 4 bets) seem to produce the highest profitability. A fourth stage opens up potential for losses that are unacceptable, so it has to be limted to 3 stages to be effective. At the moment this is the best staking system I can find in relation to my betting style. I think the 3 or 4 bets decision will probably be made when I get to that third stage, and will be based mainly on probabilities. I'll need more results to see which one of these is more profitable in the long term, although I can't see a huge variance as the first two stages are identical, I'm leaning more towards the straight 3 stages at the moment.

Wednesday, 24 March 2010

Manual Trading RIP

Right so as you've probably figured out by now, my time to manually trade the horses and football is pretty much non-existent, and regrettably it looks like this will remain so for the foreseeable future. It is of course disappointing, particularly having made such good progress towards the end of last year. However priorities change and when I started this venture from a dead end job with plenty of time to trade in the afternoons, my lifestyle has almost completely transformed with a good career path that is much more rewarding, satisfying and time consuming, not to mention the securities that comes with that.

There are a few invaluable lessons I have gained from my trading in regards to money management and discipline. Dealing with emotional reactions effectively is also a big plus having already had a couple of challenging scenarios with my basketball picks, where I could easily of overstaked or hedged when things were not looking good, but saw them through accepting losses where necessary. I don't think I would of stood a chance if I hadn't worked on my discipline so thoroughly during my trading experiences.

So with this in mind, I have decided to focus fully on my spread betting. This has proved to be a very convenient style, permitting me to place the bets and update my stats when it suits me, as opposed to needing to be available when markets are tradeable. Situations change so I would never say never on the trading front, and who knows if the US legislation does 'develop' as predicted by many, then the liquidity in US racing amongst other markets should spike, and would make trading very accessible for me oncemore (once BF sort out the off times!).

I have also expanded my spread betting again to include a few major European football leagues. It's been going well so far and I will post my final weekly and then monthly review analyzing my results for March. I think weekly posts are the best way forward with the spread betting, as it gives me adequate time to reflect on the immediate results whilst keeping all the spreadsheets up to date.

Monday, 15 March 2010

Staking Systems & Week 3

Spread Betting - NBA/NCAA
Stake: 1 or 2% of bank
Session P&L: £12.30
Current Bank %: 144.32%

It has been a bit of an up and down week. I had my best ever sequence of results followed by my worst ever sequence, with the net result being a slight profit. And as you have probably noticed I have started to apply the same statistical approach to the NCAA basketball, with mixed results so far, 3 wins and 3 loses.

I also spent some time looking at applying a more rewarding staking system, as upto now I have mainly been using a fixed profits approach with a slight Kelly criterion twist either at 1 or 2%. I have then explored higher risk/reward alternatives such as the pyramind and martingale systems. Although I'm still changing things and wll most probably switch it up again, I'm going to try a semi-martingale approach in addition to the methods I mentioned above. So 1, 2 or 3% will be the initial stake, if this loses I then split the losses between the next 2 bets which also have a profit target of the same percentage, again if one of these bets loses I will split it again into two further bets. For this to work I would need 2 out of 3 bets to win (66.7%) or ideally 3 out of 4 (75%). At the moment I am on a 70% average following my recent worst run of results, and for most of the time I was sitting on 80%+, so in theory I should clear my liability with this system. But to be even safer I have added a 1% reduction in profit after each loss, so for example on a 2% bet that loses, instead of going for the full 2% on each of the following 2 bets, I will go for 2%*0.99 plus half the liability of the previous stake. This effectively reduces the rate at which the stake increases and prevents it from increasing indefinitely, as this reduction eventually causes a biting point where the liability increase and profit decrease cancel eachother out, effectively causing a level stake system. This occurs at approximately double the initial stake, so effectively what I am doing is implementing a stake system that goes from level stakes of 2% to 4% through a sequence of a few semi martingale recovery stages. Worst comes to worst I'll be level staking at 4%, and if that happens then my strike rate must be quite poor. Any staking system, even level stakes with such a poor strike rate would marginally profitable at best or unprofitable anyway. I would see reaching this stage as a sign to review the system.

