Monday, 8 February 2010

Four Trading Strategies

There are probably a hundred different, already implemented, trading strategies on Betfair. Someone will have - I'm sure - hooked the Fink Tank football predictor up to Betfair. Some of these will be fiendishly complex, others will simple. Some will make money for a short while, others will remain profitable for a long time, many will never consistently make money.

All trading systems will fall into one of four broad categories:

Algorithms that are better at calculating probabilities than most gamblers. I know of one system that trades only cricket matches, and it relies on the fact that many people over-react when a wicket goes down. Apparently, one wicket falling has less impact than many gamblers expect (in the short run, they over-estimate its importance). By immediately buying the side who has lost the wicket, assuming the odds have swung enough, the system has had significantly positive returns over the last several years. Another - also cricket related - system was based on the fact that people significantly over-estimate the probability of draws. For a long-while this was also pretty profitable - until other gamblers noted that Betfair odds were out of line with history. Each of these systems is based upon a better ability to calculate true odds than most punters.

Arbitrage related algorithms. The system described in this post, was an arbitrage related one. Arbitrage - executed correctly - is riskless profits. The principle is always roughly the same: there will be multiple markets or selections whose results are highly correlated in one way or another - and whose prices should move in lock-step. To take a political example, the Betfair markets on the individual seats should match up pretty accurately to the party seats line (a 50/50 bet on the number of seats individual parties will achieve). Frequently it does not. During the US Primaries, Hillary Clinton was still the favourite, even when the state betting was strongly favouring Barack Obama. There was arbitrage opportunity backing Hillary in the individual States, and backing Barack to be nominee. Some arbitrage happens between Betfair and Betdaq, and/or the spreadbetting firms and/or traditional bookmakers. For example, bookmakers typically give each-way odds based on a simple 1/4 formula. It used to be possible to look for races with strong favourites, back the second or third horses each way with bookmakers, and then sell the win portion of the bet on Betfair. This was enormously profitable - until the bookmakers realised their mistakes.

Flow of Funds Systems. This is what people tend to think of when they think of financial algorithmic trading; it is systems that are plugged into price feeds, monitoring movements, and detecting where prices are going to go. Flow of funds trading is unique because it requires limited information about the underlying market: you don't need to be a horse racing expert, just a maths whizz. The simplest flow of funds trading system will be the one we implement on here first: a simple market making system. Market making involves providing liquidity to a market: i.e., being prepared to take other peoples' bets. In return for this, prices you put into the system include an over-round (that is, the raw implied probabilities add up to more than 100%). If you are able to correctly judge the market so that you get roughly similar numbers of people backing each of the runners, then you will profit.

Informational Advantage Systems. "The most valuable commodity," said Gordon Gecko to Bud Fox, "is information". The first person to see that a cricket wicket has fallen, or a goal scored, is able to adjust prices that bit quicker. (To encourage market making, Betfair has a 5 second delay on bet placing - but this still gives opportunities when a foolish cricket market maker goes on a bathroom break at just the wrong moment.) Given limited resources, it will be extremely hard for you or I to know things other people do not: however, it is possible we will be able to react quicker if we leave the trading in the hands of a 'bot. There are a number of Python Bayesian analysis tools that might be useful to automatically divine of a piece of information is likely to move a market... before human traders can react.

Now, I have never written a bot based around types one or two (although I have made money with manual trading of this type.) I currently run a reasonably successful marketmaking bot that prices up perhaps 20-30 markets, and makes c. £300-400/month. (One of the impetuses behind this blog was that if I wrote about it, I might get around to improving it!) I am very keen to deploy a system based on informational advantage - and after we cover building a market making 'bot, I think we'll go straight onto Bayesian analysis.

So: until next time...

54 comments:

  1. Hi, nice blogspot. How the HECK do I contact the writer of this blog??

    I've looked at several bots out there and they cannot ful-fill what I require. I'm looking for an ace programmer to work with me on a personal basis to create 2 bots that I've written out. I cannot do programming but have won a lot of money from an initial stake of £10 on the betting exchanges and have been on premium charges shortly after it was introduced.

    The bots will be very effective, legal and will profit every day; half manually at first, (which I will do solely), but becoming fully auto when completed. Because of the nature of my work I wouldn't be prepared to send the information willy-nilly over the internet as you will appreciate.

