My dillemma.

Hey there, not a full timer by any means in fact only been at this a few months but just from what you posted mate it seems like you all ready know you want to step up your game and take a little bit more of a risk and are just waiting for someone to give you the push in the right direction!

just my 2 cents why not try increase slowly or on the bets you feel safer about or in very small incriments until you find you cant cope lol!

Best of luck anyway

McChicken
You sound psychologically prepared for the step up.
Just go for it if you seriously believe your betting methodolgy is sound and proven..
Divide your bank in half, and start staking the max amt possible for that half bank.
If you lose it all, you will still have a fallback position, in the sense that you won't be out of the game entirely.
Once you start staking bigger amounts you will soon get comfortable with them and will wonder why it took you so long.

There is two thing s which you have said yourself which are really the only two things that are worth considering

1)  If it ain't broke , don't fix it
2) For me anyway record keeping is a must... I would be lost without it.

Maybe you could up the stakes a little but I would rather understake than overstake.  You will never get away with over staking long term.

Good luck with what you decide but since you started the fred don't forget to let us know the decision!!!!

hello mr sandwich.

from your post, you know what you need to do (increase stakes) so the real question you're asking is how to go about it?

I would suggest, gradually. if you're staking 0.5% now, and it's consistently working, you probably want to get up to at least 1.5%. but psychologically/emotionally it's going to be easier to do that in increments. maybe 0.1% at a time till over a period of weeks you get to a consistently higher stake level.

that way any increased losses won't nail you back in your comfort zone.

My 2C worth,

It sounds like by increasing stakes, you will increase your stress levels. Ask your self, is it worth it?

I don't keep any records. I just follow my methods, all of which work reliably. Those that don't I have dropped. IMO records are only useful if they help you make future decisions. What decisions will records help you make?

Froggy, losing half of his bank is what chicken is trying to avoid......
I think you have already demonstrated to the forum that you are in need of advice and not in a position to be dishing it out. Especially, with plans of going wild with half your bank! I'd even go so far as to say that chicken sounds unprepared for the next step. It would appear that he is preparing though...... That makes both parts of your post tosh.

Viva has the right idea. For most people, its not a linear relationship between stress and bet size. A small increase in stakes can lead to big increases in irrational behaviour.

That's the question, if I am mentally prepared to up the stakes and up the risk. One of my biggest strengths has been my consistency week to week and being able to avoid taking many big hits.... but I suppose if I analyzed this then I'd see that I was too often choosing to avoid risk at prices approaching bad value. Anyway, It's pretty tough to know if I could manage risk as effectively if I suddenly doubled my stakes, I personally doubt that I could think as clearly.

The fact that I keep no records, and that I trade extensively inplay makes my betting/methods pretty damn difficult to quantify and to assess what I should be doing to progress

The answer might well be starting to keep records and then looking more analytically at what I'm doing in the future (although I doubt I'll ever be entirely clinical) combined with gradual incremental increasing of stakes till the point I get to a level I am content with.

All a case of psychology vs method I guess, even doubling my stakes now wouldn't be unfeasible in terms of getting bets on in most markets, so that isn't an issue.

I don't post much on here, but read some good, thought provoking stuff on betting theory which has helped drive me to consider if I'm getting anywhere near to maximizing profits without taking on an unreasonable level of risk..... and as you've read I've pretty much concluded that I am not, I'll aim to get there eventually, but it may well take a while.

Baldloaf
You're right about the fact that I seek advice as much, if not more, than I give it out.
However, in this particular case, I believe the OP has to a certain extent " frozen in the spotlights" and needs a bit of relatively extreme shock tactics to move on forward.
If not 1/2 his bank, then a 1/4. Irrelevant really. It only has to be material and not insignificant in that he doe feels he is taking real risk and is really putting his methodology to a real stress test.
Otherwise he is just spinning wheels and will never build up any real momentum to get to a level of making good levels of money.
I know talk is easy, but I have always tried to get out of my comfort zone when betting, not in a silly, irreversible way, but in a way where I will feel some pain if things start to go pear shaped.
Only then, and only then, do I know or feel I know that my confidence in my methods is sufficient for my personal circumstances.

I know talk is easy, but I have always tried to get out of my comfort zone when betting, not in a silly, irreversible way, but in a way where I will feel some pain if things start to go pear shaped.
Only then, and only then, do I know or feel I know that my confidence in my methods is sufficient for my personal circumstances.


