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How do the serious people on here approach this?
I believe that I currently have an edge of about 3% (after commission). I place one or more lay bets on many markets during the day (using a bot), with a maximum liability of up to 4% of my bank (per market). The max 4% liability is fixed, and is based on my available balance when the bets are placed.
The last time I analysed my bets closely my average lay odds was about 10.
My strategy has been running for about 15 months, during which time there has been quite a lot of variability (to be expected though). Best winning day = + 66% increase on bank, worst losing day = -45% decrease of bank.
I did a web search on this earlier today and found the following formula:
Risk of Ruin (%) = ((1-edge)/(1+edge))^Capital_Units
where I think Capital_Units (for me) is 25 (i.e. 100/4% of my bank).
In my example I calculate a risk of ruin percentage of nearly 20% - can this be right? I understand that this is a worst case as often my liability on any particular market isn’t always the full 4% of my bank.
Why doesn’t my average odds affect this? Am I even using the right formula?
As usual all sensible comments greatly appreciated – thanks in advance.
I believe that I currently have an edge of about 3% (after commission). I place one or more lay bets on many markets during the day (using a bot), with a maximum liability of up to 4% of my bank (per market). The max 4% liability is fixed, and is based on my available balance when the bets are placed.
The last time I analysed my bets closely my average lay odds was about 10.
My strategy has been running for about 15 months, during which time there has been quite a lot of variability (to be expected though). Best winning day = + 66% increase on bank, worst losing day = -45% decrease of bank.
I did a web search on this earlier today and found the following formula:
Risk of Ruin (%) = ((1-edge)/(1+edge))^Capital_Units
where I think Capital_Units (for me) is 25 (i.e. 100/4% of my bank).
In my example I calculate a risk of ruin percentage of nearly 20% - can this be right? I understand that this is a worst case as often my liability on any particular market isn’t always the full 4% of my bank.
Why doesn’t my average odds affect this? Am I even using the right formula?
As usual all sensible comments greatly appreciated – thanks in advance.
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zipper what is your problem? The chap is asking a question and you think its ok to respond with utter rubbish? grow up
Hello wayne, it does look like you are using a simplified formula that isn't taking into account all the factors that you are able to supply. The above formula is very rigid and only allows the most basic variables to be processed.
However, your risk of ruin will probably be much higher than you thought. Also, if you reduced your bank by 45% in one day, it would only take two of those days (not even necessarily consecutively, depends on how your other days go) to reach ROR i.e. your inability to continue trading as you were.
You have been going for approx. 450 days and have already hit a 45% decrease (0.22% implied probability). The worrying thing is, as you are staking to a %age of your current bank, it doesn't matter how successful you have been in the past with regards to incresing your bank as it will still reduce by 45% with your bots criteria.
Obviously it doesn't have to be as severe as a 45% decrease, it could only be 20% - you would have to hit more of these in a run, but of course they are more likely too.
However, your risk of ruin will probably be much higher than you thought. Also, if you reduced your bank by 45% in one day, it would only take two of those days (not even necessarily consecutively, depends on how your other days go) to reach ROR i.e. your inability to continue trading as you were.
You have been going for approx. 450 days and have already hit a 45% decrease (0.22% implied probability). The worrying thing is, as you are staking to a %age of your current bank, it doesn't matter how successful you have been in the past with regards to incresing your bank as it will still reduce by 45% with your bots criteria.
Obviously it doesn't have to be as severe as a 45% decrease, it could only be 20% - you would have to hit more of these in a run, but of course they are more likely too.
Thanks for the reply Wedged.
I've probably been lucky so far, overall I've only had two losing months (and the first of those was negligible), but the strategy has always (so far) turned around.
I understand that the longer I go the more likely I am to encounter extremes of bad (and also good) runs. It is more and more probable that I could hit a long enough losing streak to empty my bank.
What other info do I need to calculate a more realistic ROR? I guess I should reduce the %liability as a starting point? I assume I also have to decide what level of risk I'm prepared to live with.
I've probably been lucky so far, overall I've only had two losing months (and the first of those was negligible), but the strategy has always (so far) turned around.
I understand that the longer I go the more likely I am to encounter extremes of bad (and also good) runs. It is more and more probable that I could hit a long enough losing streak to empty my bank.
What other info do I need to calculate a more realistic ROR? I guess I should reduce the %liability as a starting point? I assume I also have to decide what level of risk I'm prepared to live with.
Does your strategy make a profit at fixed level stakes i.e take the same size bet on each lay.(instead of fixed liability)
If so,take a bet of 0.5% of your bank on each bet. i.e £1,000 bank take a £5 wager.On a 20/1 this would mean your liability would be £100 (10% of bank),but if your strategy does make 3% long term then I'd be amazed if you went skint.
I played like this for 9 months on a strategy that was ultimately break even,(even layed a 50/1 winner once)but never came close to losing the lot.
Good luck.
If so,take a bet of 0.5% of your bank on each bet. i.e £1,000 bank take a £5 wager.On a 20/1 this would mean your liability would be £100 (10% of bank),but if your strategy does make 3% long term then I'd be amazed if you went skint.
