and the limits of achievability given well known liquidity constraints.

Betfair have grown into a £billion+ company taking a relatively small %  out of that liquidity Frog, I doubt a tenner a race, to acheive that £100K, will be too much of a burden on that liquidity

I stopped playing the game about 15 years ago. The machines seemed to have taken over but the last few times I've been in casinos there has been a proper shoe.

In answer to the original question, my guess would be that 500 individuals make 100k+ per annum. Just a guess, mind. And I would also guess there are several syndicates that make 10 million+ a year.

But people believe what they want to believe, me included.
We're not going to get any further forward on this particular subject, I accept that.
I will retire totally unconvinced and amazed in the general gullibility of people.
Nothing new in that.
History repeats.

I think you meant to address that to The Management.

Just to be clear. For some strategies, capital is not that important. For others, particularly ones that rely on partial or complete hedging, then capital is very important. Obviously, decent traders will do whatever makes them the most money.

Bayes
Yes I misdirected the post. Sorry.
I take your point about different capital requirements for different types of betting, but I'm still not anywhere near convinced that you can trade at the returns on capital you claim are easily possible.
One of he big problems that came out of the GFC is that the senior mgt. of all the banks totally underestimated the real amount of capital their "traders" were requiring and chewing up.
Now I know the parallels are not perfect, but the point is that generally speaking money makes money in any form of activity.
20000-40000% pa ROc is totally unheard of in history in any form of money making activity, in any sustainable sense that is, until now apparently.
Long live BF eh , in that case.

Frog, you're thinking of it the wrong way. Percentages are absurd because a good trader could turn 10 quid into 100k in a year, but it's not scalable. What counts is profit, not return on capital.

FINE AS FROG HAIR 19 Nov 10 18:27
If I was based in the UK I think I would be round at the gates of University College tomorrow trying to recruit a tem of financially struggling students.

It's interesting that academics tend not to find it easy to actually make money on the sports (or financial) markets, although they may be experts on, say, the underlying mathematics. I spent part of my earlier career in academia - and have been working with a team at a UK university over the past 12 months - and I have always been struck by their inability to put their theoretical perspectives into practice.

It's partly that in order to make money on the markets, you need (ideally) both an understanding of the mathematics, and experience with those markets - experience which takes quite some time. I've read tons of papers by people working in machine learning, who claim to have uncovered a statistical blip in some market or other, but who wouldn't have a clue how to profit from it, because they don't have the sort of in-depth understanding of market behaviour that can only come from years of experience.

The other reason, simply, is that most academics lack the b@lls to actually take any sort of risk!

"only 1k"

Frog all i can add is that i have spent time and been around people who make a lot of money on here consistently, been to numerous betfair events and there is a core group of individuals who are always there/invited over the years - i guess there are also others who i have not met as they don't attend these events. Bayes sums it up really, a trader/bot operator could probably quite easily turn £1k in to 100K over a year but would not be able to turn £100k in to £10M the following year. Starting capital and bank size are really irrelevent to most traders/bot people to be honest. Also frog if you are a Forex or CFD trader and therefore have access to leverage of you have £1k but 50x leverage therefore able to take a £50k position and your position profits to the tune of 20% (£10K)then you have made £10k from an intial outlay of £1k or 1000% - now according to your thoughts this is impossible or very un heard of!!!

FAFH, there's no reason why the media should be drooling over someone making £100,000 from £1k on Betfair.

If I opened a food stand with £1k and made a £100k in a year, do you think it would be international news??

These 'unbelievable returns' aren't that unbelievable on a small capital base. If you had £1k, what would you realistically estimate you could turn that into over a year?

Others have a much higher turnover ratio than me as well as a larger edge. I think Contrarian mentioned something about £2M per month bet volume. I operate with a much larger bank and turnover of about £1M and have a smaller return on that turnover. So it's easy to see how someone turning over x times as fast as me and operating with a larger edge, can very easily get returns that are skyhigh.

