BASIC Programming

A couple of comments on my Trading Superman post, the first contained some clarification from Sheva Wigwam (possibly not his real name) who informs me that: 

Market Wizards is a series of books written by Jack Schwager, in which he interviews traders regarding their experiences and philosophies. Well worth a read.

The famous and highly esteemed Investor once again stopped by to add some of his thoughts on football trading, a topic he knows more about than just about anyone, so pay attention and take notes:

Thanks for the kind words haha.

You're right, I don't look at (old) head to head stats.

As for goal minutes, nothing beyond incorporating the fact that expected goals tend to rise over time in play. If there have been a lot of goals in the 17th minute of the EPL this season, I wouldn't treat that as something interesting for betting purposes.

If I wanted to increase winnings p/h I would only do the best EPL, CL and international games, or even better, only run bots!

I need to look into this 'running bots' thing. For anyone interested, University of Essex (coincidentally my son's alma mater) graduate James Butler's book has received very positive reviews:

One gets the impression that the author knows what he is talking about. He also has the necessary writing skills to explain the concepts in an easy to comprehend way.

It's a pity my old COBOL skills are no longer relevant! Or perhaps they are...

You do not need any programming experience to create the applications, just a logical mind.

Now that, I have, and as I have mentioned before, the 1987 book "The Punter's Revenge - Computers In The World Of Gambling" by Tony Drapkin and Richard Forsyth had a big influence on my life. It was the "dawning of the age of microcomputers and contains BASIC code for those interested in writing their own programs to run on their 'Amstrad CPC 6128'". 

With apologies to the great Mary Hopkin:

Those were the days my friend
We thought they'd never end
We'd win with Ladbrokes, Coral and Hill
We'd live the life we choose
We'd bet and never lose

Porsche 904

If there is one day in the year when I might expect this blog to set a record for hits, it should probably be the day the clocks go back. With 25 hours to work with, the day is 4% longer than most, but nonetheless it was a pleasing surprise to see the previous record of 793 blown away this weekend with a score of 904.

For those who like this kind of thing, the counter will be at 1,111,111 some time this week, at least for a few minutes.

Moving on to things that are actually interesting, and Trader Feed had another excellent post, including these words:

One of the takeaways that he emphasized is that we never find success by discovering an edge and sticking to it religiously through life. Rather, edges in markets continually evolve and, like all entrepreneurs, traders succeed by adapting to their evolving marketplaces. The question of finding one's success as a trader (or remaking one's success) begins with a more fundamental question: In what respects am I a genius? What am I truly good at? How can I leverage those strengths in the current market environment? It's our strengths that will fuel strong performance, not our copying of others. Perhaps the trader who feels stupid is like the fish judging itself on tree climbing. No amount of efforts to improve climbing will help the fish; only the decision to get in the water and swim.

That brings us to the second--and perhaps more provocative--implication of the multiple geniuses view. If all of us are geniuses in some respect, all of us are also idiots in some fashion. We have our blind spots, our weaknesses, our flaws. If it's our strengths that fuel our success, it's our weaknesses that can derail us. Indeed, sometimes it's excessive reliance on our strengths that makes us idiots!

Perhaps most of us are too modest to consider that we are geniuses in any respect, but most of us have strengths and all of us have weaknesses. While many traders work in teams, and have the opportunity to learn from others, the same can't be said of sports betting traders. It's a very lonely activity. A few years ago, a few communal trading rooms sprang up, but I'm not sure that any are still going. As I mentioned here, people don't like to be told they are wrong, and while coaching people in an office setting has its own challenges, I'd suggest it's a lot easier to get through to someone there than it is to get through to someone set in their ways and thinking independently. I use the term 'thinking' loosely.

Reductio Ad Absurdum

My post yesterday included a few lines about meaningless data, and another example reared its head on the Simple Soccer Stats blog. In a post titled Corner Odds User Question And How They Are Calculated we see (edited for readability):

This question was received this morning

Example: Aston Villa v Swansea for the Line 9.5 corners in Match. Your site says for under 9.5 the odds are 1.33 so when I get under 9.5 on bet365 at 1.83, there is a big value or is the 1.33 not the odds?

The reply given was

Yes that is saying there is value. Aston Villa at home have had 14, 9, 9 and 8 corners and Swansea away have had 7,4,7 and 12 so that means 6/8 matches have been below 9.5 corners.

6/8 = 0.75 (75%)
1/0.75 = 1.33

Using the past games the price should be 1.33 but obviously there are lots of other factors to consider and it is not as simple as that. The price is just a guide to convert past results into a decimal price.

Indeed, it really is not as simple as that, as the author does at least recognise, and his blog is certainly honestly named. I just find it incredibly irresponsible to even put that 1.33 out there. It's complete nonsense, based on a sample size of four matches, and no context whatsoever - even a beginner would recognise that a Home game versus Manchester City is not comparable to a Home game versus a (for example) manager-less Aston Villa. A 37.6% edge is huge, and indicative that someone is missing something. If it's not the market, it's you.

Are you really confident that your "model" is better than everyone else's? 

Clearly the person asking the question was excited about finding such 'great value'. That the bet was a loser is really neither here nor there. Value bets can and do lose all the time, (well, not ALL the time), but this bet never had anything like 37% in value. 37% on an EPL market? Highly unlikely.  

As Shapeshifter said back in 2014:

I know some excellent sports data analysts, some who have worked with firms both here and America. It is a whole different head-space. One I have known since high school, originally he dove heavily into the stock market then taking his love of numbers and incorporating it into sports. Conversations with him have taught me the one thing that is of utmost importance: each piece of information has to be put into context.

The big problem with Simple Stats model is the reductio ad absurdum that such a complex and random problem as total corners can somehow be be turned into something easy. 

Perpetual Change

While catching up with the Big Pairs blog this morning, I noticed that he gave my win:loss ratio post a mention a few days ago:

The strike rate was 67.9%, with profitable trades averaging £54.04 and loss-making trades averaging £29.39. Having read Cassini's recent post on this ratio it's something I will be tracking into the future.

