Day 8 - Lost the plot, and almost lost the lot!

I lost £328 today, but it could easily have been more than £1000. This raises huge doubts about whether I am cut out for trading.

Trading requires patience, discipline and an aversion to gambling. I have little patience, no discipline, and I gamble at the drop of a hat. And I don't know if I can ever change.

It may seem completely stupid, but I am seriously thinking about increasing my stakes from £300 to £500. The reason for that is that I want to take fewer risks, but of course, that means that each risk will be bigger. I'm aiming to make fewer, better quality trades, and reduce the number of bad, impatient trades  Another option would have been to lower my expectations and make quality trades at the same stake level, but that doesn't turn me on. It could all go belly up very quickly.

Sometimes when you enter a market, the price can immediately, in a split second, jump six ticks against you, and there's nothing to warn you that it is about to happen. You just have to deal with the situation that is before you.

Today

Races traded: 30

P/L -£328.36

Average P/L -£10.95

Total

Races traded: 310

P/L £1613.42

Average P/L: £5.20

Day 7 - A good cautious day

I traded 33 races today with just one tiny loss. It might sound strange, but it was because I was doing so well that I was anxious for the racing to finish. The reason for that is that I feared that one big loss would come along and cancel out all the profit I'd gained from my hard work. I can remember counting ten races still to go, and wishing they'd hurry up and finish. I was also trying to be extra careful not to lose. That meant that some races produced tiny profits. But those ten races produced a profit of about £60, which I consider to be pretty good money. Although the winnings per race may be tiny, when you add them up, they are quite significant. While I realise that I could lose all of today's profit on tomorrow's first race, that doesn't seem as bad as it would have been had it happened tonight.

Profit for the day was £281. And that takes me to my highest closing balance since I began. It also completes my first week. In a way, the time is just as important as the money, because the longer I can continue to be in profit, and better still, increase the profits, the greater the chance that I can actually do this profitably long term, and that it's not just a fluke.

Today

Races traded: 33

P/L £281.86

Average P/L £8.54

Total

Races traded: 280

P/L £1941.78

Average P/L: £6.93

Day 6 - What a difference!

I was like a completely different person trading today. At times it felt like I really knew what I was doing. I was seriously planning to take this up as a career when it came right back and bit me on the bum with a £167 loss, just to wipe the smug look from my face.

Still, I finished the day with a profit of £365.70. If I could do that every day, I'd be laughing.

It felt like a very long day today, starting at 1:30 and finishing at 8:20. I would maybe need to get in training for this if I was to do it full time. It's probably a young man's game, and that's not me anymore.

I'm off to have a well deserved drink. Back later with my day's figures...

Today

Races traded: 48

P/L £365.70

Average P/L £7.62

Total

Races traded: 247

P/L £1659.92

Average P/L: £6.72

Day 5 - A shocker!!!

I had a terrible day that has not only cost me £500, but has knocked my confidence for six. I felt I got very few breaks. The markets constantly moved against me, and I was able to find the winners with amazing regularity by laying them and leaving them red. When I go in play, and I nearly always do, the prices go against me 90% of the time. It's almost as if they know!

It would even have been worse, but I profited by £260 in the last two races. If I'm to succeed with this, then I can't have many days like that, unless I have more days like my first two.

I lost £148 on my 5th race, and never got back in profit after that.

It still leaves me £1300 ahead and that allows me a fair chance to see if I can make something of this. A good winning day tomorrow with everything going my way would certainly help my confidence.

Today

Races traded: 49

P/L -£499.31

Average P/L: -£10.19

Total

Races traded: 199

P/L £1294.22

Average P/L: £6.50

Looking over my old trading record

I had a quick look back at my old trading record, and it surprises me that, despite the erratic way in which I trade, I produced fairly consistent profits.

My first day of trading was 2 July 2009, and I recall that I made over £6000 in July 2009. There were lots of losing races, but very few losing days. And that was despite the fact that when I lost a race, I generally lost BIG.

Back then, I was working full time, and so my trading was restricted to evenings, weekends and days off. I created this blog on 7 August 2009, and in the 22 days in which I traded between then and 28 September 2009, I made a total profit of £6143. So, in something like 52 days trading, I made over £12,000. There were two days when I lost £994 and £896, but the wins far outweighed the losses.

This time around I seem to have continued just as I left off. The question I keep asking myself is "Is it just luck?"

I described how on Thursday I was very lucky to turn an almost certain £230 loss into a £200 profit. There was no skill in that at all. However, yesterday there was a race where I felt very unlucky to lose rather than make over £150 profit. So maybe it is just swings and roundabouts.

