Friday, 29 February 2008

Risk free after all.......

Just a quick post to say that I’ve managed to lay off a few bets so that my exposure is zero!

I don’t intend to lay off any more bets until after round 2 (I will leave a speculative lay on Mackenzie though), so let’s hope for a charge up the leaderboard from Will Mackenzie!

I wish I found trading on horseracing this easy…….

My current bets are:

Apologies, the original returns I posted below were net of double commission!

Thursday, 28 February 2008

The first bets.....

My first attempt at trying to generate risk free bets for this week’s US Golf tournament didn’t quite go according to plan.

I initially picked out 3 players which I thought were overpriced. For £2 or £3 stakes, I backed them and asked for odds a little lower. I managed to get all 3 of my bets matched quite easily which was pleasing.

I then got a little greedy and tried the same trick with another 5 players with £3 or £5 stakes!

Not surprisingly, I struggled to get all of them matched and I’m left with an exposure of £11 going into the tournament tomorrow.

Below are the returns that I have generated for each player:

As the tournament progresses, I will look to reduce my exposure if possible. Obviously, I’m hoping that one of the 3 players with the high returns gets off to a decent start and I can lay him off quite quickly.

As I’ve said previously, I don’t expect to get rich by following this sort of strategy but this is meant to be an experiment after all, so I’m happy to look around at different strategies and give them a try for small stakes…….

Tuesday, 26 February 2008

The Expertiment has started.....

I made the decision tonight to get the ball rolling with this project as I’m fed up waiting around. I’ve also decided to look to trade and gamble on other sports as well as horseracing. Obviously, this may prove a stroke of genius or may be a desperate attempt to make this project work, only time will tell.

I’ve a little bit of knowledge of golf which was built up from playing a fantasy golf game last year. Therefore, I’ve decided to play the USPGA golf win market every week.

I have 2 distinct strategies that I will use on weekly basis:

Ø I will lay Tiger Woods every week he plays. This is simply due to the fact that I think he represents poor value every time he plays.
Ø I will look to generate as many risk free bets as possible before the tournament starts. This is quite easy to do on outsiders in the golf markets. I am looking for one of my risk free bets to win over the next 52 weeks to generate me a profit.

Lastly, thanks for all the votes in my poll. Thinking back, I should have made the poll something like “do you think I will make a profit over the 12 months?” as it’s clear that confidence in my ability to make a profit is pretty low.

Just for information purposes, the final results of the poll are:

<£10k – 27 votes (73 %)
£10k - £20k – 7 votes (19%)
£20k - £30k – 1 vote (3%)
£30k + - 2 votes (5%)

I personally voted for £10k - £20k and nothing has happened yet to change my mind. I’m hoping that I can prove a few people wrong but time will tell!

I’ll try to post up the free bets I’ve generated for the golf (if any!) before the tournament starts.

I won’t start trading on the horseracing now until Monday next week, but I’m looking forward to it already……….

Sunday, 24 February 2008

Final Practice Day - Another Disaster

Firstly, apologies for the length of this post as I’ve a feeling it could be very long but I have a fair amount to write this morning.

As you can tell from the title, yesterday didn’t quite go to plan (again!). I’ll quickly get the loss amount out of the way as it’s a fairly large loss. In total I lost £47 yesterday! I gambled on 31 races (I don’t intend to do this every Sat by the way – just playing around at the moment!), 10 wins, 20 losses and 1 break-even. For my strategy to work, I need to win in around 60% of races although I'm aiming for 70%. Clearly, a 32% win rate is very poor and has to lead to a large loss. The summary:

Over the course of my training on Betfair, I’ve lost around £140. That’s an average of £28 per day of gambling, so it doesn’t make very good reading.

So, what happened yesterday? I think to be able to fully understand the context of this loss, I need to make clear what strategy I actually employed. Clearly, if someone lost this amount from trading, they would have a problem. However, I didn’t actually lose much from trading. I lost all of it from Dutching and from bad lays when I was trying to trade.

Being honest, I got off to such a bad start yesterday, I should have quickly accepted the fact that I was going to have a losing day and then look to minimise the loss as much as possible. Instead, I did try to chase losses slightly to some extent and things didn’t improve too much.

My strategy yesterday involved me Dutching on nearly all of the races with a little bit of trading thrown in. One point I feel I need to make is what I mean by trading. When I refer to trading, I effectively mean gambling on odds movements. Trading is probably a misleading term as I’m not trading in the sense that other’s do (such as Leon). I’m basically placing back and lays into the market and hoping for 1 or 2 point swings. e.g 7 to 5, not 7 to 6.6! Clearly, this increases the risk and returns greatly.

So, I’ll quickly give an overview of how yesterday went…… (I kept detailed notes for my own post-mortem)

(I did an analysis of the 6 races below before racing as I wanted to get off to a good start!)

