Trading and how to protect your bank through year

Sorry i meant not supposed to risk

need to get your maths sorted

1000 quid at 4% a day for 31days is £3373

after 365 days its £1,648,803,285

u reckon liquidity you can put a billion pound on ?!

Trade to a liability you could bear losing if your puter freezes, site goes down etc - this will happen every now and then over time. Don't lose you bank. Also Trade at a level that the liability of a bad trade is not enough to make you lose your cool and make bad decisions in the split seconds you have to exit the trade or so that a loss causes you to chase losses. Bet size is not just about maths - it is about psychology as well.  All sounds easy on paper until the bad event happens and the race goes in play in 3 seconds and you are tempted to wait just a second more hoping it comes back your way and then it doesn't etc etc.  Smaller stakes make the right decision easier for most punters.

if i use too much of my bank i get worried in play

ill come out too early , get edgy etc 


bet the amount that stops you feeling those things an thats where you start an increase from there as you get used to betting with more an more money!

if you just go with 1000 out your 5000 an lose , you will not come back so easily as first thing is you wil chase an that not good idea an you may even lose the lot very quick

T It would do no harm to have an account with the Dublin firm if you are Trading if the site goes down G/Luck

Would also be wise to have bf's phone number written down somewhere quick and easy to get to, so if your internet goes (which may be more likely that the BF site crashing), at least you can phonebet to try to resolve the situation.

rs1 im not compounding daily im compounding monthly and am aiming for 1% per day.

thanks for the replies I guess there really is no surefire way to eliminate risk entirely.

U.A I didnt realise I could still get a phone bet on if the betfair site goes down. That seems to be the best solution

actually maybe instead of a premium charge betfair could introduce some form of insurance. For a monthly fee your covered against outages.

I don't know if you can, it was a suggestion for if your internet goes down rather than theirs.

Note down BFs and your TAN number , a couple of times i've lost internet connection and had my position closed out within a minute

You,re dreaming..

Impossible to make even 1% pd.

some obvious things that spring to mind:

*have a completely separate second way of accessing the internet, eg second computer and dongle or 3G phone.

*have accounts with other bookmakers/exchanges.

*find a way to accept in advance that as your bank increases, losing x% of it will seem progressively more of a big deal in absolute terms. 1.5% of £100 is a cup of coffee; 1.5% of 50K is a round the world air ticket. that's just the way it is and unless you find a way to live with it, you'll find that you hit a ceiling.

A Tale of Two Sports Bettors
Risky John and Conservative Bob each started the season with $1000 - their bankroll. They both decided to play the same games throughout the season but they couldn't agree on how much to place on each game. John was more of a risk taker than Bob so John decided to bet about $200 per game (20% of his bankroll). Bob was more conservative and decided to risk about $50 per game (5% of his bankroll). Risky John figured that if he bet more, he could win more. And he was right. In week one, their picks went 4-2. John was up $360 while Conservative Bob only won $90. John was very pleased with himself.

Week 2 produced the exact same result. Risky John now had a $1720 bankroll while Conservative Bob was up to just $1180. John was very happy. He encouraged Bob to bet more but Bob wasn't so sure about that strategy. What if their luck started to turn? Risky John preferred to think positively. Besides, they were 8-4 and they knew what they were doing! The first two weeks had proved that.

But then came weeks 3 and 4 in which they went 2-4, 1-3. A bad run for sure, but not uncommon during a 16-week season. In fact, losing streaks are inevitable and guaranteed during a season. Conservative Bob lost $235 while Risky John gave back $940. John now had a lower bankroll than Bob! John was now down to $780. Risky John felt the losing couldn't possibly continue so he stuck with his bet size of $200 per game. The next two weeks they went 2-2 and 1-3.

Guess what? Risky John was now virtually wiped out - down to $280. Bob, meanwhile lost $360 on the terrible four week run but still had $820 left over. One of them was virtually out of money, the other had over 80% of his original bankroll left.

What happened next? Well, John quit. And, the unfortunate four-week run was followed by a great 3-week run where Conservative Bob went 10-3 and another 8 weeks of hitting a very respectable 56% on average. Bob ended up the season at over $1300 - an increase of 30% on his initial bankroll.

The morale of this story is obvious but very few sports bettors practice it. Don't overextend yourself:

Law of Betting: Don't bet too big for your bankroll!

*find a way to accept in advance that as your bank increases, losing x% of it will seem progressively more of a big deal in absolute terms. 1.5% of £100 is a cup of coffee; 1.5% of 50K is a round the world air ticket. that's just the way it is and unless you find a way to live with it, you'll find that you hit a ceiling.

I think you get conditioned to this though. Losing £1k in 2006 would have had a far greater emotional effect on me than losing £20k today.

If someone wanted to give me odds of 2.1 on an unbiased coin flip for a £1k stake, I would take it and not be too concerned whether I won or lost, knowing that I made a rational decision. This is the kind of thing you learn to expect. Short term swings, long term profits.

This is from the Office for National Statistics:

Risk preference and time orientation

Respondents to the survey were asked two questions aimed at determining their risk preference and time orientation. The results show that people were predominantly averse to risk and had short time horizons financially.