Variance would be your enemy here though

Not really.
Variance is what Im talking about when I say that I will feel some pain if  things go pear shaped.
Can I live with it in the sense that whilst it is something I theoretically projected, can I actually live with it if and when it happens ?.
Some people on here talk about betting on through the pain of losses and downturns, but when it starts to occur they actually either cut back their bet levels or run for the hills completely.
Neither of these reactions are OK if you're really intent on proving the validity of your methodology.

Hello there McChicken.

It appears that you really want to up your stakes but deep down you just can't bring yourself to do this at this stage, which I can totally understand. If you can't convince yourself then I doubt others telling you to do it will convince you either.

I would say record keeping is the way to go. It doesn't have to be too extensive but if there is any way that you can record what you are doing how much you are winning/losing and also comparitive records detailing what you could be winning/losing if you were trading at the levels you would like to be then i would say do this. Unfortunately the brain is not perfect and is prone to certain biases when it comes to how to gamble/trade (well mine is anyway). A classic example would be people remembering the 1.01s that are overturned and not remembering all those 1.01's that then went on to win.

Suffice to say that some kind of record keeping would definately help confirm your suspicions of what you could be doing better and it could be the incentive for you to up your stakes when you look back at your records and "see what you coulda wun". If it transpires that what you want to do isn't as effective as you thought or it carries too much potential risk, then nothing lost. If you're doing ok as you are then why rush it, make sure you get the facts i.e. potential risks/rewards of what you want to do before you do it.

Anyway that's my advice, feel free to take it or laugh and ridicule it.

By the way if you are not fully utilising your BF bank and you always have a certain amount just sitting in there, then you could consider transferring this to somewhere where it can at least get some interest, but where you can transfer it back to BF pretty quickly if you need it. Plus if your account here gets hacked then there is less money to go missing. This could also get you more psychologically used to trading at a higher percentage as well without increasing your risk.

Not really.
Variance is what Im talking about when I say that I will feel some pain if  things go pear shaped.
Can I live with it in the sense that whilst it is something I theoretically projected, can I actually live with it if and when it happens ?.
Some people on here talk about betting on through the pain of losses and downturns, but when it starts to occur they actually either cut back their bet levels or run for the hills completely.
Neither of these reactions are OK if you're really intent on proving the validity of your methodology.


This is a major reason to bet within your comfort zone. Everyone's different but psychological comfort shouldn't be underestimated in this game.

I can tell you this fact.
None of the really truly successful big time gamblers, and I include here the major hedge fund mgrs., stay within their comfort zones, psychological or otherwise.
They're as twitchy and as nervous as can be at most times.
When they feel nice and easy with their positions, that is the time of danger and complacency.
If you're running your system(s) at levels where the losses don't really hurt then you're kidding yourselves.
You've got to start feeling real pain to know if you can take it and bear with your system through good times and bad.
The rest is all just a form of paper trading, not real in the sense of having any real meaning.
For sure build up from a low capital base, if you need or have to, but don't stay their for any longer than is absolutely necessary.
Otherwise you will become effectively risk averse, and that will gain you nothing of import in the long run.

"--don't stay there--- "

And yes big time hedge fund mgrs. are gamblers at heart.
Pretty much all of them are expert poker players in their spare time.
Look at Thorp. He started out in casinos.
Soros plunged deep and hard on the BP when the time was right.
The list is endless.
It's not all risk free arbitrage in that business. It's putting your money where your beliefs are.

Many markets on here aren't scaleable and sometimes you think a market can take larger stakes and it soon becomes obvious, once you start putting your larger stakes in, that it (the market) starts behaving differently and larger stakes means a, sometimes, far smaller return due to this.

That's true but you won't find this out usually till you start to actually do it.
Theory is fine and well, but at some time you have to start to suck it and see.
Fear of failure is as bad as failure.
Successful investing or gambling is not about avoiding risk but managing it.
One thing is for sure. You will not make large profits by never taking large risks.
Not large stupid risks, but large intelligent ones.
And you won't win them all either.

froggy, the big gamblers in this world are not usually gambling with their own money.
I think chicken is doing just fine as he is. Stakes can be upped naturally over time, often without you noticing. The moment you consciously make the decision to place a larger bet, your judgement comes into question. Then what are you going to do? Trust your instinct and not place the large bet or trust your original instinct?
If chicken is as steady as he says he is, the variance (see buzzers post) may well get him the moment he takes a larger risk. Not a clever way to be dipping ones toes.....