1.50 New – I decided to dodge The Whisperer. It was being ridden by Rose D who I’m not a huge fan of. Also, it was its first run of the year and I noticed Dobbin had another ride in the race. I Dutched 3 in the race (Alli, Hock and Uno). Loss of £6.57.

2.00 Ling – Clearly a 3 horse race as the betting knew. I didn’t want to Dutch all 3 as too short a price. I decided to take the Hills horse with the best backed horse in the race (whatever it proved to be). Always Bold was well backed so I plumped for that one. Loss of £3.50.

2.05 Kemp – Disaster in the 3rd race of the day. Pigeon Island was easily the most exposed horse in the race. It had the form in the book but surely it would come up against an improver? I laid Pigeon for £2 at 7 (subsequently backed to about 4!). I Dutched 3 in the race and none were in the first 3 in the race! I did manage to reduce the loss by placing a small back on Pigeon in running. Loss of £8.16.

2.15 Chep – A huge gamble on a horse called Krackatara. Didn’t fancy it myself, so Dutched another 3 in the race. Loss of £3.09.

2.35 Ling – Dutched 3 but none in first 3. Loss of £1.80.

2.40 Kemp – How I lost on this race I’ve no idea! I didn’t like Hobbs Hill, so looked for alternatives. Thought Lead On and Pur De Sivola were best bets. I should have just laid Hobbs Hill but no, thought I’d Dutch the other two. Pur De Sivola had Hobbs cooked at the time but fell when Hobbs fell. Left Oslot in the lead and Lead On hampered when Pur fell. Loss of £2.

So, after the first 6 races or so, I had a loss of £25.

I then had lots of small wins and losses (mostly wins tho) before disaster struck again twice in 2 races (although the Newcastle race was well after the Lingfield race)

4.15 Ling – It was 15 minutes to race time. This race only concerned 1 horse, Dansant. Looked a class apart and would probably win. I was shocked when I checked it’s odds on Betfair. Was about 2.9. This was a competitive 12 runner race and I couldn’t believe how short it was. I put a lay in the market for £10 at 2.8. I was happy enough to gamble that it would drift out as it was too short.

Checked odds just before off. Trading at about 2.2! I’d also had a look at the race in depth and decided that Dubai’s Touch was overpriced at about 9. So, put £2 on this and took my medicine on Dansant and placed a win bet at £2.2 for £10. Had a £9 liability on this and £16 profit on Dubai’s Touch. Dansant beats Dubai’s Touch by a head (was value for more). So, a £9 loss.

4.05 New - Not a huge fan of Striking Article as too short a price for what it had done. Sweet on Kalahari King and a few others. Dutched 4 in the race trying to get a £5 profit but somehow, no idea how, managed to miss Riguez Dancer. Was 3rd favourite and all I can think is that I missed it somehow…..

Riguez pips Kalhari King by Neck. Riguez was only 8/1 so it should have been one of my Dutching selections. Loss of £6.07.

At this point, I then decided to stop Dutching and just start backing horses that were value on Betfair (overpriced compared to starting price). I was looking to generate some riskfree bets for £2 stakes. I chose 2 horses in each race and after I’d backed each horse, I’d put a lay in the market. Again, my luck was out and I had 6 £2 losses in 7 races!

I’ve used this strategy a number of times on Betfair and it’s usually fairly easy to generate riskfree bets. In 3 of the races, the horse I’d backed walloped the first the 1st or 2nd fence and was never going to shorten or it started very slowly at Lingfield. The closest I got was in the 4.45 at Lingfield. I had £40 profit on Mr Lambros which was just beaten. At that stage, the £40 would have put me in profit for the day!

Lastly, the day ended with another loss. The biggest of the day! In the 5.05 Newcastle. This was purely down to some research I’d done a few years ago on Bumpers. Basically, horses who win their first bumper are always terrible bets to follow it up next time. Obviously, lots of horses do win their first 2 bumpers but over the course of the season, it will generate a loss to level stakes. I think the main reason is that the horses are always very short to follow up.

I was brought up with the saying “If you’ve missed the wedding, don’t attend the funeral”. This meant that if the horse won its last race at a decent price; don’t back it to follow up at a much lower price. This saying has definitely left its mark on me as I’m always put off horses which have won their last race. Obviously, sometimes I’m wrong but I’m sure it’s a profitable strategy over a sustained period of time.

So, we had a horse in this race which had won its last race, Touch of Irish. It was against a Howard Johnson horse bought after running in an Irish Bumper for a huge amount of money. I put £10 on the second fav and it was well backed just before the off. I didn’t watch the race but the favourite won quite easily. As an aside, I’m sure that there may be something wrong with the Howard Johnson stable at the moment as I’ve noticed a few of their short priced horses have been getting beat too easily for my liking.