In the four days I've traded since my return, I've made almost £1800, so that's a total of roughly £14,000 in 56 days of trading; an average profit of £250 a day.

Someone posted a comment saying that in order to tell if you have an edge, you need to test it with 1000 bets or more. I must have traded well over 1000 races in those 56 days, and surely luck would have evened itself out by now.

I know that it's considered wrong to let trades go in play, but maybe in the long run it doesn't matter. Maybe they just even themselves out.

As well as the £14,000 profit, there's also the commission I've paid on those races. I have paid well over £100 commission on these four days alone.

One thing I was surprised to notice was that I had 34 winning races on the trot the other day. I would estimate that the proportion of races in which I am all green at the off to be less than 10%. So it is likely that in 30 of those 34 races, I was red on at least one horse, and probably more. It seems almost impossible that all of them ended in a profit. Those 34 races produced a total profit of over £1100.

I would much prefer to make £7 or so on every race before they jumped off, but maybe what I'm doing actually works. I'm probably at a greater risk of heart attack than the more conventional traders though.

One other thing, in 55 of those 56 days, I was probably full of alcohol by the end of trading. I intend to take this more seriously, and yesterday I kicked the alcohol into touch, at least until I had finished trading. A little alcohol can help you relax, but I was so relaxed at the end of trading on Saturday that I could barely stay awake!

Day 4

A profitable day today that cancels yesterday's losses. £146 is not bad for a few hours sitting at a computer, and we had an hour when Betfair was unavailable.

Today's and Total Profit and Loss

Today

Races traded: 21

P/L £146.17

Average P/L: £6.96

Total

Races traded: 150

P/L £1793.53

Average P/L: £11.96

Day 3

Crash, bang, wollop! Back down to Earth with a losing day.

I got off to a bad start with the 12:55 at Newbury which I think was maybe the Arabian race or something. It suffered from poor liquidity, and I shouldn't have got involved. I lost the second race too, but I was still feeling confident that things would pick up. Confidence is a by product of winning. You don't just gain financially, but you begin to expect to win.

I felt there were too many races going off too soon after each other on a busy Saturday, but ironically that seemed to be when I did best. It was when things quietened down in the evening and we got back to a more comfortable 10 minute gap between races that things went badly wrong.

After the 5:20 race at Perth, I was £500 in profit for the day, then the wheels came off, and I ended up losing £115. But this has not deterred me, and I think I've learned from it.

Firstly and most importantly, I must stop drinking alcohol while I'm doing this. I'll say no more about that for now because hopefully it will no longer be a factor.

Secondly, I need to learn to stick to the plan and trade, and not just simply gamble in an attempt to chase my losses. I know that I lose when I gamble, so there's no point in doing it.

The good thing I've learned is that after 129 races, I'm still £1600 ahead; albeit after 119 races, I was £2200 ahead.

Due to lack of time and liquidity, I didn't trade at Tramore. I wish I hadn't traded at Lingfield where in five races, I lost £725.

Profit and Loss for the day

Total Profit and Loss

Friday 17 August 2012

After a three year gap, I'm back trading again. Or should I more accurately call it trading / gambling? I say that because I have very poor discipline when it comes to trading. My brain doesn't allow me to guarantee myself a relatively small loss, so I usually end up going in play to try to green out. It can get very hairy, and I've had some very lucky escapes, but in the past two days since I returned to trading, my luck has been holding out, and I've made a total profit of over £1700.

One of those lucky scrapes was in Thursday's Beverley 3:35 race when I layed a horse to a liability of £230. The market moved against me, and I went in play. The horse traded at 1.01 before it finally lost. During all of the time that was happening, I was frozen like a rabbit in headlights, and doing nothing about it. Despite my terrible trading, I was rewarded with a profit of £200 before commission instead of losing £230; a swing of £430 to my day's profits in that race alone, and there were other races where I was close to losing large amounts.

On Friday, I slightly amended my tactics and set a limit of £300 liability on transactions on any single horse. That can mean a liability of £600 though if I bet horse A to win and horse B to lose.

I played 78 races in the two days and lost in only 6 of them. The question is, am I doing something right, or am I just being lucky? If you were to place a large number of bets randomly, you should expect to break even before commission is deducted. I'm doing significantly better than that, but I'm not sure if 78 races is a large enough sample to say that I have an edge.

An average daily profit of £850 would be very nice, thank you very much; as would a small fraction of that,

So far, the losses have tended to come towards the end of the day when I was already sitting pretty with a good profit. I have to make sure that if I have a big loss near the beginning of the day that I don't go into chase mode. There might even be something to be said for taking a break and missing the next race if that happens. Another thing I should probably do is remind myself that I'm not starting from zero, but from a £1700 profit, and that the next race won't be the first, but the 79th in a series of hopefully thousands..