Baldloaf
Own money or other people's money, should make no intrinsic difference.
The point is that if you make small losses you tend, subconsciously at least, to treat them as being bearable and thus relatively unimportant. This is dangerous and ultimately misleading.
If you take a relatively big hit, you tend to look very closely at how and why this happened. This is a good thing to be doing.
You need to keep on your toes and be focussed at all times, and having " real pain " money at risk is the best way to do this.
Gambling for small or comfort zone stakes is nice and relaxaing, but it is something you have to get out of the habit of doing.
Of course I'm talking about if you want to try to make a living out of all this, and not just punt for recreational purposes.
Money makes money. That's a fact in the investing world and in the gambling world.

sorry, FAFH, but I think this is terrible advice.

inflicting a catastrophic loss on yourself is not the way to scale up your betting or expand your comfort zone. just as you won't cure a fear of snakes by letting a poisonous one bite you.

Didn't say catasrtophic viva.
Just something that really hurts in a meaningful sense.
It's still all about risk/reward ratio. I'm not saying dump that basic tenet.

if he does what you suggest then examines what went wrong, he'll come to the inevitable conclusion that he overstaked.

how is that going to make him feel more comfortable about staking more?

Why do you say he will have overstaked ?
Because he lost. Surely not.
Gambling or investing, no difference.
It's got to mean something real for it to have any real meaning.

Also the bottom line is that you really have to get as used to losing big as winning big, if you're ever going to be a substatial long term winner on here or elsewhere.
It's all swings and roundabouts, you have to accept that and be prepared and able to live with it.
Small comfort zone bets or investments are just delaying the inevitable step up you have to make, if you're ever going to be a winner.
I have had some really horrible, traumatic losses in my financial life and from every one I came out as a better investor.
Sports  gambling is, or should be, no different.
Maybe in the really modern age there are a few examples such as Aye Robot who  apparently have succeeded big time without ever experiencing major setbacks.
But if you operate on the basis of becoming one of those very select few, I would say that the odds are very much against you.
Take risks and manage them successfully. That's the best most of us can hope to do.

Stop it, your too funny!

Weak response Baldy.
Getting to you am I ?

FINE AS FROG HAIR Joined: 12 Mar 07
Replies: 2171 10 Feb 11 18:43 
Why do you say he will have overstaked ?
Because he lost. Surely not.
Gambling or investing, no difference.
It's got to mean something real for it to have any real meaning.

----------

if he blows half his bank I think it's pretty much axiomatic that he's overstaked. which actually is the main way people blow up in the financial markets too. it doesn't have to "mean something real", it has to be right.

the only thing that has real significance is his long term p/l.

Viva
Btw I didn't say putting 1/2 his bank on one bet.
I just said stake to a level appropriate to maximising( say) 1/2 his bank.
I agree that you don't increase just for the sake of it.
But if you wade around in the shallows for ever, you're never going to learn how to swim.
At some stage you've got to commit yourself in a meaningful manner.
Anyway we're all probably just debating semantics here.
Nobody disagrees surely that if you're going to start to win good money on here you have to start taking real and substantial risks, not theoretical and/or insubstantial ones.
It's basically an oxymoron to say that you are risk averse by nature, but you want to be a successful gambler.

You can stop the immaturity too.

Giving poor advice is bad enough. Refusing to understand why your advice is poor makes you a bit of a charlie.
Your posts are naive, contradictory, misinterpreted, ambiguous, condescending and ultimately misinforming. It makes you look like a wannabe. It makes you look like a blagger.
Little tip for you. Resorting to playground tactics highlights a lack of strength of character.

Also viva, long term we're all dead.
Short term, or at least medium term profits, that is money earned and soent in our lifetime, is all that really matters.
I know guys still pouring money into new investments with long term ( 20 year) prospects and they're in their late 60's.
Crazy in my opinion, unless you're planning to leave it all behind for others to spend and enjoy.

It's basically an oxymoron to say that you are risk averse by nature, but you want to be a successful gambler.

-----------

no, it isn't. the key to succesful gambling or investing is risk management; which is about taking the emotion out of the process.

McChicken,

Partly depends on your financial/domestic situation. When I started out trading about 12 years ago, I was in my mid 20s, generally single, and free of responsibility.

Nowadays, I've got the whole domestic set up in London (2 kids), and my outgoings are pretty high. I just wouldn't be comfortable taking the sorts of risks that I used to. I know that if I were still 'free'(!), then I'd be pushing the envelope a bit more.

i have my own software and i put in a factor to multiply all my bets, P&L and market volume by.

i know that when you stick to certain stakes for a long time you become psychologically tuned to reacting to those numbers and increasing your staking is very very hard.

i still deal with my old numbers, but everything is ramped up in the background.

of course, there's no guarantee that the value you're getting at your current stakes is available at larger ones. you may also have to start factoring in market liquidity sometimes

FAFH - you mention that fear of failure is as bad as failure i'd have to disagree. In this instance fear of losing you bf fund is not the same as losing your bf fund. The difference is your bf fund.