Overall, another disaster of a day on Betfair for me. I’m thinking of changing the sub-title of my blog to “the story of a gambler who blew £15k on Betfair in 12 months!”

One thing that struck me today is that I seem to have developed a great knack of having a large risk exposure when I lose and only a small risk exposure when I win! Clearly, if this continues, I’ll go bankrupt quite quickly!

I’m starting to think that Saturday’s may not be my lucky day. I’m hoping that once The Experiment starts, I’ll do better during the week. Time will tell.

Lastly, I’d like to say thanks for all the comments and support. In particular, thanks to Andrew for the advice lately. I’ve been having some email correspondence with Andrew to try to develop my betting strategy and so far, it’s helped get my thinking a bit straighter although today was a large loss, so I’ve got a fair bit to learn.

I’m going to have a week off from The Experiment blog this week as I’ve got to get my continuous assessment coursework finished for my professional qualification by the end of this week. Once I get this out of the way, I’ll be able to concentrate my efforts on trying to make The Experiment work although at the moment, I’m struggling to see where I go from here………….. back to full-time work in a month?

Thursday, 21 February 2008

The Final Countdown.....

Well, I'm pleased to say that I now have a start date for The Experiment.....

The Experiment will start on Saturday 1st March 2008.

I was informed at work this afternoon that my proposal to decrease my working hours has been approved. It has been agreed that I can get 4 afternoons off every week to allow me to carry out The Experiment. I will start at 8am for my 4 short days and finish at around 12.45pm. This will allow me to get home and start trading on Betfair. This will start from the 3rd of March.

I will continue to work for one full day a week and if possible, I will try to make this a Monday although work committments will dictate what full day I have to work. I'm not a huge fan of Monday afternoon racing as it's usually quite poor quality and I would imagine that liquidity on Betfair would be quite poor.

One point that I should make is that I do intend to gamble on evening racing in the Summer where possible, so I will have sufficient opportunites to carry out The Experiment. I don't intend to gamble on Sunday's as this will be my only day off.

I already have agreement from my bank that I can borrow £15k to fund The Experiment, so I'm all set. Once I receive my £15k capital, I will deduct all of the costs for The Experiment and let everyone know how much my starting bank will be. As I've said previously, my bank will never be fully exposed but I will use all of it if I need it.

My next practice day will be on Saturday again when I'll be trying to implement what I have learnt so far from my previous practice days. Unlike my other practice days, I'll be trying harder to make a profit as I'd hate to think that I'm starting The Experiment without ever having made a daily profit from trading on Betfair!

Keep voting by the way. I'll stop the vote when The Experiment starts and I'll comment on the findings.....

Sunday, 17 February 2008

Practice Day 4 - Trading in Running

Well, I think this is the day that I finally completed my induction to Betfair as I looked at trading in running. I’ve never really spent much time on trading in running during my Betfair training as I didn’t see why it would help me out my with my betting strategy. I don’t think I could have been more wrong…….

Before I discuss what I learnt today, I better cover the subject of profit and loss. As I keep reiterating, I’m not caring at the moment how much I win or lose and simply due to this reason, I decided to keep my stakes down to an absolute minimum today. I played with £2 stakes all day. Subsequently, I didn’t need to add to my current Betfair balance of around £15. Obviously, this limited my laying opportunities but I’m not a fan of laying and then backing, so it’s not a big deal.

I played in 34 races, winning on 10, losing on 5 and breaking even on 19. I chose not to opt for a hedged profit on most of the races as the profit would have been less than 50p in most cases. Obviously, if I was trading with £500 stakes, I would be taking the hedged profits but I’m not too bothered about profit/loss at the moment, so I didn’t waste my time trying to earn a profit. Overall, I made a loss of £2.15 across the day which is not really indicative of the day’s gambling but I’m not too bothered. Apologies if this annoys some people reading this blog but be assured that I am totalling up my ‘training’ losses as I go and I will include these in my returns from The Experiment.

So what did I learn today?

Well, I definitely felt a ‘Eureka’ moment at one point this afternoon. As you know, I’m still trying to work out what betting strategy I plan to implement during The Experiment. So far, all I know is that I’m going to use a Dutching technique with a bit of trading thrown in which I hope to reduce the risk exposure of the Dutching. Well, I think I found the missing piece of the jigsaw today…….

During my first 2 practice days when I was learning to trade, I was always closing out my trades as soon as the race started. As you know, this resulted in some hefty losses and a bad first experience of trading. However, one of the things I pointed out was that there were numerous horses where I had created a liability on due to my poor trading skills. However, the horses then went on to win the race. Clearly, if I had let the liability run, I could have laid it off in running quite easily for a decent hedged profit but I didn’t know about this at the time.