Thursday 16 August 2012

Friday 17 August 2012

The flaw

The flaw is that the historical results have the benefit of being able to look into the future; a powerful tool if you are trying to predict horse races!

That's why the system is at its best when the day is higher than the month. On 12th January 2009, the program looks for each horse's previous runs in races before 12/01/2009, but it receives their runs prior to 01/12/2009, including the races on 12th January!.

I've been very lucky for two reasons. I made nearly £1000 on an unprofitable system over 6 weeks with more than 1000 bets. I was also lucky to have spotted the bug on one of the days where it had any effect.

So I've gone back to the drawing board, and I think the basis of my system is still good, but nowhere near as profitable as I had previously led myself to believe.

The analysis

I've now had a chance to analyse the effect of the bug.

Firstly, in deciding whether or not a horse is a selection, the program looks at all of the previous races relating to that horse. The bug is due to the default method that dates are handled. I ask it for all of the races before 07/11/2009, and instead of giving me the races before 7th November, it gives me the races before 11th July. It expects the American date format. However, it handles most dates correctly. It knows that 23/09/2009 has to be 23rd September, because there isn't a 23rd month.

The bug only effects 11 days every month; the days before the 13th, but not the day that is equal to the month. From the 13th onwards, the system is a loss maker. For those 11 days each month, the system (with the bug) is hugely profitable. Then I noticed something even more exciting; there is a large number of selections that are made by the system WITH the bug as well as the system WITHOUT the bug. By removing the bugless selections, the system is even more profitable.

That's not all though, I discovered that if I removed the selections that are made on days where the month is higher than the day, the system becomes even more profitable, because the others make a loss. So it makes big profits on 12th January, and big losses on 1st December.

I had discovered, by pure chance, the perfect system. I'd only have to place bets on about 70 days a year, and have fewer selections to lay on those days. I'd also be fantastically rich, and that would be useful as I would spend the second half of every month in a different sunny country, where I'd have my own apartment.

Then I spotted a flaw in my plan. Maybe you have too?

Oh dear!

The system is now on hold, and may even be finished.

I spotted that the selections made from historical data were not exactly the same as those being selected each day. It turns out that there was a bug in the program that makes the selections from historical data. I've fixed the bug, and it now shows the system to be a loss maker.

This is very disappointing, as well as embarrassing! All may not be lost though. I need to compare the selections from the buggy code with the selections from the debugged code, and try to work out how different they are. It sounds daft, but it's possible that I may end up adding the bug to the code that makes the daily selections.

Still, I've made almost £1000 in six weeks, so it's not all bad.

Will post again once I've analysed the data. Hopefully I'll be able to salvage something from it.

Day 42

Win Lay System - Day 42
Today's starting bank: 3382.28
Today's profit: -418.47
Profit since 28/09/2009: 963.81
New bank: 2963.81
New stake liability: 74.10



The target graph now incorporates Maria's Laying System results in yellow. My lay results in blue and target in red.

Day 41

Win Lay System - Day 41
Today's starting bank: 3849.15
Today's profit: -466.87 (corrected)
Profit since 28/09/2009: 1382.28
New bank: 3382.28
New stake liability: 84.56

Another worst day!

I suppose if the system is going to behave the way that the historical records suggest, then I should be having worst and best days regularly. Worst days are harder to take though because, while I'm living it, those days make me doubt if it is really going to work at all.

I take some comfort in having reduced my liability level to 2.5% of bank.

Saturday preview

Of today's 638 declared runners, I'll be laying 410.

At least they can't all win!

Day 40

Win Lay System - Day 40
Today's starting bank: 3108.38
Today's profit: 740.77
Profit since 28/09/2009: 1849.15
New bank: 3849.15
New stake liability: 96.23

I had my worst day earlier this week, and now my best. :0

Despite today's most welcome profits, I'm dropping the daily liability to 2.5% of bank. I feel I need to reduce the risk of going bust because a lot can happen in a day. When I automate the bet placement, I'll try to recalculate my bank and stake liability before each race.

Day 39

Win Lay System - Day 39
Today's starting bank: 3030.04
Today's profit: 78.34
Profit since 28/09/2009: 1108.38
New bank: 3108.38
New stake liability: 93.25

And here's what you would have won...

Here's the adventures of my £2000 bank had I used the system, as it is now, from the beginning on 28th September 2009.

