I'm struggling with

The comm. structure means that you are better off trading out slightly below estimated fair value than you wd be letting your bet run.

Further, you do not need an independent pricing edge to be able to trade successfully. Most often (in my rather dismissive view) you will be taking advantage of the market-maker advantage, cancelling poor-value offers immediately while the price-taker is held up behind the clock.

Otherwise, you cd be trading momentum, wh/ is a pricing anomaly in the markets on here as much as it is money markets. Further, the greater the volatility of a runner-market, the happier a trader will be in taking a position on a momentum price w/out reference to any estimate of its fundamental value. The chance of a price fluctuating to a higher/lower point outweighs any perceived poor value on the original bet.

Btw I'm really only talking about football gambling.
HR gambling is an area totally out of my understanding, due to the fact that the fundamentals, such as the age and the breeding of horses, the handicapping and weighting, the different classes of races, are all totally incomprehensible to me.
So any of my remarks have to be taken in that limited context.

Sorry trevh, but I can't work out the first sentence myself.
Could you please give me a little example to set me in the right direction ?.
Thanks.

I thought you'd given up on this!

This whole concept of trading in and out of betting prices on the same market.
Unless both the trade in and the trade out prices are good value, I just cannot understand how it can be of long term benefit mathematically.
In the case of trading out below value to offset profits with losses in the same market to reduce commission, surely the amount of commission saved will be less than the profits given up.

Personally I don't trade out below value, unless I'm facing serious losses (which I'll explain later), so in most cases this doesn't apply to me. I'm always happy to trade out at fair value or better if possible.

In the case of trading out below value just to cut losses, surely the losses avoided will be less than the unexpected turnaround gains if you had not cut and run.
I can see the argumments for trading out if the opposite postion price appears to be good value, but not otherwise.

That's correct, but there are other factors to consider. Lets say you have an opportunity to place a bet with a substantial edge,for instance lay over 4.5 goals at 6, when the correct price is 9 before kick-off. You decide to go in-play with a big liability. Go through the possible disaster scenario's. One of them would be that three goals are scored in the first 5 minutes of the game.

You could bet some portion of your bankroll that is conservative enough so that you only ever trade out at a fair price or better if things go wrong. If this is your approach, using (fractional) Kelly to determine your stake would be a reasonable decision.

Another option that allows you to stake a much higher multiple is one where you look to trade out at fair or better if one goal is scored quickly, and as more goals go in and your position gets worse, you switch to actually giving away value (as losses pile up, the need to cut them becomes more urgent).

The need to do this may suggest that you are overstaking according to conventional wisdom, but Kelly assumes a Bernouilli distribution of outcomes. In trading there is a whole range of outcomes.

If I had £1,000 as my betfair balance, I would happily stake £500 on this bet, if it was on a game with good liquidity, which is significantly higher than Kelly would suggest (although just as Kelly bettors tend not to bet full Kelly to make allowance for errors, the same should apply here, as perhaps our assumption that the price is this much out of line is wrong).

This is because I'm factoring in the high probability of being able to trade out at a price that is at least close to fair if things go wrong. It's important to note that although the possibility of losing 50% of your bank on this bet is minuscule, it can't be ignored.

I could waffle on about this for ages, but the crux is that decreasing volatility has a monetary value. When you measure this value it tells you whether you should simply stake less, or stake more, but be prepared to give up value if things go wrong.


I can also see that there might be times that better value opportunities present themselves and you need to free up capital to take advantage of them.
What am I missing in all this ?

Yes, especially if you have a small balance. Nowadays I free up capital by cancelling unmatched bets rather than trading out.

I think what you're missing is that putting yourself in a position where you may be forced to give up value is not necessarily a symptom of overstaking.

Trevh
Just as a further explanation of my difficulties with all of this.
When I say that I don't understand your examples, I don't mean on a one off basis.
I can see how in certain scenarios there will be times when commission is, or would have been,saved by trading out.
I'm talking more about how doing this ( that is trading out at virtually any prices) over and over again on a long term basis, results in a mathematically sure case of coming out ahead of the alternative of never trading out unless it is at good value.
And therein lies another basic problem I have in all of this.
What is value in a sports bet ?. I believe it is pretty much in the eye of the beholder in that it is usually based on one's own particular rating system, which is quite often highly personalised.
There is never any absolute unconditional correct price per se. There is only ever a personally estimated correct price.

I've briefly had this discussion with someone on the tennis forum who was rabbiting on about "only mugs don't green out" etc etc.  I asked him if he would have placed the lay (green out) bet if he was not already in the market and the response was no.  That indicated to me that it was more like taking insurance than a sound betting strategy.

It is fairly simple to me, only back or lay when you think there is value in the price.  Create a trade if you believe the value has now swapped side.