That's an impressive ratio. Mr Big also touches on the recently covered topic here of time and work / life balance, writing:

Aside from the reading I also spent some time assessing my trading progress to date. Two weeks away from the markets has helped me realise that I need to find a better balance in life and not spend every waking hour in front of the screens. When I eventually do leave my job and trade for a living I don't want to be spending 18 hours a day working.

Indeed, that would not be healthy for either the eyes, or ones relationships. Seventeen and a half hours a day is more than enough per day, in my opinion.

“When it's all said and done, the only thing that matter in life are so damn simple. Family, friends. being safe and well. I think before the war a lot of people got sucked in by the crap on TV. They thought having the right shoes or the right jeans or the right car really mattered. Boy were we ever dumb.”  John Marsden, The Night is For Hunting

There's little point in accumulating wealth if you don't have the good health and time to enjoy it.

James put on his glasses to provide more details on the state of his health, sharing that:

Okay, so I do like the odd calorie or ten but not to the level where it causes obesity. I can never drink alcohol consistently enough to be an alcoholic as I get sick of the stuff if I drink it on consecutive days. I haven't touched the Weston's for over a month. Also, I can't see the benefits of putting dead leaves in your mouth and setting fire to them.

One thing I am proud not to have an addiction to is chasing losses. Fibonacci and Martingale are not in my algos, just mocked in my blog. Mocking never seems to work though, many people flock to those two temples of insanity no matter how many times we warn them off it.

I did like all the Bohemian Rhapsody lyrics in your blog titles. I also noticed a partial one from Olivia Newton-John and even a title from a Yes album though they might not have been intentional.

Something calls me from a dark place... so time to rest my eyes.

The piece on mocking was particularly interesting. The attitude that somehow the laws of probability and mathematics won't apply to them seems extraordinarily pervasive. I'm not sure if I have mentioned this story before, but a former colleague was heading to Las Vegas and excitedly telling me about his roulette system. Never mind that Roulette in Las Vegas is an even worse idea than in England with its "00" slot, but his system was this - watch until one of the colours (not green) came up three times in a row, and then start betting on the other colour, doubling up after a loss. When I politely pointed out that the wheel has no memory, he said he understood that, which is why he would wait until the same colour had come up three times in a row before starting! The chances of 4, 5, 6 or even, heaven forbid, 7 times in a row were huge, or so he thought. And this is, by most measures at least, an intelligent, well educated man.

I think another reason mocking doesn't work is because people just don't like to be told they are wrong, even if logic makes it clear that they are. Their ideas become a part of them, often entrenched, and criticism, even if polite and fair, is seen as an attack on them, rather on their ideas.

I wish I had kept the details, but I read a story once about a respected scientist who had essentially devoted his working life to proving a theory. Towards the end of his career, he attended a lecture on his area of expertise, and evidence was presented proving that the scientist was wrong. At the end of the lecture, he walked onto the stage, shook the speakers hand and told the audience "I was wrong".

I am not sure many of us could do this so readily, but there should be no shame in admitting you were wrong about something when presented with evidence proving so. Politicians have a particularly hard time with this, with changing your views seen as a weakness, but if you take a position on something, hopefully based on facts, and the facts change, there should be no shame in changing your opinion.

One of my peeves is that of referencing meaningless data as if it has significance.

Previously the two clubs met in the 1930 Semi-Final with Arsenal advancing after a replay winning 1:0 at Villa Park after a 2:2 draw in the first match at Elland Road. Hull led 2:0 with 20 minutes to go in the first match, and I therefore perceive value in laying Arsenal in the half-time market. These matches are particularly relevant given that both were played on neutral grounds, as of course the FA Cup Final will be. Interestingly 1930 saw the first World Cup finals and with this year also being a World Cup year, I perceive there is value to be had in backing Uruguay to win the World Cup.

That was an extremely silly example to make the point, but you do still see such comments out there. Such details might be interesting as a tidbit on the BBC Sport match preview page, but they should have no place in a serious article about betting.

As for song titles and lyrics in my blog titles, yes I do this from time to time. Coming up with a title actually takes as long sometimes as the actual post. I do like my music, especially Queen who I saw live many times in my teens and twenties, and I do like my puns too, so that's a device I use also from time to time. Just using the date is the easy way out, but I can't say such titles make me think "ooh, that looks interesting. Let's see what that is about". At least titles along the lines of NFL Week 7 do tell you (presumably) what the post is about, and perhaps save you a click if the subject is of no interest, but I like to be a little more mysterious and pique curiosity. It seems to be working, with the daily hit count averaging over 600 this past week.

Back to Betfair Pro Trader and James again, and he has some kind words in his most recent post, about the two sports betting blogs he reads:

The sports betting blogs that I do read are not of the profit and loss type. Those blogs are Green All Over and Sports Trader. Neither of them have anything to sell, be it tips, courses or merchandise. I have had a few mentions from Cassini, the nom de plume of Green All Over and here I return the compliment. I can't say that I am all that interested in association football or baseball but I do like the analysis of a sport and the modelling of a trading strategy, which Cassini so eloquently does with his wig and pen. Also, Green All Over contains a lot of philosophy of sports trading that I enjoy reading, mixed in with off-topic and more general investment content.

While I am somewhat familiar with Green All Over, and I do agree with James that it is excellent, Sports Trader was a new blog to me, and has been added to my blog roll for a look when time permits. The bad news is that the recent jump in hits is probably all down to James catching up after some time away focusing on writing his book Programming for Betfair and the hits will likely drop into single digits very soon.

Perhaps it is the ongoing Rugby Union World Cup that made James feel he needed to prefix football with the word "association". I am fortunate enough to have a son who has two tickets for the final next Saturday, and barring a rift in the family during the next week, I am reasonably confident that one of them will have my name on it. I'm looking forward to it. I've not been to Twickenham since it was renovated, and I have never seen the Haka live either.

James ends his post with these words:

So there you have it. I read just two sports betting blogs that make me think rather than make me wonder why I am not making obscene amounts of money like the P&L blogs, which is probably just as well as I doubt that most of the P&L blogs are telling the whole truth.

There's always the good old Benford number tests if anyone cares enough to validate the numbers reported by someone else. Personally, I think you can get a good feel for whether someone is profitable or not, certainly from longevity, but also, as James says in reference to Sports Trader:

Again there is no mention of winnings or losses. I can only imagine that such attention to detail has been rewarded with some profit.

