Getting An Overview

Hello,

today BNP Paribas Open 2009 in Indian Wells will start with the qualifying round. Later this day the main draw will be released.

I have not visited any of these big tournaments so far, so I have a look at Live Search Maps of Microsoft to see those great tennis facilities.

  (Click on image to enlarge)

In over 100 cities in the United States, Canada and in over 80 European locations, a bird's-eye view offers aerial photos from four angles. These Pictometry images are much more detailed than the aerial views from directly above buildings. Signs, advertisements, pedestrians, and other objects are clearly visible in many bird's eye views.

Have a nice day!

Cheers, Loocie

Free Money

Hello,

today first round ties of the Davis Cup 2009 took place and I had a look at the match Crovoi v Safin:

Marat Safin was heavy favourite pre match, so I watched the set betting market closely.
Odds on Safin 3-0 were around 1.70-1.8x. Liquidity was not the best, so sometimes there was no lay odds available. Often in low liquidity markets I place bets higher or lower than the true odds. When back odds on Safin 3-0 was 1.76 I placed a back bet of 15€@18.0 on Safin 3-0 and… GOT MATCHED!

But I was not the only one who took advantage of this mistake by another trader/punter.

I think this could only happen, if you look for short position trades and if you trade with the common standard grid interface. I am pretty convinced the layer wanted to lay odds of 1.8 instead of 18. Another method to avoid such mistakes can be to have only two stake sizes in your Betfair account. If my trading bank has four figures I will only let two maximum stakes on my Betfair account (my current max stake is 77€) and put the rest of the money on a bank giro account.
Another reason for this was a post on the German Betfair Forum about account hacking. The Betfair account of the user was hacked by someone with an IP from Bulgaria and all the money from his account was backed and layed in several markets. Betfair does not take responsibility for something like that, so all his money was lost.

Betfair provides the possibility to restrict your login from certain geographic areas, so you can take advantage of this feature, if your internet service provider does not route your connection through servers in other countries.

The user also logged in with a user name he used in other forums too.

So what can you do to avoid account hacking:

• Use a special user name only for Betfair
• Use a secure password (try a password generator)
• Do not let your whole bank roll in the Betfair account
• Make use of the account restriction of Betfair

How to avoid punting on wrong odds:

• Use a trading software with a ladder interface
• Let only two stakes in your Betfair bank roll
• Look for long term trades, so you have enough time to double check the odds and the stake sizes

These listings do not provide completely security, but I think it might help to minimize risks when trading.

Stats so far:
Total profit since last update: +79.10
Total profit this month: +79.10

Cheers, Loocie

Days Off

Hello,

these  days just one WTA tournament in Monterrey takes place, but I will have some days off.
The main focus for March is on BNP Paribas Open Tennis Tournament in Indian Wells and on Sony Ericsson Open in Miami, so no need to trade these lower class tournaments.
On Friday the first round ties of the Davis Cup take plays and there we will find some good matches. I will take this matches to observe the set betting market in matches with a heavy favourite. Generally odds move not very much when the pre match odds on a favourite is 1.1x (match odds market), so the action takes place in the set betting market. These Davis Cup matches will also be an indicator of the shape of the players for the next big tournaments.

That’s it for now.

Cheers, Loocie

Analysis Of February 2009

Hi,

another month is over, so again it is time to analyse my trades. In February I traded on soccer and tennis.

Trading Soccer
The screenshot above is from my trading excel sheet. Since July 2009 I track as much data as possible. Keeping records help you really much, because you can have a look at trades from the past with a more objective view.

Total loss trading soccer: –18.22

Trading Tennis
number of markets I traded: 30
number of wins: 18
number of losses: 9
scratched trades: 3

number of wins > 3€: 14 
number of losses > 3€: 8

total win: +204.90
total loss: –75.16
total pl: +129.74

average win: +11.38
average loss: –8.35
average pl: +4.32

win rate: 67%
max win: +27.48
max loss: –17.14

I am still making mistakes, when trading, but I recognize them early and stick to my rules. My maximum loss was –17.14, which was 6.16% of my trading bank (€278.39). The stats above indicates I am on the right path.

Total profit trading tennis: +129.74

What is the conclusion of February 2009?
Trading soccer was not very successful, but trading tennis worked really good. At the start of 2009 I set myself a goal to achieve €1000 profit on trading. I will stop doing experiments with other sports than tennis. If I stick to my rules, it would be much easier to achieve this goal and if I achieved that goal, I will setup a 2nd small trading bank for discovering other markets. I am really interested in trading snooker, darts, golf and basketball.
I made +€111.52 (increase of 40% of my trading bank) during February 2009, so this is the best performance since I started the blog.