I started this on the day I had my worst sequence of results, out of 8 bets 6 were losers, so this has now left me with 10 follow up bets (having won 2 follow up bets already). Worst timing ever I suppose but it has given me a good sequence to test if this really works. Before that I had 15 winners out of 16, so another run like that and all the liability loops will be easily covered. Sequences of 3, 4 or 5 winners in a row have been quite frequent throughout, so let's see how it goes. What I like the most is that the limiter of profit per bet prevents the martingale approach from escalating the stakes indefinitely and limits me to about double my initial stake at its highest. I've also introduced a 3% bet, but have not used it yet, it is for when I find an 80% probability bet in the spread, as you can imagine this is very rare, particularly at an average price of 1.9. However when going over my data I have seen it crop up once or twice so it is there for those rare occasions. With this in mind almost all my initial bets will be split between 1 or 2% initially, with a rare 3% if that opportunity arises.

Monday, 8 March 2010

NBA - Week 2

Spread Betting - NBA
Stake: 1 or 2% profit
Session P&L: £65.31
Current Bank %: 141.25%

My second week of the NBA spread betting exercise has gone well. A profit of £65.31 with my bank now standing at 141.25%. I've gotten much more comfortable with each bet as the winners have started rolling in knowing that each one is making it less and less likely for this to go tits up. The statistical analysis shows it will be profitable, over the past 7 NBA seasons, and this is also true for the NFL, but with only 24 bets placed so far since deciding to put money into it, I'm not counting my chickens yet! Ideally I want a large sample size near 1000 bets to analyse but we're talking 14 seasons or so for that, I'd be better off going for a PHD on the subject!

Some observations I have found interesting, not sure why this is and perhaps an experienced bettor could shed some light on this, but most days at about 8pm UK time I was placing my bets. Nothing wrong with that of course, however I found if I took 5 minutes to place them the price and sometimes lines would more often than not shorten in those few minutes. Of course this was a tad frustrating for me knowing that if I was a minute or so faster I would of gotten a better deal. This pattern continued most of last week and yesterday I decided to make some time at 7pm to get my bet on, no problems at that time. I then checked the prices again at about 8pm, and surely enough at 8.03pm Pinnacle's price on my selection shortened from 1.952 to 1.920. Coincidence? I think not, particularly as I've been noticing it all week. The only conclusion I can come to is that someone is lumping serious amounts of cash on the same selections, causing the bookie to manage the liability and shorten the price or adjust the line. A bookie as huge as Pinnacle though, to even cause a dent we must be talking the max stake, which online is indicated on my account as about £8k! With an average of 1.7 selections a day and a price of 1.89, you do the math, someone must be making an absolute mint if this is the case. If this is the cause it does give me more confidence in my relatively tiny stakes!

On the manual trading front, once again disappointingly I have not had time off in the afternoons at all. We are making some changes at work in the next couple of months which will eventually give me more afternoons off. Until then though the horse racing trading is on hold. Football and Tennis look much more likely due to the times they are on, so we'll see how it goes with that.

Monday, 1 March 2010

Spead betting update

Spread Betting - NBA
Stake: 1 or 2.5% profit of bank
Session P&L: £49.73
Current Bank %: 124.92%

No trading since my last post as I have been working this weekend. Good news is that my spread betting exercise is going well with another 5 winners out of 6 giving me a total profit of £99.66 in my first week. My stake has increased slightly as the bank has now grown 24.92% since starting which is encouraging.

It's been quite interesting dealing with different bookmakers, especially when comparing how they operate. I think Pinnacle already don't like me as for some strange coincidence all 11 winning bets have been with them. With such small stakes I don't think they'll even care at the moment, although I am keeping a separate P&L record for each bookie as if this does escalate to higher stakes, I'll know exactly where I stand with each. I have struggled to find better value in the spreads than with Pinnacle although I have spent 5-10 minutes each day comparing prices, so far they always seem to offer the best deal, particularly when buying points. Whenever someone else comes close I did use them instead as I want to spread the bets out as much as possible, and so far Bet365 have mostly been second best. Also Pinnacle's policy on withdrawals is unlike what we're used to in the UK. You get one free withdrawal a month and after that they charge you to withdraw your funds. A bit pointless when looking for value if you’re going to get your profits further reduced from transactional charges, so at the moment it's either one withdrawal a month with Pinnacle or taking the worse price with Bet365 and free withdrawals.

I suppose I could hedge with an exchange if I want to withdraw more from Pinnacle or reduce a specific P&L. It's nice to know I still have that option although at the cost of the commission, probably better to use Betdaq if possible to prevent increasing Betfair's P&L.

Of course it's early days yet having only just started the second week, although I think it's important to keep good records early on and be prepared for the worst. So far so good though, I'm happy with a £100 return with only 10-15 minutes work a day last week.
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Other software I have found useful so fa..

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