Sunday, 29 April 2012

Cassman - Off The Radar

The draw price on today's Atalanta v Fiorentina match traded at 2.32 before kick-off (actually, it traded for pennies at 1.03 and 1.04!). Both teams are realistically safe from relegation, and neither has a recent history of being involved in such games. Fiorentina were in one game almost exactly a year ago, but won 2-1 at Cagliari. If the agreement here was to play out a draw, someone forgot to tell the players as Atalanta won 2-0.

My Serie A XX Draw (Classic) Selection lost on both counts today, with Siena losing 1-4 to AC Milan. Two 90th minute goals, but 1-4 is only worse than 1-2 on the spreadsheet - the loss in the account is the same. Overall a small loss of 0.22 points on the weekend.

A couple of comments on my self-nomination for the Nobel Economics Prize. Rob the Builder suggested the Cassini-Balotelli formula would be catchier if I were to work alongside the manager rather than the player, and I have to admit I wish I had thought of Cassini-Mancini earlier this morning!

Webbo added that:
1 year 8 months is pretty good I'd say. I know it's taken me longer than that! As someone who does well on both betting and trading, I wondered how your usual stakes (or max stakes as I know you use Kelly) differ on bets to trades? My losing streaks are less with trading so it makes me think that my stakes should be higher but if they are too much higher than the bets then that makes the bets pretty insignificant. Would be great to hear your thoughts on this.
It seems to me that a lot of people find the exchanges, think how easy it all looks, and expect the profits to roll in. Rather unrealistic, if you ask me, and while it might have been easier 10 years ago when the markets were still developing, I would say it is even harder now. Those 20 months were a very useful apprenticeship, and while it's a cliche to say you learn more from your mistakes than from your successes, I think there is a lot to that. 

When trading, my bets are often far higher than with straight punting, simply because it is very unusual to find big value before an event (if the value is too big, it probably means I am missing something), whereas trading in-play in my favoured trading sports does throw up huge value bets more frequently. It's also important to note that when trading, I don't think of my bets as 'stakes' because I have no intention of losing that amount. 

While the ideal is to use Kelly, or a fractional version of it, when trading, this is very hard to do, especially in the fast-changing in-play markets. Typically I see a price that my 'blink' instinct tells me is wrong, and jump in big and fast. There's no time to calculate the size of the edge, the important thing is to act fast and worry about the details later. If you dither about, the opportunity is lost. I should also make it clear that my exposure can never exceed Betfair's default of £5,000 - I have never asked for this to be increased, so my maximum loss is limited.

Webbo comments that higher profits from trading makes the bets (punts) pretty insignificant. This is certainly the case for me, and in the early years on here, my punting was pretty much non-existent, with just about all my profits generated from in-play trading, and if I saw what I thought was value pre-game, I would usually trade out during the game. Unfortunately, this approach meant that I seldom lost, and as unfair as it is to change the rules of the game without a reset, the Premium Charge was introduced to burst the bubble on that style of winning. Maybe the initial introduction of the PC didn't burst the bubble so much as let some of the air out of it, but the 40% to 60% might! I'm actually almost certain to enter in the 50% band.

Anyway, the in-play profits were not from football, which for reasons I have stated before, does not lend itself well to trading, essentially because the price movements are so predictable, and there are a million other experts with whom I am in competition, and I don't like those odds. So there were a couple of reasons why I turned my football attention to identifying value pre-game, but as I mentioned earlier, value is hard to find, and the reduced edge means lower stakes. And there's nothing wrong with that approach.

Unless you are full-time, there really just isn't enough time to look at every aspect of more than a handful of games each week, and it seems better to me to play with smaller stakes with which you are comfortable than with larger stakes with which you are not. If you are lumping on big amounts, then clearly the numbers are a starting point, and you would want to apply a subjective element also (injuries and context for example), but for most part-time players, a disciplined approach with small stakes works fine. Small being a relative term which will vary from punter to punter depending on their individual situations.

Punting profits might be 'pretty insignificant' relative to trading profits, but they are still additional profits, and always worth having. They help with the Premium Charge, and they do not require you to watch the event, so when you factor in your hourly rate, the value to you of punts increases. Your annual bonus might be 'relatively insignificant' but it's still worth having!

On a slightly different topic, I was reading Space Chronicles by Neil deGrasse Tyson, the relatively well-known astrophysicist, (with a family name of Cassini, I have to have some interest in astronomy), and he was waxing lyrical about the benefits of space exploration. The comment that resonated with me was one about how discoveries are often made by accident. His example of the microwave oven resulting from investments in communications, specifically radar, might not immediately bring to reader's minds the XX Draws, but they too were discovered by accident. Trying to identify draws was not the original intent of the spreadsheet, but it turned out to be a fortunate spin-off. Perhaps not as useful to mankind as the microwave, but it has its benefits for me. In short, without inside information, you're not going to find an edge without making an effort. Keep records, play with the numbers, make adjustments, and you never know - you may find an edge where you never expected to find one.

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