For what its worth, the argument for trading out when there is no value in doing so does reduce commission because you are locking in a small win/loss however if you're are successful at doing this you will tend to pay out less commission over time (in comparison to a position taker) but more likely be punished by the premium charge!  Because of this tax it is extremely difficult without knowing personal betting patterns to decide on best tactic but I would have thought it better to position take?

There is only ever a personally estimated correct price.

This is where you're getting your knickers in a twist.

While you're correct in a lot of cases, it's close enough as to not matter if you model things well in enough of those cases that it's not an issue. There is a correct price, the trick is to get close enough to it with your estimates that they might as well be correct.

From bits I've looked at, nearly all pro gamblers can price things up within 1% in their field, and personally I believe it's much much closer than that, although I've not done enough to prove that.

You'll likely say you don't believe that. Ken always says the same. Personally I think Ken probably prices up soccer within 1% without knowing it and if you're going to continue saying you don't believe it, then you're going to continue having the problem with the maths.

Nobody's going to give you a model that probably developed over many years for projecting sporting outcomes and give you the keys to the door. You've already had enough advice from the bits I've read to turn pro tomorrow, but you'd have to put the work in.

FaFH, first of all you have to understand the difference between trading and arbitraging.

Arbitraging is making bets on both sides of the spread, such that the spread is your profit.

Trading is taking advantage of price trends.

I arbitrage tennis matches, but this requires a fairly large bank.

I trade (pre-play) soccer matches and to a degree cricket matches, because there are reliable price trends you can exploit. For example, cricket matches involving Australia and England, the Australia price will lengthen overnight Australia time and  the England price will lengthen overnight England time.

And as for value; Markets make value.

You may think you can assess value better than the market, I don't (with the occasional exception).

Providing you get it right,probably a small % profit. Hence only worthwhile using large stakes 3 figs +

And tbh none of the answers I am eliciting on here give me any extra comfort at all.

What is unclear about my answer on the maths of it?

Noted

Come on folks I'm not asking for anybody to tell me exactly what their edge is.
All I'm saying is that people come on here, talking about trading this and that, that it is all based on some highly developed technical theory involving " value" pricing, momentum theory, commission minimizing etc etc.
That is all comparable to other very highly sophisticated forms of financial trading.
That they are transferring skill sets they acquired in these other areas into the sports gambling arena.
And all I say is bs.
And if I'm wrong, prove it to some degree of satisfactory measure to me, and perhaps others who are just as sceptical but prefer to remain silent as they don't like to stick their head above the parapet like I'm doing.
So far nothing except personal abuse that I'm a leech, a fake intellectual, a lazy sod trying to steal /piggyback on other's hard work etc etc. Pretty predictable fare I would say. Particularly if many, but not necessarily most of you, really have not thought through all this properly and are in fact flying by the seats of your pants. Nothing really wrong with that, unless of course you don't have the slightest idea that that is what you are doing.
Give us a break.
And what I do to gamble successfully is neither here nor there.
Totally irrelevant to the questions on others' credibility I'm raising. Or are you implying it takes one to know one. A fraud that is.
And as I'm not on here to make and "buddies", I'll continue to say always what I think about other public comments on here.
I will try hard not to be specifically, personally rude and offensive to any particular individual and to keep it all general.
Why don't some of you try to be the same.?
Not that I really care one way or another, but a friendly debate is always much more pleasant.

I think the point is that you've had it explained to you beyond what nearly anyone in the world would consider satisfactory and you're refusing to acknowledge it.

Beyond sitting you in front of someone's spreadsheets/databases/etc and showing you how to price a market, you've had more information given you than nearly anyone in the world. If you don't get it now, you're not going to.

I'm not sure how difficult financial trading can be as many successful gamblers have gone that way to make money quicker, but not so many come this way.

Financial trading SUCCESSFULLY is very difficult.
Many again claim false success.
And if you think a proclivity to gambling makes a successful financial trader, you are very much mistaken.
Lori.
You and others have explained nothing in reality.
You have stated vague principles and strategies.
There seems to be a bit of a mob mentality on here.
Not a particularly good sign on a gambling forum, where perhaps more of a contrarian instinct would be a better trait.
Anyway I've given up essentially on the matter.
I will continue to poke and prod, but with no real aspirations of finding out anything meaningful.
Too bad really.

And if you think a proclivity to gambling makes a successful financial trader, you are very much mistaken.

How about YOU provide some reasoning as to why this is so.

Seems that a bunch of simple calculations and known economic circumstances can be fed into a giant computer that eats numbers from various sources and tells you prices in real time.

That doesn't sound that difficult. or different.

You and others have explained nothing in reality.

I love it when you spend time helping folks and they just want more rather than offering thanks. Actually, no I don't.

froggy

correct poxy b