I know that your probably going to say that if you don't ever try it you'll never know but as Contrarian mentions it really depends on your financial/domestic situation. If McChicken's circumstances mean that if he loses his stake (or half of it) he's completely stuffed, unable to support himself and his domestic situation whilst not being able to get any other work and this was sole means of income, then fear of failure is an extremely useful protective mechanism.

If he also has a job and no expenses and a surplus of money then maybe he might be in a position to try and if he fails be able to try again. It would be wise to at least find McChicken's situation out or at least take this into consideration before advising McChicken to do anything too rash.

In a lot of other circumstances fear of failure keeps us alive much more than the sensation of "feeling alive" by taking a risk.

UA
You and Contrarian are absolutely right that it's horses for courses.
All I'm saying that you will not succeed if you don't try.
Now in the OP's case, he has apparently truly extensively tried and tested his methodology on relatively small stakes.
At some time he has to step up to the plate and start swinging.
In his testing, both real and theoretical, I would hope he has established some idea of potential return on capital figures.
Therefore he really only needs to work back from that.
eg if he has established that he thinks he needs a capital base of 20 K to make ( say) 10 K a month, then he simply says that next month I'm really going to test this ratio out.
He might say he's going to try to make 1K next month, so he goes all in appropriately with a 2K bank etc etc.
He fits it to suit his needs and circumstances.
But at some point in time he has to up his stakes to levels that matter and count.

Viva
Read some literature on the most successful hedge fund mgrs and tell me they take all the emotion out of the game.
No way Jose.
I agree it's all about managing risk, but it's also about taking calculated risks. If there's no downside then there is usually no, or at least very limited, upside.

no, he doesn't. what he "has" (read: would be better) to do is increase his stakes to the  proportion of his bank that theory suggests is correct for someone using his strategy and with his track record.

that's as true for someone with a bank of £100 as £1m.

Viva
If I have established through sound testing techniques that I am likely to need a certain bank if I want to make a certain level of profit, then that is what I should be testing out real time with real money.
Theory is fine up to a point, but at some stage practice has to take over.
I believe John Kelly, the inventor of the Kelly staking formula, didn't truly convert his theoriy into real money.
Maybe he didn't care to, but is that the point here.
The OP wants and presumably needs to start to make real money( he can spend) out of his " discovered" strategy.
He therefore needs to get going at some point in time, and the logical, practical way is to back his beliefs intelligently using the risk/reward ratios he has quantified ( I hope).

Btw you can do a hell of a lot more with a larger bank than with a smaller bank.
As a simple example, a smaller bank will be wiped out much quicker if the min. bet size of 2 units is disptoprtionately too large a starting point for your system.
You can also divide your larger bank into a number of smaller banks and test out different systems within each smaller banks. In other words give me a larger bank any day of the week.

it's the same as any game. the correct play is the correct play, irrespective of how much you want/need to win the game.

what you're talking about is a variant of setting targets. you're saying his staking should be determined by how much he wants to make. it shouldn't. it should be determined by circumstances intrinsic to the game say it should be.

I only labout the point because it's exactly macho talk of "coming out swinging", "stepping up to the plate", "stakes that count" that leads to blow-ups.

I thought you were into the macho think el presidente.?
Anyway let's agree to disagree.
I'm not stating my way or the highway.
I'm just giving my personal view on what I think is logical and correct.
And also I,too, was in the OP's position once, and what I'm suggesting he should do worked magnificently well for me.
No reason why it shouldn't work for him, IF he has really done his testing objectively and has not indulged in fake post mortem tweaking and backfitting.

And I disagree it's a variant of setting targets.
It's setting stakes based on the level of the bank you decide to commit unreservedly.

FINE AS FROG HAIR Joined: 12 Mar 07
Replies: 2183 10 Feb 11 21:41 
I thought you were into the macho think el presidente.?

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

not me. i trade from behind the sofa.

You and Murbarak eh ?

DStyle

i have my own software and i put in a factor to multiply all my bets, P&L and market volume by.

i know that when you stick to certain stakes for a long time you become psychologically tuned to reacting to those numbers and increasing your staking is very very hard.

i still deal with my old numbers, but everything is ramped up in the background.

I like it, very clever.

FAFH, my betting has gone a bit past the testing stage, and despite my cowardly ways I am making what I consider to be a significant amount of money on here relative to the average yearly wage, so I don't plan on doing anything too crazy, or going out of my way to feel the hurt too often

Some good stuff on this thread, still getting through it.