    I'm wondering if there's anyone at your office or a contact that would like to work this with me and who have the enthusiasm and a little time to spare.

    My 1st bot has 12 rules, but, the 1st rule (if made), can enable me to show it profiting straight away!! Every single day, some days average, some days fantastic, never losing on any day. It is not a 'scalping' bot and no matter which way the markets move is irrelevant.

    I hope you can suggest someone that is trustworthy and to work with me.

    Thank You

    Steve H

    ReplyDelete
    Replies
    1. Hi Steve,

      If your project is still available, we can help you !
      We are a team of software engineers, specialized in sports betting.

      You can contact us via our website : www.trigger-dev.com

      Regards,

      Clint.

      Delete
  2. Hi...
    http://1-tipster.blogspot.com/
    gambling related web directory...

    ReplyDelete
  3. Excellent post, I agree with you 100%! I’m always scouring the Internet for new information and learning whatever I can, and in doing so I sometimes leave comments on blogs. I don’t do it for SEO purposes necessarily, but to learn new things.

    Togel2000

    ReplyDelete
  4. I'm impressed, I must say. Very rarely do I come across a blog that's both informative and entertaining, and let me tell you, you've hit the nail on the head. Your blog is important; the issue is something that not enough people are talking intelligently about.

    bdo168.com

    ReplyDelete
  5. must say that overall I am really impressed with this blog. It is easy to see that you are passionate about your writing. If only I had your writing ability I look forward to more updates and will be returning.

    dewasbo.net

    ReplyDelete
  6. This is a nice and informative, containing all information and also has a great impact on the new technology. Thanks for sharing it

    nagapoker.biz

    ReplyDelete
  7. Continue to keep sharing such ideas during the foreseeable future in addition. This was basically what I had been searching for, and i am happy to arrived here

    npselalu.com

    ReplyDelete
  8. Thank you for another fantastic posting. Where else could anyone get that kind of information in such a perfect way of writing? I have a speech next week, and I was looking for more info ;)

    dewapoker

    ReplyDelete
  9. You should write about the model/version on the blog. You can expose it's perfect. Your blog examination should widen your readership.I am really grateful for your blog post. I find a lot of approaches after visiting your post. Great work..looking for affordable and trusted hosting?come and visit

    agen88.net

    ReplyDelete
  10. For instance, coffee shops have menus of brown color or shades of the same hue in order to bring the atmosphere of the cafe and set it in the menu. Whereas, a Japanese or Chinese restaurant would make a more colorful menu that uses images that reflect their culture and their food – since their dishes include various colors. This blog will be showing you some of the most amazing menu designs for your use.I seriously appreciate people like you! Take care!!;)!!visit my site and Play


    dewabet.net

    ReplyDelete
  11. This is an interesting blog that you have posted, you shares a lot of things about online gambling platform. My site is http://www.zeusplay.com/en/.

    ReplyDelete
  12. I’m considering buying this trading software, anyone currently using it that can provide feedback?

    ATS 1Trader Platform

    ReplyDelete
  13. Great Article it its really informative and innovative keep us posted with new updates. its was really valuable. thanks a lot. Code Fibo Review

    ReplyDelete
  14. moon sign lord of the day, moon star, ascendent sign lord and ascendent star lord. Australian Online Betting

    ReplyDelete
  15. Sportsb8 is an Best betting websites
    Providing the all types of Spread Betting with easiest and secure than other Betting Site.

    ReplyDelete
  16. Sportsb8 is providing the Best Betting Offers on the Betting Exchange, click on link get more information about its.