Sports Trader has been blogging since 2009, and while he doesn't post too often (just 37 mostly short posts in that time), the impression is that he knows what he is doing. n the other hand, I haven't got a clue, and have just been lucky for the last 10 years of perpetual change.

"A man only learns in two ways, one by reading, and the other by association with smarter people." - Will Rogers

Trading Superman

The much respected Betfair Forumite Investor stopped by to comment on my Measuring Up - Is This Just Fantasy? post. 

The problem with PnL/hour for me as a useful metric for my own trading is that my PnL is extremely dependent on liquidity. So if Betfair bet volume doubled or halved it would massively affect my PnL given no change in skill (relative to other traders). I know my average margin is x% and it is fairly steady across bands of liquidity, so given expected turnover of y, I can work out what I expect a football match is worth to me. So I use it more before trading than looking at it after the fact.

As for avg win size vs average loss size, it probably will be the case that the best traders have a good ratio (I remember something like this being mentioned in market wizards as well), but it won't hold true all the time.

My favourite measures are margin on turnover (normalised to make a £100 back at 1.1 and a £10 lay at 11 equivalent), and share of market matched.

I'm not familiar with Market Wizards, but I'd like to see the article or thread. I did come across these words from Peter L Brandt while looking around for it:

I was mentored by a man with something like a 75/25 ratio whose average profit was substantially higher than his average loss. This man was a trading superman, a genius, a one-in-a-million. Few people are born with such a gift from above. 

Sounds to me like Mr. Brandt is talking about Investor himself! He IS the Messiah!

Profitably trading on football has proven to be a very tough proposition, and I tip my hat to the likes of Investor who have shown themselves capable of doing this. Somehow, I doubt this has been achieved by looking at head-to-head results from several years ago, or looking for patterns in goal minutes.

Measuring margin on turnover or share of market matched are certainly other ways of measuring proficiency, although they both require additional record keeping. As a casual part-timer, it's really just academic anyway, with no real benefit to me for keeping more records. After 10+ years, I have a good feel for my strengths and weaknesses, and what events are worth my time, which is why I'm becoming a big fan of simplification these days. After all, there are two ways to increase ones PnL/hour - either increase profits or reduce the time spent. With the Premium Charge, not just nibbling away at, but taking great chunks out of profits, it's far easier to be more selective about the events to trade and reduce the 'hours' side of the equation.

On the topic of simplification, the UMPO system is about as simple as it gets, and heading into the World Series, it is in profit by 1.87 points (and more importantly with an ROI of 6.45%).

The World Series starts on Tuesday night, and is between last season's runner-up Kansas City Royals and the New York Mets, who are in their first World Series since 2000. There is no clear favourite, with the Royals having home 'advantage' in the best-of-seven series.

For Trivia buffs, this is the first World Series between two expansion teams. Strangely, for a "World" competition, it is once again two US teams competing.

"Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” ― Steve Jobs

Are You Sitting Comfortably?

James is concerned that he now has a reputation for addictions to nicotine, alcohol and calories after I published this quote from my last post:

If I was to pick one issue above all others, I would say obesity and we should do much more about alerting men to the dangers of being overweight. Men are generally in poorer health, he says, with a worse diet. They are more likely to smoke and be alcoholics.

The 'he says' refers to Peter Baker of Men's Health Forum whose quote was pulled from the linked to story on the BBC Magazine site. Apologies to James if any of you thought the quote was from James, who said:

I have enough left of my current online ration to point out that the quote is not mine. Although, as I am the only person mentioned in the article it looks as though the quote is mine.

Thankfully, obesity, smoking and alcoholism are not in my repertoire of failings.

 I thought those three were essential for a writer, but perhaps not.

Paul Dixon, aka Betting Tools, and perhaps best known for his runner-up place in last season's FTL had a post which was both honest and frightening. Take a look, but the gist of it was that Paul purchased a system that uses a Fibonacci staking system. Paul writes:

My usual rule is that if a system is not profitable at level stakes then it is best avoided but, given the high praise and lengthy winning run this system has enjoyed, I decided to run with it.

Not for too long though:

I do not need the anxiety. I do not know what happened to the next runner in the sequence for I stopped looking. Clearly there are bound to be occasions when the ninth in the sequence goes my way – that is a mathematical certainty. But it is also a certainty that there will be nine losing lays in a row again too. I can do without the way that makes me feel as the sequence builds up. I have jettisoned both systems, written off the losses incurred and the initial purchase cost. I realise that I may be turning my back on potential regular small profits in the future, but, do you know what? I feel much better for it.

I've seen nonsense about using Fibonacci staking on Draw selections, and wrote a post about it in February 2013. As Paul says, if a system isn't profitable to level stakes, forget it. If a system is relying on chasing losses, it's not worth a bean. The problem with any progressive staking system (increasing stakes after losses) is that stakes very soon become uncomfortable.

To level stakes, the UMPO system is currently up by 0.62 points after staking 28 points.

Had I been using Martingale staking, UMPO would be up 58.37 points (ROI 19.85%). The only slight problem is that the draw-down was as high as 243.04 points after seven consecutive losses, including the 128 point stake on the sequence ending eighth bet, and I'm not sure many of us would have been sitting comfortably at that moment.

Paul doesn't need the anxiety, and I certainly don't either. If you want to be a gambler, then go for it, but at my age, staking sensibly and not caring about the outcome of any one event is the way to go.

Game 29 tonight. Go Royals! I have one point on.

Get Physical

My recent Time - The Hidden Cost post and others, have pointed out the huge, often ignored, cost of spending hours trading in-play. The latest post from author James Butler (aka Betfair Pro Trader) highlights an even less often considered cost of spending your life in front of a PC, which is the cost to your health.

While James's focus is on his eyes, there are other health considerations when you spend all day trading, not least the effect of stress on the body. I imagine the impact on eyesight isn't a concern solely for full-time pro traders, but for many of us who spend time in our regular jobs looking at pixels on a screen. At 50, the need for glasses is quite normal, but workplace safety guidelines encourage regularly stepping away and looking out of the window which might not be so easy to schedule during an in-play event.