Mc Chicken
You had better ignore everything I have posted, because I am reliably informed that it is totally naive,contradictory,misinterpreted,ambiguous,condescending, and ultimately misinforming.
Though apart from that,everything else about my posts are fine.

"==is fine ".
Err maybe the grammar is not so good either.
And the intent, and the lies and the deceit.
I mean why stop ?

Take it easy frog, fwiw your input is fine by me at least :)

Maybe my posts should come with some sort of financial health warning ?

I appreciate you input FAFH. Always good to get some different perspectives.

You know maybe I should either begin or end all my future posts with the acronym
WTPMBBFYFH. Warning this post may be bad for your financial health.
Nice and catchy eh ?

Watch it boys your responses may start to go to my head, and I may become conceited as well as condescending.

Also remember I'm a frog.
I'll jump all over you if any of you get on the wrong side of me.

There used to be a pub down the road called the squashed frog :)

McChicken, sounds like you are not staking using Kelly (or even a derivation of it).   Do yourself a favour and start right away.

No, I'm not shiraz, but surely kelly is easier to apply for someone who at least keeps records of their betting...

I obviously try to adjust my stakes relative to the amount of perceived value on offer, but all in my unorganized way of doing things. I considered that inplay my betting is often too instinctive to attempt to apply kelly.

Fair enough, obviously you understand the concept and if you were to use a bit more data it may assist with your dilemma because you could better quantify your perceived edge.

I haven't read through the whole of this thread so this may have been covered, but I'll directly address the OP's question:

There is something you'd do well to remember: On Betfair your edge is always effected by your stake in an inversely proportionate way. In other words, if you make your stake bigger your edge will decline. The extent to which this happens depends on which markets you're betting in and how you're doing it, but it is a basic fact of all BF markets none the less.

Imagine plotting your stake against your return on a graph, you'd put your stake along the horizontal axis and your profit on the vertical one. You would get a curve which rises to a flat peak and then begins to decline, eventually ending up below zero. That's because in the beginning the loss of edge is more than offset by the increasing stake, but eventually the increased stake damages the edge so much that your overall return ends up lower. The exact shape of the graph will depend on the markets you operate in and your strategy - but it will always be some sort of "hill shaped" curve.

Your job is to find the point on that line just before the peak, that's your optimal stake. Getting this right is one of the true "black arts" of Betfair. One way to get there is to raise your stakes VERY SLOWLY until you find your returns tailing off a bit, then go back down a slightly. The other way is to try to model the line and test various points along it with stakes at specific intervals- but that's pretty difficult especially if you're not using bots.



There are many reasons why that curve exists, but just to show you that it does exist think about some possible points on the graph:

If you bet 0 you win or lose 0, so that's where the curve must start.

The smallest normal stake is £2, if you bet just £2 you are most likely to get the best odds - even if there's only £2 available there. That must be where you get the best percentage returns, but not necessarily the best overall returns. Assuming that you have a positive edge the line on the graph must have come up from zero to get to this point.

At the other end of the graph imagine trying to get a stake of a million pounds on, if you wanted to get such a large bet on any event you'd have to accept smaller odds - so much smaller that your edge would have disappeared and probably become negative. Your overall return is now below zero, so the line must have come back down from it's peak somewhere after £2.

That's enough to tell you that you're dealing with some sort of curve, and wherever there's a curve there's an optimal point on that curve, that's what you need to find.


If you go through this exercise properly I guarantee that you'll be surprised by the results. I've spent quite a long time working on it in my specialist field (IR GGs) and when I first worked out just how small the optimal stakes were in various scenarios I was amazed. The key to successful betting is almost always MORE bets, not bigger bets. During the peak of my betting last year I was accounting for a measurable percentage of all IR liquidity without ever putting more than £30 up at a time - and usually much less.

Wise words there Mr Robot, as usual.  I would just add that 'black art' is indeed an apt term for trying to pinpoint optimum stakes in an environment where your profits are going to vary significantly by the nature of the business.  In fact it probably makes small changes to the stakes pointless as any effect they have on profitablility will be hidden by the likely variance over the test period.  Perhaps you would need to do a sum to work out how much you'd need to change the stakes by in order to have a noticable effect on the profits taking into account some kind of average variation in fortune.

Better still, do what I do.  Try and work it out, cry a little and then go with your instinct!

aye robot,

Best post ever on this forum.