I played like this for 9 months on a strategy that was ultimately break even,(even layed a 50/1 winner once)but never came close to losing the lot.
Good luck.
Hi Tame
At the start I did lay to level stakes and did make a profit. Back in Feb I saw something on here that made me change to fixed liability (payout). This has seemed to haqve made a very big difference in increasing profits, but is also more volatile. Hence my questions about risk and (previously) taking profits.
I hope that I don't go skint (as I never want to top up on here again), so I'm looking for advice to avoid that. So far so good (and I've already withdrawn about 10 times my small starting bank), but I think I need to learn a lot more about money management.
I too have laid 50/1 winners (my maximum odds), and probably at the rate of 1 every 50 times my bot picks one!
Thanks for your comments, and good luck with your bets.
At the start I did lay to level stakes and did make a profit. Back in Feb I saw something on here that made me change to fixed liability (payout). This has seemed to haqve made a very big difference in increasing profits, but is also more volatile. Hence my questions about risk and (previously) taking profits.
I hope that I don't go skint (as I never want to top up on here again), so I'm looking for advice to avoid that. So far so good (and I've already withdrawn about 10 times my small starting bank), but I think I need to learn a lot more about money management.
I too have laid 50/1 winners (my maximum odds), and probably at the rate of 1 every 50 times my bot picks one!
Thanks for your comments, and good luck with your bets.
If I remember correctly I think the betting guide on this site covers this topic in detail and is very useful:
http://www.cdsystems.uk.com/
http://www.cdsystems.uk.com/
If you lose 10% you will need to win 11% to replace the loss; a 20% loss requires a profit of 25% to replace, a 40% loss requires a profit of 67% to replace lost funds, etc.; your losses grow arithmetically and the profits required to replace the losses grow geometrically.
4% is surely too high a risk, how about laying to 1%, 1.5% or a max of 2% of your starting bank and keeping to that figure after a loss but increase the "lay to" figure after a profit, i.e. ratcheting? A 45% drawdown would suggest 1% imho.
Good luck with your endeavours.
4% is surely too high a risk, how about laying to 1%, 1.5% or a max of 2% of your starting bank and keeping to that figure after a loss but increase the "lay to" figure after a profit, i.e. ratcheting? A 45% drawdown would suggest 1% imho.
Good luck with your endeavours.
Marky - useful stuff on that site, thanks
Al Dente - I may have been unintentionally misleading people (including myself) about the 4% liability. I use the payout calculation so the liability depends on the odds I offer e.g. (assume £1000 bank, way above where I am at the moment):
4% of bank = £40
If laying odds of 2.0, stake = £20, liability = £20
If laying odds of 10.0, stake = £4, liability = £36
If laying odds of 50.0, stake = £0.80, liability = £39.20
So the full 4% liability is not always the case, and if more bets are matched on a market the overall liability is reduced. The combination of odds/bets matched determines the overall expectation for a market. Very occasionally I match a lot of selections and the market greens up. I have no idea what my average liability % would be on a market (I'm in about 250 markets per day) but 4% is the absolute worst case.
However I shall think about reducing the 4% figure, thanks Al for your input & good luck.
Al Dente - I may have been unintentionally misleading people (including myself) about the 4% liability. I use the payout calculation so the liability depends on the odds I offer e.g. (assume £1000 bank, way above where I am at the moment):
4% of bank = £40
If laying odds of 2.0, stake = £20, liability = £20
If laying odds of 10.0, stake = £4, liability = £36
If laying odds of 50.0, stake = £0.80, liability = £39.20
So the full 4% liability is not always the case, and if more bets are matched on a market the overall liability is reduced. The combination of odds/bets matched determines the overall expectation for a market. Very occasionally I match a lot of selections and the market greens up. I have no idea what my average liability % would be on a market (I'm in about 250 markets per day) but 4% is the absolute worst case.
However I shall think about reducing the 4% figure, thanks Al for your input & good luck.
Waynebrayn sorry for being rude yesterday . this may help .
your average odds are way to high 10/1 so you say at them odds you have to have a very large bank or your playing for peanuts .. I lay horses only and sometimes back them the first 3 in the course betting post time thats were the losers are . why two of em are sure to loss and you got the field running for you good luck
your average odds are way to high 10/1 so you say at them odds you have to have a very large bank or your playing for peanuts .. I lay horses only and sometimes back them the first 3 in the course betting post time thats were the losers are . why two of em are sure to loss and you got the field running for you good luck
Zipper - apology accepted.
Compared to you I am playing for peanuts. Unlike yourself, because I can't pick winners or losers I've taken the "value" approach, which seems to be working for me at the moment.
I've seen some of your other posts so I know how your opinion about value, and I don't wish to have that debate on this thread. I accept your view about only the winner has value, but I don't fully agree with that. It obviously works for you and I have no problem with that - good luck to you.
Compared to you I am playing for peanuts. Unlike yourself, because I can't pick winners or losers I've taken the "value" approach, which seems to be working for me at the moment.
I've seen some of your other posts so I know how your opinion about value, and I don't wish to have that debate on this thread. I accept your view about only the winner has value, but I don't fully agree with that. It obviously works for you and I have no problem with that - good luck to you.
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