The fact that traders tend to be male is another issue, because men are well known to neglect their health, but if you are over 50, it really is smart to get an annual physical.

If I was to pick one issue above all others, I would say obesity and we should do much more about alerting men to the dangers of being overweight. Men are generally in poorer health, he says, with a worse diet. They are more likely to smoke and be alcoholics.

How rude! But I guess sitting in a chair all day isn't conducive to losing weight. I'm being slightly biased here, but if you smoke, you're an idiot, and if you drink, well that's just being sociable and relieving stress. It's good for you, at least in my opinion - Mrs. Cassini says I am 'rationalising'.

As for the diet, here's where married men have an edge, our wives force us to eat rabbit food and fruit, at least once in a while.

So to take James's advice one step further - and yes, do get your eyes checked, but also go to the doctor, get a physical, ("three inches up is better than six feet under"), get your numbers (weight, cholesterol, triglycerides, blood pressure, pulse etc.), lie about how much you drink and how often (I assume they at least double what you tell them anyway), and at least think about acting on any suggestions he (or she) may have for you. It could save your life.

Upwardly Mobile

Lots of numbers today, and to start with, it appears that I have been selling myself short so far as the hits on this blog are concerned. Since updating the counter to include mobile devices, the daily average is exactly 650 with a high of 793.

Prior to this weekend, the daily average was 329 with a high of 748 so basically the number of readers has almost doubled overnight.

Also understating is the UMPO system. For Sunday's game, I was matched on the winning New York Mets at 2.4 (see below) while the recorded price was 2.3.

 

After four wins in the last six games, the UMPO system is back in profit - by the slenderest of 0.20 points and an ROI of 0.83%, although in reality profits are somewhat higher.

Into the red on the season, by the slenderest of 0.29 points, is the Bundeslayga system after this weekend, although the Bundeslayga.2 system is up on the season by 3.02 points. 

The new NBA season is just a week away, and as the baseball door closes, so opens the NBA door.

Drip

As expected, Unknown Trader clarified his intriguing "particular characteristics" reference with these words:

Probably my comment sounded mysterious but what I was trying to say is that long-term wise you'll be better off if you can translate a pre-existent edge to one which allows more variance to kick in. On other words, you can have a profit of £100 in several ways but you'll be in a better position if you do it by losing £4900 while winning £5000 than by just doing the £100 alone.

For someone who is starting what I'm saying is not relevant at all but in the long run it can certainly have an impact.

Of course, having and maintaining an edge is already a big proposition let alone manipulate it to mimic these particular characteristics I was talking about.

As most readers will know, the most 'efficient' winners on Betfair are subject to a Premium Charge. It pays to be less efficient which is where the value in systems such as the Bundeslayga and UMPO lies. The steady drip-drip of profits from such systems helps to mitigate the charges incurred from the more glamorous profits that can be found from in-play trading.

One of the biggest complaints about the Premium Charges is the retroactive nature of them. Personally speaking, had I known from day one what the rules would be changed to in 2008 and again in 2012, my approach would certainly have been different, but whining won't change anything. It's clear that the changes were made with fast-finger court-siders (and former employees) in mind, but rather than simply ban such activities and accounts, a wider net was cast which unfortunately caught a lot of unintended victims, such as the likes of Mark Iverson, who over the years became something of an expert in cricket, darts and other niche sports:

However, as Betfair increased their premium charges the effort needed to sustain my income went up so the amount of available time I had to blog decreased.

Unfortunately board-siders curtailed my involvement with the oche in 2012 when I realised that too many players had access to either fast pictures or data I didn't have. If you're 10 seconds behind the action in that sport it's as good as a lifetime.

To suddenly hit such sharp-minded people with first 20% in charges, later increasing to 40%, 50% or 60% seems unnecessary and contrary to the concept of the exchange idea first created by Andrew Black and Ed Wray.

The decision by Betfair to take this approach is akin to Stock Exchanges allowing insider trading but charging 40% to 60% of profits in 'facilitation fees', while slapping the same charges on the likes of Warren Buffett, whose profits are generated by a more traditional long-term buy-and hold approach.

Open Your Eyes

Unknown Trader is becoming very well known to readers of this blog. He comments on this recent post with:

Thanks a lot for the feedback, I hope to be here for the long haul!

About the Premium Charge, the long-term challenge went from having a trading edge (which was a big one already) to having a trading edge with some particular characteristics.

The reference to "some particular characteristics" is very intriguing, and I'm really not sure what he means by it. What 'characteristics' does an edge have other than being either positive or negative and its size? There are different ways of creating an edge, which is perhaps what is meant, but once found, an edge is really quite mundane. Perhaps UT will be providing a clarification in the near future.

I've mentioned before that one of my early strategies in the late 1980s was to scour the two or three pages of the Racing Post which were typically dedicated to sports betting, and take the top prices, sometimes in multiples, to give myself, if not a positive edge, at least a minimally negative edge.

William Hill sent me an email last week about a dormant account I have with them, and that they would be charging me a fee for the privilege of allowing them to have my funds available, however:

The process to reactivate your account and avoid the charge is simple, just deposit into your player account or make a bet within the next 14 days – it’s that easy!

The idea of paying a dormant account fee didn't appeal, so reverting to a strategy from around thirty years ago, I looked at lumping the balance on a short-priced double. Hill's 1.5561 was actually better than Betfair's 1.4848 (if anyone is unaware, Betfair multiples are not very good value, to put it mildly) so the fate of my William Hill fortune lay in the hands of the Rugby Union gods.

At the time of writing, things are looking good, and the dormant account fee issue is resolved. As I discovered in my Racing Post days, multiple bets with shorties can be quite eye-opening and profitable. A double comprised of two 1.42 shots, and you 'double' your money. It's a shame that Betfair don't have their act together on these. Their singles prices are better than Hill's but magically diminish as soon as you try to parlay them.

No Escape From Reality

I received an email a couple of days ago from the good people at StatCounter whose free service I use to record the hits on this blog. It makes no difference to my life whether I get one hit a day or several hundred, but I do like my numbers and I do like them to be reasonably close to reality, so when they told me that they hadn't been tracking hits from mobile devices and offered an easy fix, I thought I'd make the change.

