Ratios And Risk

I posted the question of loss size : win size ratios on the Betfair Forum, and have had a few more replies.

One Forum member Darlo Bantam felt that to compare the numbers "properly" (whatever that means), the strike rate was needed, but for me the question was not how much people make, just whether my theory that an ace trader would have a close to 1:1 ratio (loss size : win size) and a less expert trader have a higher loss size to win size ratio.

I suspected that better traders would be close to 1.0 on the ratio with their strike rate being somewhere north of 50%.

Mardock posted that after 3,000 markets, his ratio is 0.82, with a strike rate of 72%.

Bayes, a much respected Forumite, posted that:

In tennis, my main trading sport, I win in about 60-65% of markets and my average win to average loss ratio is very close to 1. Four or five years ago this ratio would have been nearer 0.8 but I am much better nowadays at staying 'at market'.

His numbers for a couple of bots were reported at:

Markets 1513, Win rate 50.9%, Win/Loss Ratio 0.815
Markets 2724, Win rate 57.8%, Win/Loss Ratio 1.115

Then for tennis, and manual trading, he came up with:

All-time: Markets: 5374 Win rate 62.4% Win/Loss ratio 0.998
Pre-2010: Markets 2570 Win rate 62.6% Win/Loss ratio 0.961

TheInvestor2, another well respected Forumite, reported from the world of football:

For the first quarter of 2013, my average winning match gives me about 88% of the average losing match, and I won on 75% of matches (counting manual trading only). That was a pretty good quarter though.

Pretty close to Bayes, (and myself), and then jptrader chipped in with:

For a large number of mainly in-play football markets my average win size is about 88% of the average loss size, remarkably close to both OP and Investor.

So most traders do appear to have larger losses than wins, (wins typically ~80% of losses) and the better traders do tend to be closer to a ratio of 1:1.

There was one comment on Mark's numbers, which was posted anonymously, and a little sarcastically it has to be said:

Is that the "Professional Sports Analyst" Mark Iverson? So over 7 years he's made £200K, just have to hope his football app is bringing in the big readies cos his trading isn't.

Marks's contribution to this debate was much appreciated, and it should be made clear that Mark's numbers refer to just two sports, cricket and the NFL, and to trading activities on those two sports only.

And speaking of Mark, is he finally rethinking his strategy of easing up at the end of a calendar month? It appears so. My Casssini v Iverson post of just over a year ago (July 2012) is the ninth most popular all-time. Maybe not 'popular' but the ninth most read. What took Mark so long?

Mark is introducing a 'Market Risk Level' indicator, although what determines high, medium or low risk isn't explained. It could be volatility - certainly football would fall into the 'high volatility' category with a goal having a big impact on the outcome, but other sports like cricket or basketball have lower volatility because, (except near the end of course), any one score has less of an impact on the result. Mark wrote:

...if I’m trading a low risk event my mindset is set to be aggressive, whilst if it’s high risk I’m keen to be more cautious.

For me, distinguishing between a low, medium or high risk event is tough - at least before the event starts! If the definition of 'high risk'is an event that I am likely to lose at, then I skip it, or play with small stakes.

Play-offs certainly seem to traditionally be a challenge for me, but generally speaking I have my good sports, and my bad not so good sports, and I have no idea which games within a season are going to be good for me, and which are going to be bad for me. If I knew that...

While Mark's screenshot is the teeniest of sample, his three biggest wins come in the two low risk and one medium risk game, with the high risk games producing the smaller wins (and one small loss).  

Peter Nordsted did stop by to clarify the John Walsh selections question from Paul, explaining:

John Walsh charges me a fee for his NFL picks and I then provide these picks to readers of my newsletter which is a £15 per month subscription.

He also provides picks during the NHL season

Nick from GolfBetting sent me a message, and while golf is no longer one of my top sports, (far too much time relative to returns for me personally) he has a site full of links that some of you golf people may find useful:

Hi Cassini, Hope you don't mind but I couldn't find an email on your blog so thought I'd try this one. I thought on putting a comment on a post but thought it might be a bit spammy. I've just started a website on Golf form and have put a link on there to your blog. I know Golf isn't one of your main sports (although I seem to remember the occasional post on it). But I thought I should let you know the links there. If you have a spare minute to have a look at the site and have any thoughts, that would be great - http://www.golfbettingform.com/links#betting

One thing puzzled me about the site though, was the description of this blog:

Green All Over – possibly the best betting related blog around. Mainly taken from the angle of Betting Exchanges and focusing on Football and US Team sports. Well written (and sometimes combative in style!), there is plenty that can be gleamed from the blog if you want to bet successfully.

Possibly? Combative? And I think Nick means 'gleaned' although as gleam is defined as 'A brief beam or flash of light' perhaps gleamed is just as appropriate in this case. This blog can certainly be most illuminating.

Green All Over - the betting blog that shines.