rarrar

A quick update from me on the trading front.

I'm very happy with progress so far. Just one mistake which is down to undisciplined betting. I had a straight punt on Frankel at Ascot which came in nicely however I then thought that it would be a good idea to bet on the heavy favourite the next day too but So You Think was unable to deliver...

Having discipline and sticking to the strategy are going to be vital areas that I will have to control if I am to achieve this ambitious target so I will resolve to never deviate from my trading strategy again.

The results so far are 24 trades, 17 have been successful and 7 were losers. If I was using level stakes this would put me 3 pts up and my edge after 24 bets stands at 6.25%. If my 2 straight punts are removed from these stats then I would have 16 winners & 6 losers and an edge of 9.1% which is very close to the 10% level that I expect it to be at (and need it to be at).

In terms of bank progress this is much slower and it currently sits at £21.29. Many people would be disappointed with such a small profit from all the effort analysing trades. I know that if I can maintain my edge that I will eventually go on a long run of winning trades and my bank will grow significantly and quickly.The Snapper refers to this as a "logarithmic frenzy" as Kelly staking keeps you in the game long enough to hit a winning streak. Check out this post by The Snapper where he explains exactly how Kelly staking works http://community.betfair.com/thesnapper/blog/2011/06/12/it-reduces-the-betting-to-a-coin-flip

So my job is to look after the EDGE and I'll leave Kelly to work on the BANK, there's not much to show yet but we'll get there because the Maths is on our side.

I've been away visiting some friends so it's not been possible to post all of the trades I do but as & when I can I will. It's much easier for me to put a quick update on twitter than post a full blog about each trade so follow @rarrartrading for daily updates.

Ok so yesterday I was 1/2 which produced the inevitable loss of 1pt for the day. The frustrating thing is that this loss was avoidable!

I mentioned that I am new to this, see what date I joined betfair over in the right hand column! Now making a mistake is fine in betting & in life, it is making the same mistake a 2nd time which is a crime that I will be punished for so I need to find out why & not make the same mistake again.

From my early analysis I'd identified 3 trades for yesterday. The 1st was Milnagavie in the 14.00 at Doncaster. When I was looking to place my bet the horse was priced at around 7.6 which was slightly lower than I wanted. I was looking to back for a price of 8.0 to then lay at about 5.2. It then turns out that Jinxy tipped Milnagavie in his blog here http://community.betfair.com/jinxy1/blog/2011/06/12/looking-for-a-trade-in-the-first

This was viewed by over 500 people & of course the price dropped like a stone from there! So I decided not to bet as i couldn't get the price I wanted. But I was happy because my analysis had given me the correct horse to trade on.

My 2nd tip of the day was Solemn in the 14.30 at Sailsbury. Now Jinxy said in the comments of his 1st blog post that he was going to tip Solemn but had backed out of it because of the soft ground...

By the way I'm definitely not making it up that I picked the same horses as Jinxy! You can see my blog post here at 14.21 http://community.betfair.com/rarrar/blog/2011/06/12/solemn-in-the-next-at-sailsbury and Jinxy's comment was after at 14.58 http://community.betfair.com/jinxy1/blog/2011/06/12/looking-for-a-trade-in-the-first

So the analysis was correct I just didn't get the message about the soft ground in time! Solemn did run well but he didn't do well enough with the ground, it would have been the easiest trade in the world in the dry but sadly I should not have bet & it cost me.

So we have a new rule to add which is obviously, if the going changes..all bets are off!

The final trade for the day was Norville in the 15.25 at Doncaster, I saw that he was over priced pre race & he actually moved in enough for a trade prior to the off which was nice. However, even he didn't run well in the soft ground so it would have been risky letting him go in play.

So I'll dust myself down & move on knowing that I have new knowledge that will save me losses in the future, I think this is what a betting strategy should be like, constant tweaks & revisions to improve the model that you are using.

The rain kept coming down late into the evening where I was yesterday so the ground is sure to be pretty sodden for a few days. I'll be taking a day or so off until things firm up some more and looking for some good selections later on in the week.

So all in all a costly but valuable sunday :-)

Gota be quick for this one.

Back Solemn at 8's in the next at Sailsbury Solemn, Lay off at 5.2.

