To System or Not to System...

I was looking at how I trade on Betfair and realised that even though I thought I was following a system, I keep going off piste and making trades that look like they may work. I just wondered what you guys did. Do you have a system that you follow or do you go on hunch/experience?

Bots without the Betfair API

If you want to write your own Betfair bot or an application that is driven from Betfair data and you don't want to use the API, then you could try screen scraping. The API is the fastest and safest way to go, but it is a bit pricey (£100-£200 per month). You could, of course, use the heavily throttled free version (60 updates a minute of prices from one market and then having to decode the information sent to you) but it is quite hobbled. Screen scraping is a free option but if the web page layout changes, you may need to revisit your code.

So, what is screen scraping? Well, basically, it is just automated web site reading. You tell your computer to go to a web site and look for specific bits of information and then return them to your program, every second or so. The Betfair web site is quite "busy" (it has lots of tables, images, etc on it), but there is another web site provided by Betfair that just has the essentials and this is much easier to screen scrape. The site is http://lite.betfair.com/ and is intended for mobile users. The nice people at Betfair have also provided some sample code, in the form of an Excel spreadsheet, which contains all the code you need to get started. Have a look at the Excel Tracking worksheet at: http://labs.betfair.com/labs.aspx

Good luck!

More thoughts on Bet Trader Pro software

I've been using Bet Trader Pro some more. I must admit, now I'm getting used to using a different interface, it is proving itself to be better than what I was previously using (initially Bet Angel Basic, the Betfair Direct and the Bet IE). With Bet Trader Pro you get to see all the prices across all the runners on one screen and using the ladder interface makes place trades on easily. The best bit is the speed that it fetches and displays the prices. You can see when the price is going to move, as it flickers between the one above or below. I havn't used many of the trading tools but I didn't initially like the way they were set up and have left looking at them till later. So far it is well worth the try. I am currently using the free trial minutes but would have to consider whether the current fee is good enough value. I'll see how I go.

Losing unconsciously

The more trading I do, the more I appreciate the advice about having a system, framework or set of trading rules to stick to. Successful trading is more than just being clever and knowing how to use your trading software, it is mainly psychology. By psychology, I mean it is about knowing your mind and taking control/managing your in-built natural reactions that, if followed, spell trading disaster. What in-built reactions?

We are wired to respond to the fear of loss and the threat of pain in a much more profound way than the potential for gain.

The mind is like an ice berg. Above the surface is the conscious mind. It’s the conscious mind we use every day for planning, analysis and making logical choices. The unconscious mind is like the larger part of the ice berg that lurks below the surface. Some people use the term subconscious mind or autonomic nervous system to refer to the unconscious mind. The unconscious handles a multitude of jobs which keep us alive and generally out of danger.

Have you ever been driving along at night? You’re zooming along, your mind mulling over the thoughts of the day, when WHOAH! Another car has pulled out in front of you. You don’t think, plan or analyse, you just turn the wheel and swerve. You come to a stop, safe, your heart is beating like a drum in your chest and your breathing is short and sharp. All those reactions were handled by your unconscious mind. If you had to think about it consciously, you’d be busy flying through the windscreen before you had decided to turn the wheel. The conscious mind is slow and deals with only one thing at a time, taking up to a half second to react. The unconscious mind handles a plethora of information simultaneously and instantaneously. The only problem is that this rapid response comes at a price.

Sometimes the automatic unconscious response is the wrong one in certain situations. In days gone by, feeling under threat and having adrenaline kick into your system and your body prepare for flight or fight would have saved your life. Nowadays, having to make a presentation in front of people can trigger the same response, leaving you feeling on edge, sweating and ready for combat! The same thing happens when trading, not that you necessary feel ready for combat but, our pre-disposed aversion to loss can make us let loses run.
The first step in getting around this is knowing why it happens. Using automated stop-losses can help, as it removes you from the equation (although I've not yet found any easy to set up and use stop-loss solutions in the software I have used). Other solutions involve tweaking the unconscious response in the context of trading, this would involve using an unconscious based technology, such as NLP or hypnosis. Another way would be to frame the trading situation in such a way that every trade is about protecting your bank (rather than making a profit), so the aim is always to focus on cutting losses. Working on the assumption that if the price swings away from you, it will keep moving away. Once you have closed the trade, then putting the last loss out of mind (so if the price suddenly bounces back, you don't start regretting following the system). The price will occasionally bounce back but in the long run, relying on that to happen is gambling of the worst kind and will lead to an empty bank.

Some great books on how the unconcious mind works are:

A book that goes into detail about how the unconscious mind has its beliefs installed and how to change them is (it can be pretty heavy going, so be prepared. It is very interesting and worth the read though):


The classic book on how our unconscious processes are used aginst us by marketers and advertisers and how to protect yourself:

How does Bet Trader Pro measure up?

I downloaded Bet Trader Pro on Sunday and gave it a try out tonight. What did I think of it? Well, one thing I can say is that it is fast. I had been using Bet IE recently and Bet Trader Pro leaves it standing speedwise. I was wondering how I kept missing so many market moves and now I can see. Running Bet IE and Bet Trader Pro side by side and you can see the numbers whizzing by and the price moving so much quicker on BTP. I'm not quite used to the interface and the tools on BTP yet and was reluctant to make many trades, but the two I did were matched. I didn't like the BTP stop loss feature very much as, unless I misunderstood how to use it, it seemed a bit slow to set. I would have liked to be able to preset my stop loss tick size and whether it is trailing or not and for it to be enabled with a checkbox when placing a trade. I guess I'm just lazy. I'll feedback more, when I've had more time to use it.

Blackle

An off topic post but one that people might find interesting and/or useful.

Did you know that a monitor uses more power when displaying white than when displaying black? In January 2007 a blog post titled Black Google Would Save 750 Megawatt-hours a Year proposed the theory that a black version of the Google search engine would save a fair bit of energy due to the popularity of the search engine. That is where Blackle comes in. It is a version of the google search engine but in black rather than white. It also keeps a running tally of how much energy has been saved by using it opposed to the normal google front page. So, if you are carbon conscious and want to save some energy, give Blackle a try.

Go to Blackle

The right direction

My trading is improving, although not as quickly as I would like. I still am getting caught by the market swinging against me quickly, but at least now I am getting out. I think I have learnt that lesson now. Although it is hard to take a definite loss rather than hang on to hope that the price is turning around, it is safer over all. I need to assume that if the price turns against me then it is going to keep on moving against me and so getting out is the only option. It is better to take a scratch trade (back and lay at the same price) than to take a loss. As long as I am not moving backwards, in the long run, I am heading towards my goal. At least now my bank should grow rather than get a hammering!