The one thing I have in my favour is that I can continue to achieve very good returns with a large capital base, so my ideas are more scalable than most.

I only do football large scale. I imagine there are people out there getting similar returns as me, or even much better, and on top of that are also making money from tennis, horse racing etc. A lot of the time my money is just sitting there. There is so much scope for improvement in my own approach that it seems silly to doubt the figures mentioned.

^
So my conclusion is that in theory at least, if I can make 100%+ per year (2010 is lower than this, but the average holds), only on football, betting manually, nowhere near as efficiently as possible, then someone out there, could be:

-using better models
-using their money more efficienlty across a number of different sports
-turning over much faster
-turning over much more (even with less capital) placing many more bets using automation

etc.

There's really no reason why this person wouldn't be able to achieve returns that are many multiples of what I make.

And I would strongly suggest that you should maybe one day quietly assess just how " lucky" you might have been in the past.

I'd imagine most successful gamblers do this on a regular basis. Betfair provide enough stats even to those of us who don't use automated analysis to be able to calculate some simple SDs and so on to assess exactly that.

Investor
I do like your posts honestly I do.
They are not strident, and well argued.
I think I could live with people claiming to make very high returns oon capital, maybe into the hundreds of percent as you imply you are doing, it's the 20,000-40,000 % levels that don't gel with me.
People talk about trading as if they at least get out whole or in small profit all the time.
Now surely that can't be true.
Even the best gambler in the world can't get it right all the time.
Now if people are doing locked in arbitrage type trading then that can be the case, but that ties up capital as you know and the opportunities are not that plentiful or ripe for picking.
Pure trading where you spot a price and hope to trade out of it advantageously later IR or before the off, is largely a hit and miss game surely. You just hope to win more than you lose.
It must be very hard in advance to predict likely up and down swings in profits in trading sessions, and must be hard to forecast the capital you might even need.
Sports betting on value pricing is essentially trying to forecast the future from the past.
It's not truly analytical in the sense that stock picking is.
It's very much a guessing game that can, and does, frequently goew wrong from totally unpredictable things happening on the pitch, or the court, or the race course or wherever.

By: FINE AS FROG HAIR When: 19 Nov 10 20:56 Investor
I do like your posts honestly I do.
People talk about trading as if they at least get out whole or in small profit all the time.


Again, I don't know where you've seen this (other than the guff in the footy forum) but it would be nice if true.

I can empathise with Frog's difficulty in understanding what's possible on Betfair.  People in the real world are used to a certain way of doing things and anything outside the 'norm' they find difficult to comprehend.

Like many of the posters on this thread I also started out with a nominal sum, just £250, but through time and effort you can find an edge which if managed properly can grow in line with your stakes.

I'm not in the 100k+ bracket but I realise that there are people on here that are.  How am I so confident? The simple fact is that Betfair and the betting exchange concept is still relatively new.  With that comes inefficiencies (especially in-play) as not all bases have yet been covered and and with that come the opportunities.

Have faith Froggy. It can be done but it's not easy and if you are not prepared to listen to those who have already walked the path then you will struggle to reach the destination.

FINE AS FROG HAIR     18 Nov 10 20:01 
Contrarian
People keep saying that but imo it's off dreaming with the pixies.
I have yet to see any real proof that 100K a year can be made with 20K of capital.

75k this year off roughly 20k capital, and I've still got alot to learn

You've already had it explained to you Frog. 20,000% on 1k is not remarkable in any business. 20,000% on 1m is!

Sustainable and predictable I should have said.
You say it is. I question it.You can't or won't prove it because you will have to give away your edge. I accept that as reasonable from you, and maybe one or two others in particular if also in HR, but it leaves us in limbo obviously.
I say not achievable by any known historical value parameter/ measurement/yardstick for financial returns.
For Ponzi schemes maybe, but that's all.

What's the secret to your success mc chicken?