I wasn't expecting too much difference, but based on the first day's evidence, the increase is quite significant.

Admittedly a rather otiose fact, but that 531 total is my fifth highest ever, behind daily totals set when something dramatic has happened rather than on an average Autumn Friday. The blogger counter itself recorded exactly 700 hits yesterday:

which seems high based on the average last month, although the blog was fairly quiet for much of it. Anyway, as I said - all very meaningless but nice to know that someone is still reading. The total hits counter has been re-configured to use Blogger's (apparently more accurate) total.

Of course if my posts are all as boring as this one, the totals (or blog) won't be of interest to anyone!

Another win for UMPO last night, as the Kansas City Royals became the first home 'dogs of the 2015 play-offs to triumph, beating Canada, aka the Toronto Blue Jays, by 5-0.

I was on at 2.2 although the 'official' price at the time of writing, which may well be adjusted, is a meagre 2.06. Tonight's price should be a lot longer, but the eyes of most Americans will be on the Cubs / Mets National League series which opens up four hours later. The Cubs will be road 'dogs in this one.

Caught In A Landslide

The Unknown Trader responded to yesterday's post saying:

I tend to agree with you on the use of P and L in blogs and that's why I committed myself on never using it in my own.

Nonetheless, if you compute a P and L/hour over a long time period (years or thousands of markets) some issues like initial bank size will be diluted. As so, a trading edge will take care of an initial small trading bank while the opposite situation also stands true: a huge trading bank will be gone if you don't have it. Either way, the inclusion of a time measure is very important when evaluating trading outcomes.

About your measure, I think a win/loss ratio of 1 is a good rule of thumb, but there are a lot of ways to go to Rome which I don't categorize as better or worse. In fact, they are better or worse when it comes to Betfair Premium Charge, but that's another subject! The numbers you stated in your post are pretty impressive and maybe I'm wrong here but I think you could find similarly impressive ones from traders with different ratios, higher or lower. In the end, each to its own I guess!

Keep up the good work, it's great that you're more active again in your blog! By the way, your feedback (good or bad) on my blog would be highly valued, hope you get the chance to read it.

There are indeed many ways to skin a cat, and if you have found a way that works for you, then stick with it. The mention of the Premium Charge is interesting too, as I'm sure many a successful trader has modified or added new strategies to mitigate these as much as possible. Green Is The New Black is a blog worth reading. I believe the writer is from Portugal where Betfair has recently stopped operating, so to fill up his spare time, the writer is now blogging. With eleven posts in August but just three in September and October combined, I hope this isn't a sign of waning interest already, but my award for "best post to date" goes to this one - Is there a blind obsession with statistics in the betting world?

Certainly there is for some people who nonsensically think that previous match-ups from years back between clubs are relevant when assessing odds, or who think that there is some predictive value to be derived from a 32nd minute own goal on a Tuesday night in Grimsby, but if you are smart and logical, put some context around your data (all goals are not equal), then as many have shown, it is possible to gain an edge, at least for a short while.

As for the kind words about the blog, they are appreciated. As some of you know already, responsibilities at work increased this summer, but after nearly two months, I've grown into the job somewhat, and learned what is important, and more usefully to whom it can be delegated! The result is a little more free time, no travelling for a couple of weeks, and hence - a few more posts.

The Daily Fantasy Sports scandal continues to grow, if not explode. My US correspondent, Scott, pointed me to a long-read article in the New York Times which is worth the long read. Scott commented:

A very long piece of investigative journalism, but an interesting read.

The Pinnacle connection is surprising in that they would choose to exit the UK market due to a Gaming Commission tax increase, but on the other choose to get their hands dirty in the US market where they are breaking the law.

Still incredible that the US has not chosen to simple regulate and tax sports betting.

The US is an outlier on many issues the rest of the civilised world have long since settled. Fahrenheit should be retired, the death penalty is never justified, evolution is a fact, religion is silly, climate change is a fact, elections should go to the guy with the most votes (i.e. Al Gore), healthcare should be a right and placing a bet is a perfectly normal activity. On the same topic, Bossman Megarain writes:

Your Blog continues to provide insight/thought provoking analysis.

We are all busy, gambling, but, the DFS saga, has peaked my interest, in that it seems the DFS win, by Artem Genchanok, was bet from Louisiana, - one of 5 states, that specifically prohibit, 'gambling by computer'.

I am v interested, how this pans out ..

I do feel, with all the Federal involvement, Sports Betting, may be legal, in far more States, within - say 3 yrs, than I had previously thought.

As it stands right now, Fantasy Sports is exempt from the 2006 law because it was considered a 'game of skill'. Back then though, the industry was a fraction of what it is now, and Fantasy Leagues ran for a season. Reducing the time span down to "Daily", and the element of chance is far higher, as almost everyone reading this will be only too aware of.

As the New York Times article says, the Act was passed in a hurry, late at night, and wasn't debated. Now that there is so much attention on Fantasy Sports, it is likely that new legislation will be passed at some point. Either Fantasy Sports will now be considered gambling and also banned, or the opportunity will be seized to have an informed debate on the topic, accept the realities of the 21st century, and allow US citizens to decide for themselves how to spend their money, and provide a regulated environment to facilitate that activity. Time will tell, but there's a lot of money lobbying against opening sports betting up.

The four Divisional MLB Series are now done, and it wasn't a good round for the UMPO with the ROI% now in the red down by 7.74%.

At least the round ended with a win, and we move on to the best of 7 Championship Series where in the National League, the Chicago Cubs play the New York Mets, and in the American League the Toronto Blue Jays face the Kansas City Royals. It's a good year for teams in blue! The AL series starts tonight with the Royals home 'dogs, which as you can see above isn't a category that has had any success so far this play-offs with all four selections losing.

The Cubs won all seven regular season games v the Mets this season, while the Blue Jays had the edge 4:3 over the Royals with home sides winning 5 of the 7 games.

Measuring Up - Is This Just Fantasy?

Green Is The New Black, aka Unknown Trader, commented (via Twitter) on my Time - The Hidden Cost post saying:

Nice post, IMO there is no better measure of a trader's performance than Profit or Loss/hour for a meaningful period of time.