My new stake sizes:


Using stakes like €77 instead of €80 or €55 instead of 50€ can give you a small advantage, because you can type these figures faster. It is not a big advantage, but sometimes this can be the difference to get matched or not. It is also easier to the remember figures like this.

Overall stats:
Year 2008: +€156.48
January 2009: +€28.39
February 2009: +€111.52

Cheers, Loocie

Impatience

Hello,

during the last few days I traded the following matches:

It is not the amount I lost that annoys me, it is more the way I lost this money. I did not trade well these matches. In the match Simon v Santoro I forced the trades. I missed an opportunity and tried to identify trading points, when there was not really an opportunity.
When trading Andreev v Ferrer I identified some good opportunities, but I had to scratch them all.

Stats so far:
Total loss since last update: –24.84
Total profit this month: +111.52

Cheers, Loocie

Interview With A Tennis Trader

Hello,

today I will publish an interview I had with a tennis trader:

Hi PR, thanks for taking the time to have this interview. Tell us please a little about yourself.

I am early 30’s and live in the Asia region but was raised in the US and have started various businesses on my own. My current full-time "job" is my own company that is based in the Asia region and that is my first priority with some new businesses on the way. This fund I started is dedicated to trading on Betfair as I believe Betfair trading deserves a serious look, so I have committed the funds (and have some prelim investors) to do a test run where I test different approaches and also the depth of the liquidity on a daily basis. Academic background wise, I have degrees from U Chicago and an from MIT where I did extensive Excel and similar programs doing statistical analysis, financial modelling, and data mining.

What was your first experience with betting or trading? How did you become a trader?

I was with friends watching a soccer match and in an attempt to impress the girl I was with, I laid a ~$200 US bet on a team (which subsequently lost). It probably was a great hint that I should have stopped outright betting at that moment.

Did you had a mentor when starting trading on sport events?

I did not, but I have contemplated being a full-time trader for investment banks, so I have friends who run their own trading firms or have their own trading desks in investment banks. From there, I was able to get a bit more info on the trading life and the mechanisms behind a profitable trading operation.

How much time do you spend each day on Betfair?

Too much time. I think right now if there are events running, about 6-7 hours. My entrepreneurial life allows me to basically focus on Betfair full time. But I think an important aspect that is often overlooked is to have the stamina and attention span to give it your all for the full trading session when you are seated. You don’t want to just miss opportunities because you are unfocused. At the same time, too long into a trading session and you (well, me actually) will get sloppy.

Which sports do you trade on?

Primarily tennis, but running some tests on footy as well as one of the xcard games.

Do you use any trading software?

I use Bet Angel. I think it’s a good product, but I will probably switch after I am done with this current subscription because there are some limitations to it that annoys me and for tennis trading, the functions needed are simple so there’s no point paying for the excess features I don’t use. There are a lot of formulas and functions that are based off excel I use, so it would be best to find a way to integrate it into my future program of choice. I imagine I will probably hire a person to integrate the excel code into a Betfair API for our use.

Would you describe yourself as a sports trader or punter?

I started as a punter because I didn't realize that the idea of "trading" existed. Even though I sometimes saw the opportunities to move positions off in-play, the vig on the bets were so large that it was not worth it. I also happen to have friends that work in the bookmaking industry where they set odds and they had mentioned that many bookmakers sell their risk to others and adjust odds to hedge risks. I thought it would be a good idea to start a site where you traded risks amongst bookmakers thinking it was an unknown business, but then I took a closer look at Betfair and realized that’s what they ultimately did (I imagine some of the market makers in Betfair are probably themselves and other bookmakers). Making the transition to trading was easy as I use to bet 200-300K USD per week , so the swings of going up and down 10-30K US a week was very normal. Now, with per bet maximum risks at about 250 USD – 300USD (as I am still perfecting the trading model), the biggest down is relatively negligible in my mind.

What is the most costly lesson you made during trading sports?

Too many. I was up $20,000 US from outright betting after basically having a perfect day. Thinking I was invincible, I didn’t do any research the next day and basically brought that figure right back to 0. I think the name of the game is always discipline in money management. You need to always hold your money with a clenched-fist so that you don’t drip profits by being sloppy. Beyond that there have been more than a million occasions – it seems – where I held onto a bet too long while trading.

Do you remember your best trade you ever had?

Not really, because it’s a repetitive move. You buy low, sell high, and the idea is that you do it well enough so that it’s about the same result all the time and that it should keep happening. If there are memorable trades I don’t know if it’s good. Because it usually means something unexpected happened in the result where the trade came your way when it shouldn’t have, or you were trading an obscene amount for the risk (not as planned).

Are you reading other blogs about sports trading? Do you have a favourite blog?

