Wednesday, 18 March 2009

The Trouble With A Challenge

James, aka The Iron Horse, asked me via a comment on a recent post “So you think the £100 to £100,000 is possible? I might have a go at similar".

“What sort of % do you suggest and are the type of bets Alex was doing the right area/approach?”

My answer to this question was initially a resounding yes. Of course it is possible to turn £100 into £100,000.

However, having read some of the other comments, I suspect that the question being asked is really this. “Do you think the £100 to £100,000 is possible using a set percentage daily goal combined with all-in betting?”

To this, I would have to say no.

The subject of specific goals has been covered in this blog before, and I am not a fan of them. The only ‘goal’ is to make money consistently, but setting specific goals, whether it be £10 a day or 1% a week are unhelpful.

Alex rode his luck a little and turned £100 into £1,000 in just a couple of months. The problem for Alex was that he didn’t appreciate that he had been lucky. When you’re backing 1.05 shots, then yes, you will usually win, but approximately 1 time in 21 you will lose, and statistically probably before 15 bets. It’s easy to fall into the trap of thinking that an individual 1.05 shot can’t possibly lose, but they do.

This is not the way to go. The only way to consistently make money is to find value bets, use a sensible staking plan, (something based on Kelly would be my suggestion), and take advantage of the opportunity the exchanges provide to trade.

To make money from gambling requires patience and discipline, and when someone sets themselves a challenge similar to Alex’s (£100 to £100,000 in 367 days,) both these requirements go out of the window.

I’m not sure I understand this need for a ‘challenge’. It’s challenging enough trying to make money regularly from betting, without deliberately handicapping yourself even more. A fixed percentage a day is just plain stupid. You bet when there is value to be found, you bet a percentage of your bankroll, (no all-ins), and slowly but surely you will increase your bank.

It may certainly be more ‘exciting’ to go all-in all the time, or to have to find a bet every day, but that’s not the kind of excitement that is going to help you reach a goal. The kind of person who seeks a rush from his betting, is not the kind of person who will make money from his betting.

If the purpose is to entertain others with your tales of derring-do and bravado, well, that’s your choice. Alex is looking to attract readers to his blog, and on to his other web sites which is fair enough. His challenge is a kind of loss-leader and if he covers his losses elsewhere, then I can’t question his tactics, but if you seriously want to win money from gambling, you need to take a more disciplined, practical, and yes, boring, approach.

You need to be a nerd in fact!

And James – why stop at £100,000?


theBA said...

"The kind of person who seeks a rush from his betting is not the kind of person who will make money from betting"

well put

Anonymous said...

Great post mate,

Completely agree with the discipline and patience side of things. I am lookind into many forms of gambling in an attempt to find a market/strategy i can exploit!!

and why stop at £100,000?? why indeed mate.

I can dream!


Anonymous said...

The other day I put £100 on an 8-fold football accumulator. I did this because a friend of mine had started a new ratings system and the first 35 '8 pointer' teams had all won. So I figured that I had might as well cash in. The odds were 842.3/1. With 5 minutes to go only 1 team wasn't winning. Southend were drawing 1-1 with Brighton and on 85 minutes Lee Barnard made it 1-2 (and it finished 1-3) so there I was staring down at a £80K win (- potential premium charges as it would have only been 43.1% of the 60 week profit) but as it turns out I didn't need to worry about losing £13K as Crewe equalised against Walsall in the 3rd minute of stoppage time. Gutting.

Anonymous said...

Cassini - your comments section is a shambles - it only posted half of my comment! I'll have to write it all again now.

So following on - why is that relevant? It probably isn't but I think the majority of the challenges that are started on the Betfair Forum (and there are a LOT) are done by people who either do not make a profit or don't make anywhere near the level of profit that they're aiming for. With this is mind they realise they're probably going to fail but the two week course of 'patience and discipline' is interesting - its a challenge. Of course it frequently goes well until Senor Patience and Discipline meets up with Monsieur Smirnoff and then the next day its time to start again. Do I usually win £80K in a day? No, hopefully over 52 weeks, yes, but definitely not in a day. But the accumulator was a bit of fun on a Tuesday evening (because the only time watching Liverpool entertains me is when Gerrard doesn't come diving to the rescue - and thats not very often) and in the same way these challenges are probably just a bit of fun for their starters.

Most people don't gamble to put bread on the table like us, they do it perhaps to help pay for a holiday or even buy their partner a pair of shoes. Sure, they make it harder handicapping themselves further by setting a target - but thats why its called a challenge.


P.S. Re: Benford's Law my figures came out fairly similar to yours, only 2s and 7s were more than 0.4% out.

P.P.S. I placed the accumulator on a site where I would be premium charged because I would rather keep 84% of £100 @ 842/1 than 100% of 32p @ 700/1.

P.P.P.S. Sorry the rest of this was so rushed, I hope I made a little bit of sense.

Anthony said...

