Friday, 18 June 2010

Shades Of '86

This World Cup for England reminds me of 1986, when England started off scoreless in their first two games. They lost the opener to Portugal 0-1, then drew with North African Morocco 0-0 before a couple of 3-0 wins over East European Poland and then Paraguay put us through to the infamous 'Hand of God' game. A win by any score next Wednesday will see them through, and we're 1.55 or so to do just that. Got to stay positive.

Now to ROI again, and I'm inclined to agree with Curly that, for a trader, ROI isn't a particularly useful figure to know. I will probably track it for my Elo bets next season, but for my trading activities it seems a lot of extra work for no real purpose.

Anonymous comments on yesterday's post:

I don't quite understand your reasoning on the first point. 2.06 at 5% is effectively 2.01 so you have confirmed you are prepared to bet at no more than 0.5% value which doesn't sit comfortably with me. 2.01 is the equivalent of 49.8%. I don't see how you can expect to differentiate between a true 50% shot and a 49.8% shot although, personally, I do price markets to 0.5%s so may make something 49.5%.
My post should have made it clear that these borderline bets are for an interest only, and are infrequent. They're the sort of bet I do on a Tuesday night when there's just a couple of games in League Two. When there's a full weekend schedule, I focus on the matches that offer the higher perceived edges.

He continues:
Although not a trader, I'm not sure of the wisdom of being prepared to bet 10x the amount on what you are looking to trade compared to when you have a straight bet and are not looking not to trade. You'll often have to take a big hit, sometimes even the full £1k. And if you operate to small margins (like the 2.06 on 50%) your starting positions are, relatively, too large.
Anonymous admits to not being a trader, and his lack of understanding what trading is about is perhaps best illustrated by his use of the word 'often'.

Yes, often traders take a big hit and lose their investment. It's to be expected. No one who trades is going to get every trade correct (except, perhaps, the great Adam Heathcote). What matters is the bottom line - that your profitable trades add up to more than your losing trades.

If you make ten trades, and on nine of them you lose 100 points, but on the tenth one you gain 2,000 points, that's excellent. Yes, you lost 'often' but you had value, which as I may have mentioned before, is what this is all about.

As for the wisdom of being prepared to bet 10 times my punt amount on a trade, it all comes down to confidence and perceived edge. I have watched enough markets now to have a high degree of confidence that a price is wrong, and by a lot more than 0.5%. I do not operate on such small margins in-play. Most markets move too fast and without meaning to sound too big-headed, but if you watch enough markets you instinctively know when a price is wrong.

I do not have that level of confidence in my pre-game punting, not yet anyway.

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