Good post aye although I think it applies more to gambling than trading. I once analysed my betting and found the average stake I had on winners was only 70% of my average stakes on losers (that's not to say they weren't profitable overall and, who knows, that may even have been the optimum staking). That's like having 30% of every winning bet voided which is probably to be expected betting on a sport (UK horse racing) that's corrupt to the core.

Better still, do what I do.  Try and work it out, cry a little and then go with your instinct!

An option not available to me - crying would short out my circuits.

It applies to trading.

I trade relatively low volume markets a lot and make good regular profits. I know the only way I can increase profits is to increase the number of markets I trade, and there are practical issues with doing that. Increasing my bet size would start to bias the odds against me in the way robot describes.

^ entirely agree.

totally agree with aye robot, i thrive in the number of bets i make, the more the better and i also agree with the poit of view of FAFH

but i'm also aware of that "hill shaped curve" even if i find that sweet spot i'll vary along it, why? because my state of mind isn't always the same and so i use different levels of exposure, i like to think of them as "gears", i like to be below that optimum level so that when i need i can change a gear and also to still have a gear to change to

but to get to know this you need to push yourself out of those confort levels and that will obviously hurt in the beginning but you'll soon get more confortable with it

i always remember that series "The band of brothers" where you have that private that goes hysterical blind with fear and freezes,he can't get himself to shoot one single shot and then the officer comes in and says "son, your problem is that you still have hope, hope you will survive, you need to understand that you are already dead, and when you understand that, then you can start to function like a real soldier and maybe then you'll have a chance...hell the all war depends on it!"

so Chicken start moving those stakes up, slowly

the problem with optimal staking when betting in play is that you have to dynamically assess the market's liquidity and that can vary hugely between different matches of the same nature. what might work on a round 1 grand slam match on a televised court may not work on a round 1 grand slam match on a non televised court.

That's true, and it's one of the things that make this thing difficult. It's a good job it is difficult though, because if it was easy a lot of people would be able do it and then it would become more difficult. Wait.....

It applies to trading.

I didn't say it didn't but I'm assuming if the guy has the option of increasing stakes then the volume is there (unlike on your low volume markets). As a gambler, the more I stake the more I'll (generally) shorten the odds for further bets. As a trader, you're the opposite as, with your opening bet, you're actually pushing the market in the direction of your closing bet.

I trade relatively low volume markets a lot and make good regular profits. I know the only way I can increase profits is to increase the number of markets I trade, and there are practical issues with doing that. Increasing my bet size would start to bias the odds against me in the way robot describes.

Sorry, scrub that last para which was part of pxb's post that I forgot to delete.

to each its own The Management

let's see if i can make this more simple to grasp... if there are 6 "gears" and i bet like McChicken i'll only use 1st gear, i'll use it for so long that at some point i'm incapable of even thinking of going into 2nd gear, it's just too hurtful even thinking of doing it
so you will be happy with your small returns and feel so happy looking at your balance knowing that it's just there to do exactly that, to confort you but never to be used
i'll tell you this i never, never use 1st gear or the 6th gear but i'll use every other gear depending on the situations that i'm faced with, i'm not a Bot and thats my advantage

Now, you say that my words are revealling, revealling of what? maybe that i'm the type of guy that made all my profits from a super small bank and built it up to a nice level or that i'm the type of guy that had 100k and comes here and makes 1 or 2% a month

i hope this is also revealling

Feck N. Eejit Joined: 10 Jan 02
Replies: 2858 11 Feb 11 12:54 
It applies to trading.

I didn't say it didn't but I'm assuming if the guy has the option of increasing stakes then the volume is there (unlike on your low volume markets). As a gambler, the more I stake the more I'll (generally) shorten the odds for further bets. As a trader, you're the opposite as, with your opening bet, you're actually pushing the market in the direction of your closing bet.

I trade relatively low volume markets a lot and make good regular profits. I know the only way I can increase profits is to increase the number of markets I trade, and there are practical issues with doing that. Increasing my bet size would start to bias the odds against me in the way robot describes.



Your next post to scrub had to be on the ball there feck

lol buzzer.

aye robot,

Only just seen your 09:13 post.  With regard to the downward side of the "hill", if you just offer a price (that you consider value) and stake (whatever you decide), isn't that the optimum?

If the bet all gets taken, keep staking by all means (to your limit for that particular bet).  If some is unmatched, don't chase for lower prices (unless they are still value).

If my bank keeps growing I will probably get to a point where bets are only partially matched.  It seems obvious to me that in these cases the markets will be "saturated" (not sure this is the right word here) at the prices I am interested in, and so I will need to look at additional markets to increase profits.

As ever your thoughts would be appreciated.