I agree with your comment wholeheartedly. Some people thrive on a challenge and there are current blogs that display that fact. However, as you say, a target is not for everyone. I struggle terribly with targets. If I don't reach any I have set myself it ruins my trading so I just try to make as much as I can and if I have a great trade/day/week/month I thank my lucky stars and try not to lose it again through thinking I'm invincible.
On your discussion of the 'backing 1.05 shots, I base my trading on the tennis on the fact that from odds of below 1.10 they are almost as likely, in the short term, to move higher as lower, as long as your entry point is correct. If you back at 1.05 for £100 you're only going to win a maximum £5 (less commission, less Premium charge). If you lay at 1.05 the opportunities can be endless.

Cassini said...

Thanks for the comments.

James - the opportunities are out there. What sports do you favour?

Curly - I would say you had a value bet there! Your friend's ratings are impressive. I struggle to pick one winner at football, never mind 8. Next time, perm 6 and 7 as well as the straight accumulator. What does your friend base his ratings on? Results? Goals? Shots? Corners?

Anthony - Laying low is a great strategy. Greed drives the price too low, then panic sets in when a recovery 'appears' to be beginning, however slight.

"Be fearful when others are greedy; be greedy when others are fearful". A philosophy that works rather well I find.

Anonymous said...

My friend is a "mug", he knows he is, and has never claimed to be otherwise hence why I never took his system overly seriously at first. For what its worth this Tuesday there were 7 '8 point' selections and I decided to back them all as singles. 6 won, this time it was a Dave Bird wonder-strike that messed the system up. Annoyingly enough it was Tranmere beating Leicester that was the only loser last week as well. He hasn't told me what his criteria are... but teams are scored out of 8 (so a match-up might be 8-0, 1-7 3-5 4-4 etc). I'd still go 1.7 that he's a clueless guesser but I will certainly be backing his selections whilst it proves to be profitable.

As a point of interest the average odds have been 2.52 and 54 of 71 teams have been away. I shall let you know how he gets on. Like you I've never really cracked football match odds, I make a decent amount on goals but I'm a tennis man and am always on the lookout for new ways to exploit the markets. After all there's only so long you can stay competitive.

As an interesting sidenote whilst my friend has historically been a net loser at sports betting he is a very successful poker player who has endless amounts of 'patience and discipline' he just for some reason can't make money on the sports - strange in some ways.


Anonymous said...

Hi mate,

I mainly do horse racing and i also dabble a bir at football. although i find football considerably tougher to find real value/edge.
I am not sure that i have the sports wrong? just maybe the markets? I mean i cannot see any way of making money in the over/under markets, the risk compared to the reward is too great! horses there is sure money to be made just backing and laying, but takes huge discipline and patience to sort the better bets out from the junk that is dished up all too common.


PhilipH said...

Re "Targets" ... My target is not to lose. Targets have to achieve a certain goal generally fail. Just look at how targets set by our lords and masters in Whitehall have all but ruined some schools and hospitals. So many businesses set impossible targets for managers and staff, resulting in poor performances in many cases as a result. Targets to win so much or a percentage seem to me to be a waste of time. Cheers, Phil

Cassini said...

Curly - call your friend what you will but to be a 93rd mnute goal away from an 842-1 accumulator is most impressive. Results like the Tranmere-Leicester game leave me thinking I might just as well stick a pin into my screen. (Well, not literally, but you get the point). Funny you should mention poker. I used to play a lot pre-Betfair, and was relatively successful at it, but I got bored with it when I found I could make money more consistently on the exchanges. Poker teaches a lot about value as well as patience and discipline.

Cassini said...

James - as you probably know, I'm not a horse-racing man. I don't know a single person who can make money long-term from it without being on the inside. Maybe some can with trading, but it's just not my thing. The under/overs markets are also a lottery in reverse - lots of small wins and then a big loss. Overall down. I am optimistic that an edge can be found however, but it's not easy.

Cassini said...

Philip H - I'm sure there's a name for it, but in my experience when you set unrealistic goals (I'm going to lose 5lbs a week) and fail to achieve them, the natural reaction is to just give up. Like you, my first goal is to preserve capital. I also track my averages (10-day, 30-day, 52-week, all-time and now 60-week), and while it is nice to beat some or all of them, they don't influence my investing one bit. They are historical and not targets.

Anonymous said...

Cassini, you are very correct. I was hoping to give the impression that whilst in the past my friend has traditionally been a loser at sports betting, he can make it pay at the card table; and I am happy for him to keep giving me his picks while they're returning winners. He may have something and he may not but its an interesting side-show for me so I'll carry on with it.

As to what Phillip has said I think thats the most dangerous goal you can set yourself. Unless you're a scalper or hooverer (and maybe not always even in these cases) you will have losing bets. When you inevitably over-lose on a day, if your target is to not be losing you're very likely to over-react and chase this loss. Just my opinion. I set myself no monetary targets and in the words of Rafael Nadal simply 'trymybest'.