The problem I have with using Profit and Loss as a measure is that a pound is worth far more to a pauper than to a prince. It's a lot easier to make £10 an hour from trading with a bank of a thousand times that and a seven figure net worth than it is if you are unemployed and unemployable, with a net worth of peanuts and a bank of £100.

That's one reason why I don't like P and L blogs - they have no context. A profit (or a loss) on its own is meaningless, and even more meaningless when there's no clarification on the time consumed.

As a measure of pure trading ability, I stand by my assertion from last September that the best traders are those whose average win size is the same as, or greater, than his average loss size.  Some esteemed traders offered their numbers, and the average win size from the informal survey seemed to be in the 80% to 90% range of the average loss. Bayes, well known to the Betfair Forum, wrote:

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'.

Mark Iverson's Cricket numbers were a very impressive 0.997 (Ave Win: £230.85, Ave Loss: £231.59). My own NFL numbers were not (0.729) but the NBA was better at 0.874.

Moving on, and as predicted here last week, the FBI are now investigating the Fantasy Sports business in the USA.

The New York Attorney General’s office has asked both companies for a raft of internal data including the win/loss records of players, algorithms that determine the fantasy pricing for athletes and details on their policies to prevent fraud.

This article specifically mentions the issue of insiders trading:

DraftKings, as well as rival FanDuel, have acknowledged that their employees — many of whom regularly rank among the most consistent big winners — have played and won significant money on each other’s sites. In the wake of the scandal, they banned their employees from competing in any contests.

Don't hold your breath that the Gambling Commission will be asking the same of Betfair any time soon, but the pressure may be heating up - someone is certainly carrying out some interesting research:

Betfair viewed every extra bet as good business. They would stop people having $10 from New York on a new account, but super-courtsiding boss Jonathan Gale has fired in billions of dollars worth and been waved through.

A billion here, a billion there, and pretty soon you're talking about real money - Everett Dirksen

Time - The Hidden Cost

Toymaster77 commented on my Riches to Rags post writing:

I have done the same as you as a punter for 30 years and lost constantly. In 2011 Deposited $100 AUS and have not made another deposit but taken plenty out. I am a layer not a backer.

Go slowly and don't listen to all the get rich schemes.

Have listed my results over last 12 months on toymaster77

While it is great news that after a quarter century of losing, Toymaster has managed to turn things around over the last four, I'm not sure many of us would have hung in there for that long. Of course it's quite possible that the losses over those 25 or so years fell under the Entertainment heading rather than Investment losses. Some of us bet for fun, some as a serious endeavour to make a little extra money, and some as a full-time occupation.

Time is our most valuable asset. Time is money. Time is not equal to money. Time earns money, yet money can not buy time.

While I keep detailed records of the sums won and lost going back to January 1st 2006, (lost £123.72 that day if anyone is interested), I don't track the hours expended to earn (or divest) those sums, and I suspect time is something many of us overlook.

It may not be true for everyone but for me, with trading opportunities becoming less and less frequent and other demands on my time, after years of suggesting that 'in-play is the way', I'm now in a place where the value in simple strategies is becoming increasingly important.

The UMPO system is still in profit, with an ROI of 8.1% after a run over the last three days of two winners from eight which has seen that percentage decline. We've also had a glut of Overs in that time, with six of those eight going Over including all four of yesterday's games. So with no real football, it was a wash on the baseball but a decent weekend on the American Football, one of the few sports remaining where in-play trading can still be profitable.

Finally, it looks like our friend Clayton Kershaw will be pitching again tonight for the Los Angeles Dodgers after just four days rest. He's 1-1 on short rest in play-off matches, winning in 2013, losing in 2014. It's a must-win game for the Dodgers as the Mets lead the series 2-1.  

Cope Or Flourish, Bitches

Some of you may have heard of trading psychologist Brett Steenbarger whose TraderFeed blog has been in the 'other blogs I read' section of this blog for a long time.

He has some interesting ideas on trading psychology in his latest Forbes post, writing:

To appreciate the difference between the traditional psychological perspective and the newer one, consider two traders keeping performance journals. The first trader keeps tabs on various problems that creep into his or her trading, including the usual suspects of fear and greed. The journal entries note how these have occurred and what the trader will try to do subsequently to avoid the pitfalls.

The second trader keeps a journal that is broken down into five areas of performance: research and information collection; creativity and the generation of trading ideas; entry execution and position management; risk management and exit execution; and self-management along the four domains listed above. Each of those areas of performance is anchored by best practices and the reverse-engineering of successes, so that there is a continual refinement of strengths.

One journal consists of finger-wagging: don’t do the wrong things. The other journal consists of an exercise of strengths: do what you do best.

Which journal is most likely to be empowering? Which is a trader most likely to stick with Which is most likely to lead to exemplary performance?

Minimizing our problems can help us cope. Maximizing our strengths can help us flourish.

My experience is that the flourishing focus is a true paradigm shift for most people. Most of us view our typical day as an opportunity to get tasks done, manage challenges that arise, and hopefully accomplish some things. Once we view life through the lens of flourishing, however, each day becomes an opportunity to enhance happiness, personal satisfaction, energy, and relationships. This is the idea of life as a gymnasium: each day presents challenges that exercise the best within us.

His previous post was also a gem, including this advice which mirrors what I have said myself many times, only not quite so succinctly perhaps, bitches.

You have a relationship with the market and any time you're controlled in a relationship, you're the bitch.

The only way to have an even relationship with the market is to control when you play, so that you don't get played.

That takes rules, that takes finding and sticking to edges - and it takes the willingness to not play when your edges aren't screamingly apparent.

What you got ain't passion for trading; it's a need to play.

If you need to play, you're going to get played. You're going to be controlled by market behaviour. You're going to be the market's bitch.

Riches To Rags

Peter Webb's latest post is titled "A Fool And His Money Are Soon Parted" an ancient proverb which for me at least, always begs the question "How did this fool get his money in the first place?"

An inheritance, lottery win or a rare sporting talent are three likely candidates, and you don't have to look far to find hundreds of stories about former star players now working mundane jobs or lottery winners who have blown through millions. Some UK based readers will be familiar with lottery winner Callie Rogers who won nearly two million pounds in 2003 and ten years later, after attempting suicide, was studying nursing with a net worth of £2,000.