    ReplyDelete
  17. thank the good topic.
    Welcome To Casino online Please Click the website
    thank you
    baccarat
    บาคาร่า
    จีคลับ

    ReplyDelete
  18. Nice article great post comment information thanks for sharing

    หนังสงคราม

    ReplyDelete
  19. Poipet Casino at the Forefront of Asia
    GclubIs the site Poipet. Asia's leading online casino game provider for more than 10 years, with a system that offers the most up-to-date and exciting online gaming risk on the site Poipet. This casino has been And is of interest to Asian gamblers. Because the website service g club. Online casinos are open to honest and transparent, and continue to evolve the system of online gambling games, so it is not strange that now playing online gambling games are popular. There are a lot of gamblers in the East, the bettor can find and feel the atmosphere of playing online games easy. Just as you have a Wi-Fi only. Players can play all online gambling on the web page Poipet. Our casino. When it comes to gambling, online gamblers can contact our clerks at any time. Betting on the web Royal1688

    ReplyDelete
  20. Casino gclub one way rich you should not miss.
    Holiday PalaceWeb Casino Celebrity Club One of the ways to get rich is to not miss every time a risk comes to play with online casino games. Our gambling houses will know that the main reason why most gamblers choose to play online casino games with us. Because online gambling in each form is available on the gambling web site. Our online casino is an online gambling that was chosen as well. And more importantly. Online Casino Games on the G-Club Website Our casino also offers bonus up to a maximum of two hundred thousand dollars, so it is not strange that now the Web Poopet. Our casino has the largest number of members. That is the ranking of the web gclub. The top online casinos that gamblers choose to use it. So if a gambler is thinking of playing online gambling games, do not forget to opt for a casino web site. Because we are happy to serve players whenever the player wishes. Players can find and experience the atmosphere of online gambling with online gamblers around the world 24 hours a day Gclub

    ReplyDelete
  21. Making money from online gaming is not difficult.
    Ruby888It is an online casino that provides online gambling services that meet the standards and gambling websites. This online casino. Also a casino site. The first gambler that Thai gamblers favorite and most popular. Thailand is considered one of the people who love to risk and risk the sun, so it is not strange that the Web Poipet. This casino will have a lot of gamblers are Thai people and on the site G-Club. The online casino also has many online betting games. Whether playing baccarat online play. Online games play roulette online. Whether it is online gambling games of any kind. Players can choose to play all online casino games on the site of this online casino. Because the player can play all the games that need it and the website gclub. The casino also has a team that is very capable to serve as a specialist to the player all day and night. So you are going to play gambling online with gambling websites. This online casino is the bettor to get the best service from us, you can be part of the online gambling game with a player around the world at the websiteIBCbet

    ReplyDelete

  22. คาสิโนออนไลน์ Website to gamble in the current period. Gambling to the World Wide Gambling industry boom How to choose the world wide. Online casino games are fun activities that are fun to play regularly. The new desire to win a chance to create a good channel. The choice of financial options is superb. Meet new betting games. The choice to play the game that brings all of you to the overwhelming victory. Meet the ultimate gambling luck. Open the path of fun. Online Casino, Baccarat, Slots, Slots and many other leading sports are one of the online betting sites that open the path to happiness. With many casinos are well known. Recreational games open the path of finance that perfect. An opportunity to create a fun way to enjoy every day. Open your eyes to the gambling industry. Join the fun. With more than 200 games to choose from more fun games, dividends and special discounts for all you have to play with. Gambling at the Web Ruby888

    ReplyDelete
  23. Online casinos have a real risk.
    รอยัล1688 The website is open to online casino games that play all games firmly. The service is always provided to the users. Our online gambling games have provided the best online casino games to meet the standards and recognition of all players. Play online gambling games that are more fun to play. All online gambling games are designed to match the current one. Easy to use and full of fun. The choice to gamble online games to make a profit for you. Do not miss out on your favorite online casino games if you play our online casino games. Our online gambling games are also designed for you to gamble in real time. Live betting comes from Cambodia's famous gambling house. Bet at any time you want. No matter which online gambling games are available at any time. Risky online gambling games that can meet your needs. We are ready to serve you every time, and the users also make profit from online games are overwhelming with gambling games that give real money to users. viva3388

    ReplyDelete
  24. I really appreciate your professional approach.These are pieces of very useful information that will be of great use for me in future.

    หนังใหม่

    ReplyDelete
  25. Enthusiastic beginning is very common in every sector when anyone enters into a new world. But it is very hard to keep such enthusiasm for a long time after huddles come out from invited sources. Read this blog and know more about this topic.vegus168

    ReplyDelete
  26. Actually, I am facing some difficulties to understand the meaning of the blog. If you have any short video film related to your blog, then I would request you to share here. It would be great help.สมัคร เว็บ บอล

    ReplyDelete
  27. nice post, keep up with this interesting work. It really is good to know that this topic is being covered also on this web site so cheers for taking time to discuss this!
    FIFA55

    ReplyDelete
  28. Some famous online casinos have live dealer games in their online casinos to provide the pathogens for live casino bonus players who prefer to play with the real dealer rather than using the software.

