Data

If you want to test some theories about how the prices move due to volume changes or whatever your pet theories are, then you need some historical data to work with. Some places charge for access to their data but Betfair make it available for free, although you need to have at least 100 Betfair points, but that shouldn't be a problem to you guys. If you want to get hold of some, then go to: http://data.betfair.com/

Feels like being back at square one

I feel like a beginner again! I'm trying to trade on football, as I am usually not around in time to catch the horse racing at the moment. I keep making school boy level errors and it is costing me money. Last night, I set up some lays prior to kick off and then found that there was no in-play betting on that match! What a fool! Lesson painfully learnt. Can't believe I'm publicly admitting my stupidity!

On a more positive note, here is a website/forum that has a lot of useful betting/trading threads/comments/info, http://www.punterslounge.com/forum/

Devilishly Useful

Just found a site that you may find useful, it's called Bet Devil and provides you with stats, odds and a whole wealth of potentially useful data. Standard membership is free and so far it looks pretty good.

Efficient Markets

There is a theory, in the finance, known as "efficient market theory". The idea is that all the knowledge about market prices is already factored into the price, as the variety of people with money in the market between them would have fed in every piece of information. If an event happens then people will all react to the new information, so will under react and some will overreact but on average the market will be right. The efficient market theory states that it is not possible to consistently outperform the market by using any information that the market already knows, except through luck. So, if this is true, the only way to beat the market consistently is through luck alone, which will eventually run out. I'm mentioning this because I recently had a conversation with a friend who is involved in the financial markets and we were talking about the parallels between the bet exchange markets and the financial market and he mentioned efficient market theory. Anyone have any thoughts?

Quiet day

If anyone still wants to have a read of the special report I wrote a few weeks ago, then grab it now, as I am in the midst of a big rewrite and will be withdrawing it soon. Click here to download it.

If Betfair software is more your thing, then have a look at my eBook, "How to build your own Betfair bot or trading software".

I only had one trade today, as I was out with Sam (the missus) and my little boy Harry, trying to find some fancy dress outfits for Sam's little sisters birthday party next week. No joy. Harry found a viking hat that he liked, so much so that he refused to take it off and needed some serious distraction and decoy work done! Hopefully I'll get some in tomorrow.

Having a plan

Did you ever play table tennis, or ping pong as we called it, when you were little? Can you remember the feeling of pure satisfaction when the ball would float up to just the right spot and you smashed it back, bouncing it off your unprepared opponents head? It felt pretty good.

Now, the ping pong table is about 9ft long and good players can get that ball moving at around 100 miles per hour. To hit that little ball, taking spin, bounce and a whole load of other variables into account seems like an impossible task. How to do you calculate the trajectory, taking air resistance into account, adjusting for spin, assuming a return velocity of 80 miles per hour plus or minus 20? The answer is you don't. You don't have time to calculate, to cogitate and plan at the time, you just act and react.

Now, what makes a good player and what makes a bad player? Well, the good player has learnt to play the game, either by playing lots of different people, taking the lessons when they lost and any coaching that they could get. The first time they played, the ball probably bounced off their heads a few times or they just missed the table completely. With some determination, a willingness to make mistakes and learn from them and lots of practice they managed to learn to play the game. If you asked any of them to describe their best ever game, chances are it would be a time when they just "got into the zone", they didn't think about it, they just played. Can you remember a time, when you were "in the zone"? May be during a sporting event or at work or something, where you just acted without thinking about it and everything just flowed?

When you're "in the zone" your conscious mind steps out the way and your non-conscious mind does what it does best, react. When we are trading a fast moving market, e.g. a horse race getting close to the off, if we want to get in quickly on a trend we don't have time to think every move through, we have to act. This means trusting our experience, that is, trusting our non-conscious mind, or gut feel. This can be hard and by second guessing ourselves and overly thinking, we can stay out of the zone and miss the majority of a price move or not get out in time. So, how do we get into the zone? Well, first you need to have done the ground work and took the knocks, learning how to trade and follow the market. Next you need to be able to let go and trust what you've learnt. The final and most important step is that you have to go in with a plan. You don't have time to plan during the session, as things can happen too fast, all your planning needs to be done up-front first, so you can just act. You need to know your rules. When do you get into a trade, when do you get out, what do you do if the market moves against you and when. The more specific the better, the faster you can act and the less you have to think and pull yourself out of the zone.

Fundamentalism?

In the land of stock and share trading, someone who uses a company's results, sales figures, P/e ratio, etc is said to use the fundamentals to make their decision, whereas someone who just uses the price and volume charts for short term trades is said to be a technical trader. I think the same split can be seen in Bet exchange trading, e.g. someone who scalps the horse racing, 10 minutes before the off, without care or concern who is racing, who trained who etc but just the prices and volumes, as they move, shift and do their merry dance is a technical trader. Whereas, someone taking a longer duration position, may study the race form and decide that horse X is a steamer and so put on an early back, then come back later and close the trade with a (hopefully) short priced lay.

What would interest me is finding out how many people trade technically and how many use the fundamentals or both and on what markets. My gut feel, after speaking with a few people, is that horse racing before the off has a number of technical traders but the other markets predominantly require some fundamentals, e.g. starting off with an idea of who will win/score first goal/lead the field and then possibly scalp the prices in-play or just hold back and close the trade at a certain point. I'd be interested to hear what you guys do.