He should hit the front early on & stay for long enough to give us a trade.

Ok so I'm new to this and one of my biggest weaknesses is knowing what price to take on a horse. Should I take an early price because I think that the horse will shorten up prior to the off OR should I wait until the last minute just incase the price drifts and I don't want to risk taking a price that's below the SP?

The answer to this is not concrete, I will make a decision based on what I think is right, if the horse is over priced I'll take the early price but if I'm not sure I'll usually wait until just before the off before placing my back bet. The thing is that I cannot make the right decision all the time, markets move on information and not all the players in the market are privy to the same information. Something can happen in the paddock or the stables that someone has seen & reacted to which will drive the price lower or higher. To account for this I've established a rule for my self when I've backed a horse & the price starts to drift substantially.

I've selected my horse to trade on based on all the information available to me so I still believe that the horse will shorten up in running, but I'm only expecting
my horses odds to fall by around 1/3rd from the SP or the price I've taken (which ever is higher). So if the price drifts more than a few points higher than the price I've taken I will look to exit this trade for no profit & no loss, ie get out for the price I've taken & move on.

In betting there are no such things as missed opportunities. There is always another horse, another race where a trading opportunity is available. The way to make money in this business is to minimise your losses. This minimisation of losses will help preserve my edge and by having a hard & fast rule to stick to when a horse I pick inevitably drifts it takes away any judgment calls for me to make in the "heat of battle" under the pressure of a market that's going crazy in the minutes before the off.

Cliffnotes: If the price drifts - Abandon our 1pt profit target & look to exit for break-even

Ok so day 1 of this journey is complete. If anyone did follow my tips on here & on twitter you would be 4/4. I actually had one extra trade at the last minute which I didn't have time to post but it went on to loose. Anyway you you are 4/4 and I'm 4/5!

The results trades were:
15.55 Chester - Light From Mars traded from 18 down to 8.2
175.30 Sandown - Ahtoug traded from 12 down to 7.2
16.00 Bath - Witchry traded from 6.0 down to 1.89
17.30 York - Collect Art traded from 6.0 down to 1.08!

If you'd traded those you'd be 4 pts up. My loosing trade was:
17.10 Bath - Duneen Dream I backed at 7.0 and needed a trade price of 4.6 but he only traded to 5.6 so this gave me a loss of 2pts leaving me with a profit so far of 2 pts.

Now it's important to analyse why my horse didn't trade and plug any leaks in my selections as I need a strike rate above 66% to make a profit and higher than this to maintain my required 10% edge. Duneen Dream went out ahead to lead the field as expected and as I wanted him to, however..

The horse was allowed to run too freely and quickly pulled out 5/6 lengths on the field with another runner. Maybe the jockey thought he was going at an ok pace because this other horse was with him but these two went miles clear over the 1st half of the race and the market KNEW that it was too fast. As they went further & further ahead the price actually increased and as the market expected the rest of the field reeled them in during the 2nd half of the race.

What I needed to happen was for the horse to take the lead but run at an acceptable pace to retain the lead further into the race. It was an 11f race & I just needed him in with a shout after about 9f for the price to drop. So it was a bad ride from a jockey that hadn't been onboard him before. I believe that I would choose this horse again and it was just bad luck that he didn't trade. This bad luck is built into all my calculations though and as of today on the very small sample size the edge stands at 20%, I don't expect it to last though.

Even more good news is that if every day is like today I will reach my £100k target in just over 100 days as the model suggests it should take 431 bets.

A word on Kelly staking. I am using full Kelly stakes as advocated by The Snapper (check out his blog, it's a must read). I treat every trade I make as a bet with odds of 1.5, because I'm staking 2pts in order to win 1pt profit.  So long as my edge exists Kelly stakes will ensure that I never go broke and will also ensure that I maximize my profits so I reach my 100k as fast as possible. For a 10% edge and placing bets with odds of 1.5 John Kelly tells me that I should bet with 20% of my bank on every bet.

So starting with my £20 bank this morning it hit a high today of £26.22 following the 3 wins before falling back after a loss & a win to finish the day at £23.45.

Here is a screenshot of my Profit & Loss for today.




And here's a screenshot of my final balance today, remember I've just deposited £20. Lets see how big this balance can grow!