More than three-quarters (78 per cent) of people said they would choose to receive a guaranteed payment of £1,000 rather than take a one in five chance of winning £10,000, while 22 per cent preferred the option of winning £10,000.

Similarly, 80 per cent of people said they would rather receive £1,000 today than £1,100 next year, while 20 per cent said they would rather receive £1,100 next year.

-------------------------------------------------

78% of people would refuse this huge +EV bet. Yet surely many of these same people buy lottery tickets, place the odd bet and/or go to the casino.

I don't agree that taking the option of £1k now instead of £1.1k the following year is in any way an indication of a short financial time horizon though. I would take the £1k, despite having a long term time orientation, because I would expect to make far more than 10% over a year.

Investor
Did all the people given this + EV opportunity have the same amount of capital in the bank when they were surveyed.
Surely that's an important fact to consider in assessing the answers.

I'd agree with you if the bet was for £100k now or a 1 in 5 chance of £1M.

But £1k is a small enough amount of money that even someone on a below average wage would be completely rational in taking the bet. That's the key, it's an emotional decision for most. That's why most people make bad gamblers.

The survey I got this from is: Wealth in Great Britain
Main Results from the Wealth and Assets Survey 2006/08


Median household wealth : £204,500
Mean household wealth : £367,600

£1k would therefore represent only a tiny portion of net worth for most of the population. I think taking the £1k would only be a rational choice in a very small number of cases.

somebody did some research on primates a while back that suggested they feel a material loss as much as a material gain that was twice as large.

in other words, we're hardwired to be cautious.

viva, I would say it's not so much caution as a bias to a favourable outcome.

In this case it may seem like caution, but it's also been shown that people generally favour a 90% chance of losing £100 over a certain loss of £90.
So people are willing to take risk for a chance to avoid an unfavourable outcome.

Cut profits and let losses run seems the most popular course of action.

Put the telephone number of the Betfair telephone betting service in your mobile is a good insurance. It's a while since I used it but according to which operator you get they're pretty good, if you tell them to roughly even up a position they can do it.

*find a way to accept in advance that as your bank increases, losing x% of it will seem progressively more of a big deal in absolute terms. 1.5% of £100 is a cup of coffee; 1.5% of 50K is a round the world air ticket. that's just the way it is and unless you find a way to live with it, you'll find that you hit a ceiling.

So true......

Try losing 20k in a day and see how u feel then

The Investor : I'd agree with you if the bet was for £100k now or a 1 in 5 chance of £1M.

But £1k is a small enough amount of money that even someone on a below average wage would be completely rational in taking the bet. That's the key, it's an emotional decision for most. That's why most people make bad gamblers.

I would take the 1k now, as it's a one off opportunity not to be missed. If it was an offer I would recieve again and again, I would take the 1 in 5 chance each time.

On the subject of risk, here's a nice little test for you... "Risk Intelligence Quotient (RQ) is a measure of a person’s ability to estimate probabilities accurately. People with high risk intelligence tend to make better predictions than those with low RQ".

http://www.projectionpoint.com/index.php

I did it last year and scored 99, and just scored the same again :)

"The RQ score ranges from 0 (low RQ) to 100 (high RQ). Your RQ score is 99. Such a score is very high".

I'll give it a go later Trevh :)

I don't understand your logic.
Are you saying that if you saw £1k available  at odds of 10.00 on Betfair and you knew it should be 5.00 you wouldn't take it if your only option was a straight bet?

Because that's what it comes down to. It's just a bet like any other, except in this instance you have an incredibly large edge.

^
If fact it's better than in my example, because there is no commission to be paid.

just took that test. seems to be a combined general knowledge and cautiousness test.

I got 76%, so I bow to your superior general knowledge and cautiousness!

Investor, I would take the bet in your scenario all day long, but I don't see this one off offer in the same light, I see it more like this...

A new company called BetsRus has a choice of sign up bonus :

Offer A: A free withdrawable £1000 with no wagering requirements.

Offer B: A free £2000 balance, which must be wagered once at odds of 5.0 by choosing a runner on their virtual racing games.

I would still take the £1000.


Viva, the test isn't about knowledge, it's about risk assessment.

"This test is rather unusual in that you can score very highly even if you don’t know much. That’s because this test measures self-knowledge rather than factual knowledge. It rewards you for gauging your own level of uncertainty accurately, rather than for knowing a bunch of facts".

I know, but it's badly designed imho. if you actually knew all the answers to all the questions, you would score very highly regardless of your risk assessment skills.

also not sure how it can claim to gauge a person's self-knowledge. somebody who actually knew answers but was over-cautious, diffident, lacking in self-confidence etc would be indistinguishable from someone with an accurate sense of how confident they should be in their answers.

I wonder how it would score someone who put 50% for everything?

48 for me. Quite a lot of wrong answers that I had at 90% likelihood.

I came across this in a book called "the failure of risk management", never heard of it referred to as an RQ though.

Apparently this is a learnable skill, so if you did test like this frequently (obviously not the same questions), your score would improve dramatically if not already high.

I get that Trevh, you are taking other risks into consideration. I would think it is obvious that in the hypothetical situation mentioned there is assumed to be zero risk of dodgy practices or a fixed bet in terms of your choices [;)]