I read most of the blogs linked through your website and the others. I really like Juicestorm and F1 Flutterfly (sp?) because they really take a more professional approach to it and have made it a science. I am of the opinion that Betfair will see a bigger influx of “professionals” who will treat Betfair –rightfully so – as a typical marketplace and start running models on the stats and trends and bring more quantitative science to this market.

Do you only trade in play or do you also make straight bets?

I trade in-play more, I think the swings are faster and there are more opportunities. This as oppose to staring at candlesticks and trying to pick up a few ticks pre-match. However, this is not to disapprove of those who do that. I think some have great capacity to do that, and they have clearly demonstrated it through their blog posts. For me, I don’t have the patience to grind out mini-ticks as that was one of the reasons why I didn’t even bother with working at a normal trading desk where stocks still moved too slow. I might sometimes take a trade pre-match thinking the odds will rocket down, but more often than not I am wrong.

Can you tell us something about your risk management?

I am still learning it. But basically there’s never a bet beyond 2% of my bank (which is currently around $20,000 USD), basically I always keep in mind the maximum exposure at any time and make sure it’s under 2% if it’s in correlated bets (2-0 set betting and set winner are correlated bets). But the problem is that different bets have different probabilities of winning and losing part-to-all of the amount. So there has to be further adjustment. For example: Laying 1.9 with $1000 US does not have the same risk as laying 1.03 with the same amount. In the first case, a 10 tick slide is acceptable, about 10%, in the second one you lose 1/3 in just one tick down.

What are the rules you follow to get into a trade? Is it weight of money, following a trend, trading within an odds range etc?

I look for value, but it’s usually based on odds that deviate largely from their original starting position. You need to have faith in that bookmakers know their odds well, so even though a match may start with the underdog wining the first set, probability says that the outcome is likely to gravitate back to normal (or at least try to – where you would still capture profit). Of course, it’s a bit more than that, but that would be a summation of the basic strategy (a common one). You can’t apply central limit theorem to an individual player as he is a player, and not a number, but when you consider the consistency of bookmakers to find the odds where the value is 50/50, then you can apply CLT to the probability of the performance running as planned (by the bookmakers).

How do you handle losses?

Poorly. But I think I am getting better at it. The idea is to keep the amount small enough where it doesn’t impact your ability to make decisions. This is critical in trading, as when you lose your “feel”, it affects your ability to function and decide as your normally would.

Do you have any contact to other traders via email, msn or something else?

Nope.

It seems that you are trading with large amounts on Betfair, so I assume you are affected. What do you think about the new premium charges of Betfair? Have you thought about moving to other betting exchanges like Betdaq or WBX?

I think the premium charges are stupid. It is, as others have already said, Betfair bullying their customers since they have a virtual monopoly. I think it would be great if the big traders and market makers actually talked to each other and then made a concerted move to Betdaq or another exchange – I actually didn’t even know of WBX. The problem now is that to move to those exchanges is suicide because the liquidity is well short so it causes problems in trading with the gaps between bet and lay.

There is no intelligent way Betfair can justify the increase. They can argue you take money from the market, but that happens anytime someone bets (one person has to win, and one has to lose. In that sense, the suggestion that traders taking away money (and thereby discouraging punters from staying) is false because we traders help generate large purchasing in the markets. The only way Betfair really loses on this model was if Betfair itself was the market maker on both sides, and hence takes a loss once we arbitrage our position out. Anyway, long story short. If this was in a business where the customers were bankers and ivy league/Oxbridge types rather than “gamblers”, there business image would have been permanently tarnished and numerous complaints headed straight to the government for monopolistic practices.

In just one sentence: What do you think is the secret of successful trading on Betfair?

Solid strategy with discipline.

Thank you very much for taking the time and answering all the questions.

Cheers, Loocie

No Need To Rush

Hello,

during the last few days I traded the following matches:

 
I traded on 7 markets with winning on two of them, losing in one market and 4 scratched trades.

The loss from Tipsarevic v Cilic match do not bother me. I followed all my rules and took the stop loss before the tie break of the 2nd set. I traded out at odds of 1.55 on Tipsarevic. Early in the tie break odds on Tipsarevic moved to 1.4 and I can imagine my feelings, if I would have been still in the trade.
There is no need to rush in a trade or forcing a profit, when there is no opportunity.
I kept a cool head and could produce a nice profit in the match Ljubicic v Ferrer. Overall the day ended in a profit.

During the last few days I met a trader from Hong Kong, who is also making money on tennis. It is always nice to share ideas and thoughts with other traders about trading in general and about trading on tennis too.
Soon I will publish an interview with him, so stay tuned!

Stats so far:
Total profit since last update: +16.14
Total profit this month: +137.52

Cheers, Loocie