    ReplyDelete
  29. I constantly like to read a top quality content having accurate info pertaining to the subject and the exact same thing I found in this article. Nice job.
    ดูบอลย้อนหลัง

    ReplyDelete
  30. This is very educational content and written well for a change. It's nice to see that some people still understand how to write a quality post!
    bola88

    ReplyDelete
  31. This is really nice to read content of this blog. A is very extensive and vast knowledgeable platform has been given by this blog. I really appreciate this blog to has such kind of educational knowledge.
    I am thankful to this blog for assisting me. I added some specified clues which are really important for me to use them in my writing skill. Really helpful stuff made by this blog.
    วิธีโกงไพ่

    ReplyDelete
  32. This is an amazing website.http://www.andheriescortservices.in/andheri-call-girls.html I am very happy in joining this website
    Andheri escorts
    Andheri independent escorts
    Andheri call girls
    Mumbai Escorts
    Mumbai Call Girls
    Mira Road Call Girls
    Goregaon Escorts

    ReplyDelete
  33. All the stuffs are great but there are some glitch so fix that buddy and thankx for good stuff.

    Aerocity Escorts

    Delhi escorts

    ReplyDelete
  34. casa98asia online gambling We are direct representatives of casa98 website. The most popular service in Thailand. Online gambling All casinos can play casa98 through the web or on mobile phones (Iphone or Android), gambling websites and foreign gambling websites, which have a trustworthy security system as well as international standards. For the online betting through the Internet and it's sports betting online or casinos. Today's Web Available all day. They can be contacted by calling the vocabulary. Chat through the web or online, with professional staff waiting for service throughout the period without any stop. Take time to deposit no more than 5 minutes and withdraw up to 15 minutes with a lot of promotions if you choose. Online gambling with casa98 will require casa98asia fast service.

    ReplyDelete
  35. I am glad you take pride in what you write. This makes you stand way out from many other writers that push poorly written content.
    judi online

    ReplyDelete
  36. I have a big family. I live with my mom, my dad, my two sisters, and my brother. Both of my sisters
    are older than me,but my brother is younger. My sister Elizabeth is the oldest. She is sixteen years
    old. Carrie is thirteen 928bet old.We used to share a He helps little kids are sick. room, when
    we moved to our new town,we each got rooms of our own. My brother John is youngest.He is only
    years old. My mom’s name is Sally. She used to be a teacher, but now she stays home to take
    us.My dad’s name is Tim they is a doc.

    ReplyDelete
  37. It was wondering if I could use this write-up on my other website, I will link it back to your website though.Great Thanks.
    안전놀이터

    ReplyDelete
  38. Clients marketing strategies that you choose to useful survey before establishing. It can be straightforward to jot down top-quality write-up like this. situs judi online

    ReplyDelete
  39. Great article with excellent idea!Thank you for such a valuable article. I really appreciate for this great information.. Bonus

    ReplyDelete
  40. Thanks for the blog loaded with so many information. Stopping by your blog helped me to get what I was looking for. agen judi online

    ReplyDelete
  41. I recently found many useful information in your website especially this blog page. Among the lots of comments on your articles. Thanks for sharing.
    casino

    ReplyDelete
  42. I definitely enjoying every little bit of it. It is a great website and nice share. I want to thank you. Good job! You guys do a great blog, and have some great contents. Keep up the good work. 메이저사이트

    ReplyDelete
  43. Most of the time I don’t make comments on websites, but I'd like to say that this article really forced me to do so. Really nice post!
    안전놀이터

    ReplyDelete
  44. Your article has piqued a lot of positive interest. I can see why since you have done such a good job of making it interesting.
    agen sbobet

    ReplyDelete
  45. Thanks for another wonderful post. Where else could anybody get that type of info in such an ideal way of writing?
    judi bola terpercaya

    ReplyDelete