Day 38

Win Lay System - Day 38
Today's starting bank: 3204.41
Today's profit: -174.37
Profit since 28/09/2009: 1030.04
New bank: 3030.04
New stake liability: 90.90

The vastly increased number of selections (there were around 220 today) means that it would take too much time to produce strike rate and projection figures. I may be able to do this programatically in the future.

I've had another look at the historical data in relation to my current set of selections (set A) and the new set (B) that I identified recently. As well as that I've analysed those horses that are included in both sets (the intersection of A and B) as well as the combined set of horses (the union of A and B).

Here's how they performed in the 684 days from December 2007 with a fixed liability of £100 on each selection and commission decucted:

Set A
Average price: 12.05
Strike rate: 108745 wins from 117501 selections = 92.55%
Profit: £105,213 (£153.82 per day)
Winning days: 391 (57.16%)
Highest daily win: £2243
Highest daily loss: £940

Set B
Average price: 11.72
Strike rate: 111682 wins from 121035 selections = 92.27%
Profit: £105,522 (£154.27 per day)
Winning days: 395 (57.75%)
Highest daily win: £2867
Highest daily loss: £870

Intersection of A and B
Average price: 12.78
Strike rate: 61470 wins from 65849 selections = 93.35%
Profit: £84,268 (£123.20 per day)
Winning days: 402 (58.77%)
Highest daily win: £1705
Highest daily loss: £800

Union of A and B
Average price: 11.56
Strike rate: 158957 wins from 172687 selections = 92.05%
Profit: £132,749 (£194.08 per day)
Winning days: 400 (58.48%)
Highest daily win: £2703
Highest daily loss: £1025

As you might expect, the quality selections are in the intersection, but quality seems to be far less important than quantity, and the union comes out tops on profit. It's likely that I'll now start laying horses from both A and B. That could be an average of 230 per day, in which case I really need to start work on automating the bet placements.

These figures look extremely impressive; in fact they seem almost too good to be true. I plan to put some checks in place that will help to highlight any errors I'm making in producing these figures.

The figures produced by using 3% of bank rather than a fixed liability of £100 are astronomical and would be impossible to achieve in real life.

It appears I increased the number of selections a few days too late, as I just missed out on a day where I would have made about £700.

Day 37

Win Lay System - Day 37
Today's starting bank: 3558.28
Today's profit: -353.87
Profit since 28/09/2009: 1204.41
New bank: 3204.41
New stake liability: 96.13

Today's strike rate: 68 wins from 78 selections = 87.18%
Strike rate since start: 840 wins from 906 selections = 92.72%

Projections for 27/09/2010
Strike rate: 8965 wins from 9707 selections = 92.36%
Profit: £41,380.89

My worst day so far. I estimate that it would have been a small profit with the system as it was before yesterday's change. I did think it would be more risky, but the upside is that it should be more profitable in the long run.

A sets maniac

You see what I did there?

In yesterday's post I said something that at best was very ambiguous, and at worst, complete nonsense. To paraphrase, I said that all of the horses I'm laying are underpriced. On my way to expressing my thoughts on where I might be going with my systems, I wish to clarify on two matters.

Firstly, when I say "horses", what I mean is an "entry"; a particular horse entered in a particular race, eg Red Rum in today's 2:30 at Plumpton might fit the requirements for my system, but Red Rum in tomorrow's 3:50 at Kempton could possibly not. So when I refer to a "horse", please replace it with "entry".

Secondly, when I say that they are all underpriced, what I mean is that they all belong to a set of horses with a common characteristic. I believe I've identified that laying every horse in that set (I'll call it set A) produces a profit. However, that is not to say that each individual horse in set A is underpriced.

A couple of nights ago, I identified another set (B), with different characteristics to A, which also appear to be worth laying. This has got me thinking. I've still to check, but I expect there will be horses that are included in both A and B, as well as horses that are included in neither A nor B. I could create a number of sets of horses, and categorise each set as underpriced, overpriced or correctly priced, based on past results.

A set of horses could be, for example:
Templegate's tips
Winners last time out
Horses beaten by less than half a length last time out
Winners at course and distance
Horses that have previously worn some sort of face furniture
The daily newspaper nap selections
Horses stepping up in distance for the first time
etc.

If a horse fits into only underpriced category sets, then would that suggest that the horse is actually underpriced? Probably not, but I would expect those horses that fit several underpriced categories to be very profitable to lay. Likewise, those horses in several overpriced sets should be very profitable to back. In addition, it may be worth considering increasing or decreasing stakes depending on the number and categories of sets a horses appears in.

Juat a thought.