Mgt
As usual, I always take refuge against any and all criticisms of my point of view, never my dogmatic advice btw, by sneaking a peak at my various bank/gambling/investment accounts.
Then, and only then, can I return to the fray.
Btw, the points made by Aye Robot on here do not destroy any of the principles of my comments.
Everyting you do on BF is axiomatically governed/ restricted by liquidity constraints.
Anyway the OP was not actually talking about how to optimize his stakes to optimize his returns, merely to get himself psychologically geared up to risk more of his capital to try to increase his returns, if and when such opportunities present themselves to him.
Frm the sound of things, he is far away from trying to optimize his returns, if he has trouble in even trying to increase them marginsally.

Wayne, to some extent that can be true - but there are several reasons for the decline in value relative to stake that you should think about. Aside from getting the best odds also consider what's know as "the winner's curse" for example - I'll explain it as it applies to auctions first to get the concept across and then explain the relationship to gambling (which you may have already spotted).

The theory says that when you buy something in an auction the price you pay is usually too high. The reason is that in order for you to "win" an auction everyone else in the room has to think that you're paying too much - you are the only person who thinks that what you're buying is worth that amount. Obviously in the real world there are all sorts of circumstances where you can buy things for good prices at auction, but you see the theory - and there is evidence that it's borne out. For example look at E-bay, I'm very often surprised at how much people pay for things on ebay. The other famous example of people over-paying at an auction was the government's amazing sale of the 3G bandwidth contracts to the phone companies, although that's also explained by some very smart game theory used in the construction of the bidding process.

Anyhow - think about how that same kind of logic can apply to gambling. In exchange betting people bet on the their opinion, this is the basis of the exchange. For some-one else to take your bet they have to think that your price is wrong. The more you get matched for the more confident the market is that you are wrong. If the market is very confident that you are wrong then it's more likely that you are indeed wrong - so the more you succeed in getting matched the less you should trust your pricing. The strategy you outline above is likely to see you getting little matched when you've accurately picked a value price, whilst your whole stake gets matched when you've got it wrong.

Just as well John Paulson didn't follow this type of thinking when he was setting himself up for his huge sup- prime mortgage killing.
His " bets" were being accepted by some of the biggest investment banks in the business, and the more he asked for the more he got ( to his huge relief).
If you absolutelt believe you're right, you back your beliefs big time.
If you have any reservations at all, you hedge your positions appropriately, by scaling back, by diversifying etc etc.
Is, or should, sports gambling be any different ?
Of course it's hardly ever, if ever in fact, that you can spot such apparently totally mispriced scenarios, with such apparent min.downside risk, as  Paulson was able to do in this example, in the world of sports betting.
But the principle of believing in yourself, in believing in your methodology, to the degree that you back it for substantial sums of monies, rather than peanuts, is essentially the same.

I took huge offence Mgt. Can't you tell ?
But my cocoon of confidence bore me through.
No I don't think many, if any, stock brokers could make it on here.
Nor investment bankers.
Just the genuine proprietary traders and the quants.

If you absolutelt believe you're right, you back your beliefs big time.

There will always be exceptions FAFH, but most of the time you're not the exception, you're the rule. As far as gambling goes - most of the time if everyone thinks you're wrong then you are indeed wrong.

aye robot is right, as I found out to my detriment in 2010, when for the first time I saw my edge evaporate (temporarily at least) due to getting x matched when I'm wrong, and getting a fraction of x matched when I'm right.

There are exceptions though, where larger staking can give you a larger edge as well. An example that I was able to exploit heavily in the past was backing as odds increments change.

Say there is £3k at 1.06, and £3k at 1.07. As time passes odds will move to 1.05-1.06 (this relates to unders in a football match when no goals are scored).

Let's say time has passed and now there is £500 at 1.06 and £2.5k at 1.07. You think 1.06 is now a fair price. You back it for £5k, so that you get £500 matched and leave £4.5 first in the queue on the other side. This is where your edge lies. Someone only staking £500, would not be able to profit.

You only have to beat the odds cosistently.
That means of course you will have many big losses, more than compensated by your winners.
The point is that you will lose a lot of the time, but it doesn't mean you were wrong necessarily in making the bet in the first place.
Your mentality in this game must include no fear of losing.
I don't mean that you don't care if you lose ( the opposite in fact should always be case), but that it doesn't stop you from backing your beliefs in the methodical manner/strategy you have researched and developed.

Aye Robot's rule still applies, in that if you bet £100k on £500k at some stage you will start to lose money. I'm just saying that it isn't always the case that edge decreases as stake increases.