Over & out.

Rarrar

Witchry the favourite in the 16.00 at Bath has just drifted slightly out to 6.0 which I think is enough to give us a trade. Back for 2pts and Lay off in play for 3 pts at 3.95 to give a profit of 1pt.

This horse traded successfully for me last week and has traded 6/7.

Ok here's my 1st tip & 1st bet for the blog.

Light From Mars in the 15.55 at Chester likes to race at the front and has been available to trade in 8/9  previous races. He hasn't covered this distance before however if he's at the front with 2f to to the price should have dropped sufficiently for us to get a trade out of it.

Currently backed at 18 for 2pts leaves us a trade off price of 11.5 to gain 1pt profit all round.

NB. There is a slight danger of the favourite Opera Gal taking the lead which is the only reason I think that Light From Mars wouldn't trade. Opera Gal would be my tip to win the race but I don't like her price as she has to run very well for us to get a trade so I don't think there is value here.

Hello & thank you for visiting my blog.

I am going to attempt to do something that I think would be pretty incredible but also something that I strongly believe is possible & that I can do. I want to turn an initial deposit of £20 in betfair into £100,000. This will be possible because of my "Edge" which will mathematically guarantee that this goal is possible. All I have to do is maintain this edge....that is the hard part.

The reason I know that this edge exists & is because I've seen it in action. I've been following fellow blogger on betfair Jinxy who backs a horse before the off with a view to trading in play when the price shortens. You can read his tipping blog here http://community.betfair.com/jinxy1/blog.

The basic strategy is to back a horse for 2 pts and then when the price shortens if the horse runs well lay it off for 3 pts to give you an all round profit of 1 pt.

Here's an example:

If we say that 1pt = £10

We would back our horse "Tradeplease" for 2 pts IE £20 at a price of say 10's (decimal odds). I know that to make a return on my investment of 50% that I need the odds to drop by 1/3rd or by 33%. I will then put a LAY bet in the queue at a price of 6.6 for 3 pts which is £30. I will check the "keep in play" button so that the lay bet is still offered after the race starts. I am then hoping for my horse "Tradeplease" to run well so that the price drops to 6.6 or below. When my £30 lay bet gets matched I will have an all green positive position on the race of +£10 regardless of whether my horse goes on to win or not.

Now the way I hope to turn this £20 into £100k is by using the most aggressive staking plan possible. This is the Kelly Criterion developed by the master of gambling John Kelly. I you can see Kelly staking at work by following another Betfair blogger The Snapper who is using it to buy himself a house in Florida, see The Snapper's blog here http://community.betfair.com/thesnapper/blog

The Snapper will tell you that John Kelly tells you to bet with a % of your bank according to your edge. Now what edge is possible for me to generate?

Jinxy is the master of the in-play trade. He recorded an edge of 30% in May on his tips and is so far UNBEATEN in June. Now to put this into context a 30% edge is enormous, so ridiculously big that if someone had came & told me that this guy was achieving a 30% edge over the market that I wouldn't have believed them. Is his edge sustainable? Possibly, I actually think it may be.

I will be researching my own trades as well as following Jinxy's tips and my target is to maintain a long term solid edge of 10%. If I can maintain this edge I my Kelly Calculator tells me that if I follow the model exactly I should be able to reach £100k in just 431 trades. It's a simple 12 step process of doubling my bank each time. If I double my bank 12.3 times I will reach 100k, it sounds so simple when put like that.

Of course I don't know if I can do it. I don't know if I can achieve a long term edge of 10%. I don't know if I have the discipline to stick to all the rules I set out for myself when making my trading selections.

But what does it matter, I'm only going to deposit £20, I could spend this in 2 hours down the pub. I'm risking an amount of money that is inconsequential to me but which has the potential to deliver an enormous amount which would totally change my life.

So I don't know if I can do it but I do know that IT IS POSSIBLE.

I'll try to post my trades & tips before so that people can follow them if they wish. I'll also put them up on my twitter, I'm @RarrarTrading & you can follow me here http://twitter.com/RarrarTrading

I posted 3 tips yesterday & they all won, lets see how long I can keep the 100% record going for. It's sure to be a wild ride!