On a personal note, while he never earned the riches that top players receive these days, back in the day I was friends with the brother of David Price, the footballer who played in three FA Cup Finals and a Cup-Winners Cup Final for Arsenal as well as his local team Crystal Palace. 

Forced to retire at the relatively early age of 28, David was putting down computer room flooring and driving a mini-cab after blowing his relative wealth on extravagances and simply being too generous. He would often pick up the bill for nights out with friends, most of whom pretty much vanished overnight after his career was over.

Peter Webb's article takes a rueful look at the image of 'gambling markets' and the attitude of the press which loves a good Elliot Short-like story. While the business model used by traditional bookmakers - "we only accept losers" - should be ultimately doomed (a fate that would be accelerated with the banning of FOBTs), the exchanges and their shenanigans don't help themselves. The insider-trading scandal this week in Fantasy Sports is another example of the industry shooting itself in the foot.

Back to more mundane issues, Peter and I are on the same page on this issue:

You also have the issue that people who have never traded successfully are positioning themselves as experts or people are seeking to exploit the trading opportunity, rather than getting on and doing it, that isn’t helping matters. So even the best opportunity to profit from sports markets that ever existed, can get horribly fudged.

I feel sorry for people on the wrong side of these scams. But it has to be said, it’s fairly obvious that if you are producing stellar returns on something, you just reinvest the money yourself. No need to seek outside involvement. I know that, because that is exactly what I and many others have done. I’ve never met a serious participant in the market who wouldn’t do the same.

The infamous Sultan and Odwyer come to mind as characters here. Both were mentioned in a post back in February 2013 and then of course there was our old friend Adam Heathcote, but the key point to understand is that if you have an edge, you don't need anyone else's funds to get the ball rolling. I started with a Betfair deposit of £98.50 in 2004, and as I have mentioned before, that remains my only deposit into Betfair. It took me a while to get going, and honestly I don't believe the same opportunities exist today as they did 12 or so years ago, but it was a fun ride at least until I hit the 50% Premium Charge limit.

Having too much money actually works against you as Peter explains:

...even starting with small amounts, you can move to much bigger ones very quickly, if you have an edge. This is something fairly unique to sports markets. So if I start with a small amount of capital I don’t really need any more, I just compound what I have.

The fact is, even if you have a decent track record it’s impossible to put that extra money to use because your ‘system’ will collapse under the weight of your own stakes. In effect, you become the market! The upshot of this is that sports markets are just not scalable enough to warrant raising significant funds to deploy in them.

I do have a problem with Peter's qualification of the word 'unique' here - there is no degree of uniqueness! Something is either unique or it is not unique. Something can't be 'fairly' unique, but what Peter says is correct so far as scalability is concerned. If you are playing with a few pounds, it is much easier to get value than if you are playing with tens of thousands. The below market is from tonight's baseball game between the Toronto Blue Jays and the Texas Rangers:

With just £2,107 traded at the time of writing, that's not exactly a liquid market where a large stake would be required. So next time you read that someone needs funds, understand that means they have no edge. If they have an edge, they don't need your money.

Speaking of fools, I just saw this from TheLADbible:

 I don't think betting is their strong suit.

There is no fool like a careless gambler who starts taking victory for granted - Hunter S Thompson

UMPO

It's been a decent start to the UMPO system (Underdogs MLB Playoff in case you were wondering) with underdogs triumphant in four of the first six qualifying matches so far. The lines in yellow are provisional on the prices, but I'm in the pleasing position where even a wipe-out over the weekend wouldn't take me into the red.

It seems that more than a few of you might be following me on this system with the price on the Mets crashing from a high of 2.94 to around 2.68 last night before rebounding a little at first pitch. It's always tempting to lay off and have a risk free bet when a price moves in your favour like that, but unless that was your intent (and good luck picking up on pre-game moves) I'd advise sticking with the game plan and letting the bet run.

The prices I use in my records are taken from a US web site and can usually be beaten. For example on last night's St Louis Cardinals v Chicago Cubs game, the prices were -107 (1.9346) and -103 (1.9709) which is why although there was 'technically' an underdog, the system requires its underdogs to have a less than 50% implied probability!

The New York Mets were up against Mr. Clayton Kershaw, (I may have mentioned his name here once or twice before), whose seven year contract and $30,714,286 million annual salary contrasts rather dramatically with the Mets starting pitcher Jacob deGrom's (left) one year, $556,875 deal. DeGrom was the National League Rookie of the Year last season, but how he, or anyone else for that matter, manages on such a pittance, I have no idea. Don't feel too bad for him though - when Free Agency rolls around , he should be able to pay off some of his higher interest credit cards and afford a hair cut - scruffy git.

Kershaw's record in playoff games is poor, with just three wins from his eight appearances, and on a losing run of four.

Laying Kershaw in Playoff Games

The poor run extended to five as Kershaw was pulled in the seventh inning leaving the bases loaded and trailing 0:1. By the end of that half-inning, it was 0:3 and the Dodgers were done, although they did score one run. The Division Series are best of 5, and to state the obvious, lose the first game and you need to win three of the next four.

I'll update the UMPO results every few days. I'm sure some of you don't want a daily update, and quite sure some of you don't want any updates because you don't care about baseball, but the beauty of simple systems like this and the Bundeslayga are that they are low-risk and low-maintenance. There's no bet management required, no  need to watch the game itself - simply check the upcoming games each day, place your bet, and enjoy life.

Close To The Edge

Once again, I am indebted to my old friend Scott for drawing my attention to some breaking news - a sports betting scandal over in the USA.

Unlike the Betfair scandal, which sees UK regulators either incapable or unwilling to address, it's unlikely to take the US authorities long to act, unless guns are involved in which case it's business as usual. Got mental issues? Sure, no problem Sir - how many guns would you like?  13? - unlucky for some, here you go. 

Scott notes that;

According to this article, US federal law accepts that fantasy leagues where you bet on the results produced by individual players constitutes a game of skill rather than chance.

But betting on match outcomes themselves is somehow different.

Totally bizarre.

Legalising sports betting is the only (obvious) solution to the problem.