There are always nooks and crannies Investor, but it's a sound general principle. Actually I'm sure you agree with that.

But is this all actually what the OP is asking for advice/opinions on ?

aye robot,

Thanks for your reply.

I stake in proportion to my bank so there is a sort of built in feedback loop.  If my higher stake bets are wrong I'll lose, lowering my bank and therefore stakes on the next bet, and vice versa.  At the moment my combination of being right/staking must be working (because I'm in profit overall), although I'm certainly not in Investor's league!

Of course I agree Aye!
As I've tried to deploy an ever increasing amount of funds on here (manually!), I've had to figure out ways of dealing with the massive downside of large stakes. So far I've been only moderately successful.

A market like match odds in football can absorb huge amounts of money, but then you need to deal with the variance. As my balance has grown, the Match odds market has become more and more important to me, and has been the most profitable market type for some time, although returns are very volatile.

Well I'm sure I've said it several time Investor..... come on... automate!

I'm trying

FINE AS FROG HAIR
Date Joined: 12 Mar 07
Add contact | Send message
When: 11 Feb 11 15:03
But is this all actually what the OP is asking for advice/opinions on ?


I expected to get some good advice, which I got, and that the thread would move in a more general theory direction. There's only so much advice anyone could give me without being able to know my betting in depth. Anyway it's all good stuff.

Indeed good thread, I particularly liked the bit where Feck admitted that he had turned to the dark side and finally revealed that he was in fact a Calmeiros, ferengi, parasitic sc.um even if it was only for a minute. Only joking Feck. Apart from that there was still some interesting stuff.

FINE AS FROG HAIR Joined: 12 Mar 07
Replies: 2217 11 Feb 11 14:41 
Just as well John Paulson didn't follow this type of thinking when he was setting himself up for his huge sup- prime mortgage killing.
His " bets" were being accepted by some of the biggest investment banks in the business, and the more he asked for the more he got ( to his huge relief).
If you absolutelt believe you're right, you back your beliefs big time.

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

The trouble with this is, when people win with that approach everyone notices and they're stars. When they get wiped out, they're footnotes. It's like watching a hedgehog being interviewed about how it knew it would make it across the road safely. The trick is to ignore what it's saying and count the roadkill in the background.

Financial history is littered with people who were so convinced they were right they felt they could suspend risk management.

Viva
I have never advocated that one should ever suspend risk mgt.
You can manage risk just as well being aggressive and bold in the mkts, as being passive or meek.

[...]"As far as gambling goes - most of the time if everyone thinks you're wrong then you are indeed wrong."

-----

amen.

I suppose a few of the so called contrarians on here would differ with you on that " cliche " ?
They all claim to walk to the beat of a different drummer.

the biggest leaps in your profits (not the majority of the profits... just to make it clear) comes when you have positioned yourself against that colective wisdom, obviously you can't do it every single time, only at very well selected situations. No "Bot" in the world will give you that type of returns or bet

There is only one place where you can draw that type of decision from, and thats your inner guts (feeling, gestalt,.. call it whatever you want), but a well supported, tested kind of decision... a few here make their living going against that majority "flock" effect, i don't for the most part, but i do it from time to time when the opportunity arises... if you don't buy the ticket you can't ever win... big

my World Cup winnings, was a case study (for me) of that situation, i made loads against all the general perceived wisdom, in the beginning at least, the market eventually adjusted as it would be expected. Spain won the World Cup and never managed to score more than 2 goals, which was the exception (the two goals in a match, i mean) not the rule ... 1 goal from the Spanish team was the rule.
Spain is the most obvious example but the World Cup was, overall, a low scoring event especially in the group stages

I must admit that this type of situation (going against crowd wisdom) is more achievable if you're really focused on a single team/league/Competition and you limit yourself from outside inputs as much as possible, it gets even more likely with a pretty short time span

for me, first you need to learn the basics, then the stats approach and stay there for a long time, after a while you'll start to get alarm bells about some type of events and thats when your feeling comes to play

i believe in the human "feeling" effect, we are a powerful computer, we just can´t put into the written form but most of our greatest achievements came from this unwritten ability, of course that like everything else, this works for the good and the bad or in this case to build your bank or destroy it

if i used an automated approach to my betting i would always be in "fear..land", why?, because there is so much things out of my control that any change in the rules could at any time completely destroy my so called "edge", in my case, a football match is a football match, the rules of betting may change but not the way the game is played and thats where i thrive

btw, if the winners here are only 0.5% or 2% or whatever, so much for what "everyone thinks"

Bold post from Lusi, the Portuguese man of war.

But a wise one.