Equally as bizarre is that internet poker was considered a game "subject to chance" and banned in 2006. Buying stocks, options, futures etc. is all skill then. Right.

Here is the New York Times article on the US Daily Fantasy Sports scandal:

A major scandal is erupting in the multibillion-dollar industry of fantasy sports, the online and unregulated business in which players assemble their fantasy teams with real athletes. On Monday, the two major fantasy companies were forced to release statements defending their businesses’ integrity after what amounted to allegations of insider trading, that employees were placing bets using information not generally available to the public.

The statements were released after an employee at DraftKings, one of the two major companies, admitted last week to inadvertently releasing data before the start of the third week of N.F.L. games. The employee, a midlevel content manager, won $350,000 at a rival site, FanDuel, that same week.

“It is absolutely akin to insider trading,” said Daniel Wallach, a sports and gambling lawyer at Becker and Poliakoff in Fort Lauderdale, Fla. “It gives that person a distinct edge in a contest.”

The episode has raised questions about who at daily fantasy companies has access to valuable data, such as which players a majority of the money is being bet on; how it is protected; and whether the industry can — or wants — to police itself.

The leagues have been swelling in popularity, their advertisements blanketing football game broadcasts.

The industry has its roots in informal fantasy games that began years ago with groups of fans playing against one another for fun over the course of a season. They assembled hypothetical teams and scored points based on how players did in actual games.

But in recent years, companies, led by DraftKings and FanDuel, have set up online daily and weekly games based on a similar concept in which fans pay an entry fee to a website — from 25 cents to $1,000 — to play dozens if not hundreds of opponents, with prize pools that can pay $2 million to the winner. Critics have complained that the setup is hardly different from Las Vegas-style gambling that is normally banned in the sports world.

On Monday, DraftKings and FanDuel released a joint statement that said “nothing is more important” than the “integrity of the games we offer,” but offered few specifics about how they keep contests on the level.

A spokesman for DraftKings acknowledged that employees of both companies had won big jackpots playing at other daily fantasy sites. Late Monday, the two companies temporarily barred their employees from playing games or taking part in tournaments at any other site; they already had prohibited their employees from playing on their own company sites.

“Both companies have strong policies in place to ensure that employees do not misuse any information at their disposal and strictly limit access to company data to only those employees who require it to do their jobs,” the statement said. “Employees with access to this data are rigorously monitored by internal fraud control teams, and we have no evidence that anyone has misused it.”

Industry analysts said the episode could leave the leagues open to further criticism that they are too loosely regulated.

“The single greatest threat to the daily fantasy sports industry is the misuse of insider information,” Mr. Wallach said. “It could imperil this nascent industry unless real, immediate and meaningful safeguards are put in place. If the industry is unwilling to undertake these reforms voluntarily, it will be imposed on them involuntarily as part of a regulatory framework.”

Already, there has been intensifying discussion on social media and among lawmakers over whether daily fantasy games are pushing the boundaries of an exemption in a 2006 federal law that has allowed them to operate. The law prohibited games like online poker but permitted fantasy play, deemed games of skill and not chance, under lobbying from professional sports leagues. The games are legal in all but five states.

But because Congress did not foresee how fantasy sports would explode, one member, Representative Frank Pallone Jr., Democrat of New Jersey, recently requested a hearing to explore the relationship between fantasy sports and gambling. “I really think if they had to justify themselves at a hearing they wouldn’t be able to,” Mr. Pallone said in a recent interview.

The data that DraftKings acknowledged was released by its employee, Ethan Haskell, showed which particular players were most used in all line-ups submitted to the site’s Millionaire Maker contests. Usually, that data is not released until the line-ups for all games are finalized. Getting it early, however, is of great advantage in making tactical decisions, especially when an entrant’s opponents do not have the information at all.

A spokeswoman for DraftKings said that Mr. Haskell simply made a mistake and that the company was certain he did not use the information improperly. She declined to go into specifics about the safeguards or the company’s auditing policies.

Representatives of both companies acknowledged that many employees of daily fantasy companies were players first and had continued to compete on other sites. Ben Brown, a founder of Daily Fantasy Sports Report, was first to disclose that Mr. Haskell had posted the information. Mr. Brown also said a FanDuel employee with access to its internal data, Matthew Boccio, had played on DraftKings; a FanDuel spokeswoman confirmed that.

"There’s a significant amount of crossover,” said Chris Grove, an industry analyst and editor of legalsportsreport.com. “The nature of the industry is so specialized and so new that, at the speed which they grew, they relied heavily on the player population.”

Many of these employees set the prices of players and the algorithms for scoring. In short, they make the market.

As daily fantasy sports has blossomed into a multibillion-dollar industry in the past year, DraftKings and FanDuel have become cherished sponsors of M.L.B. and N.F.L. franchises.
Eilers Research, which studies the industry, estimates that daily games will generate around $2.6 billion in entry fees this year and grow 41 percent annually, reaching $14.4 billion in 2020.

So high are the potential financial rewards that DraftKings and FanDuel have found eager partners in N.F.L. teams, even as league executives remain staunch opponents of sports betting.

Jerry Jones of the Dallas Cowboys and Robert K. Kraft of the New England Patriots have stakes in DraftKings, which recently struck a three-year deal with the N.F.L. to become a partner of the league’s International Series in Britain, where sports betting is legal. In addition, DraftKings has tapped hundreds of millions of dollars from Fox Sports, and FanDuel has raised similar amounts from investors like Comcast, NBC and KKR.

Adam Krejcik, a managing director at Eilers Research, said early missteps were often part of booming growth in a new and often misunderstood sector like daily fantasy sports. He said whether Mr. Haskell, the DraftKings employee, made an innocent mistake or not, the damage was done.

“Certainly does not look good from an optics standpoint, and it strengthens the case for additional oversight and regulation,” he said.

Mr. Grove, of legalsportsreport.com, said this may be a watershed moment for a sector that has resisted regulation but now may need it to prove its legitimacy.

“You have information that is valuable and should be tightly restricted,” Mr. Grove said. “There are people outside of the company that place value on that information. Is there any internal controls? Any audit process? The inability of the industry to produce a clear and compelling answer to these questions to anyone’s satisfaction is why it needs to be regulated.”