When I was practicing my Dutching last week, as I said, there were numerous times when I could have laid off some of my Dutching selections quite easily before the race started. This comment obviously applies to laying off the horses in running also. There were a few times when my horses were a very short price during the race and I could have laid them off. Again, the key is to know when to do this but with more practice, this would get easier.

Today, I was trading a little bit before the races started and when my bets were not matched at the off, I chose to let them stand. I was absolutely amazed at the number of times that they were matched within 30 seconds of the off. Obviously, I could have then hedged to get a profit but I didn’t bother in most races. I just moved onto the next race.

So, I think there you have it. A betting strategy has evolved before your eyes. All I need to do is Dutch, trade before the off and trade during the race. Clearly, I need to develop trading strategies to ensure that I minimise the Dutching risk exposure and increase my profits in the best possible manner. I have the option of trading the Dutched selections to increase my profit on these selections or I can choose to Dutch the horses which I haven’t backed in order to minimise the risk. A trade-off between the two is probably the way to go but I’ll give it more thought.

Clearly, combining trading and Dutching will make the Dutching calculations much more difficult but I should be able to manage them OK. Time will tell……

Next Saturday will be the first day that I will attempt to implement my betting strategy for The Experiment. I will also increase my stakes again, so it should be more fun than today!

Lastly, I should hopefully get a date from my work this week concerning when I can reduce my hours. I have also had confirmation from my bank that my £15k betting bank has been approved, so I will get my hands on this money soon also. As soon as I have this money, I will effectively be able to start The Experiment for real. I may choose to start The Experiment even though I’m still working full-time as I can look to gamble in the evenings and at weekends until my hours are reduced. Whatever happens, I’ll keep everyone informed through the blog……

Friday, 15 February 2008

Quick Update

I’ve been off work sick for much of this week, so it gave me some more quality time to think about how this project is taking shape. Unfortunately, I was far too sick to even think of playing around on Betfair but I did get to watch a fair bit of racing and take some notes on new ideas for The Experiment.

In summary, I’m quite pleased with what I’ve learnt from my brief Betfair experiences so far, so I’m still as keen as ever to give this project a go. I still haven’t received a date from my work yet as when I will be able to start this project and I seem to increasing my workload by the day, but I’m still looking at a start date of the beginning of March sometime.

Thanks again for all the comments over the past week and the encouragement and support for what I am planning to do over the next 12 months. I think that I’m maybe coming across as having a ‘screw loose’ which was definitely not my intention when I started this blog but I’d like to answer a few of the comments and suggestions that have been posted over the past week.

Firstly, I don’t ever intend to be fully exposed to losing my £15k bank at any point of this project. I think I’m starting to worry some fellow bloggers with my intentions to start with a £15k starting bank. My current day-to-day role involves me analysing and pricing different types of insurance risks, so I’m not exactly risk-loving in my nature!

I originally wrote that I would be splitting my £15k into 3 banks of £5k and I would only be exposed to losing £5k at any one time. After taking on board various comments from fellow bloggers, I agree that I was maybe setting the bar too high to begin with. I now intend to start with 15 individual £1k banks at the start of this project. This will obviously limit my earning potential somewhat at the beginning of The Experiment, but I can adjust my bank accordingly as my experience increases. If I lose my first £1k, I will start again with my 2nd £1k and so on. Obviously, the plan would be to not lose my first £1k but this all depends on what betting strategy I'm implementing at the time and how quick I can learn about Betfair.

One of the key points that I think may have been missed by some readers of the blog is the fact that I’m not doing this project in my spare time. I am planning on giving up around a ¼ of my job for 12 months to allow me to carry out The Experiment. This obviously has severe financial consequences for me and must be factored in to the cost of this project. My girlfriend and I currently have a mortgage of circa. £140k which is a large mortgage for a 24 year old and a 26 year old, so we will definitely miss a ¼ of my salary!

I hope this may also help some people understand why I have chosen to borrow £15k and not £5k for this project. Being honest, it would be great to give up a ¼ of my work and sit in the afternoons learning to play on Betfair with £2 stakes until I’m comfortable with what I’m doing. However, I wouldn’t be able to earn enough to make it worth my while and the whole project would be pointless. Therefore, circumstances have dictated that I need to play with larger stakes and that I need to earn a decent amount for the project to be deemed successful. As I’ve said previously, if I don’t turn over a £10k profit in the 12 months, I struggle to see how this project can be judged as a success from my point of view.

One of the things that I’ve picked from the comments is that I think people wish I was gaining more experience of Betfair. Being honest, I wish I was gaining more experience but it’s very difficult for me at the moment. I’m currently working full-time which means I am out of the house from 8am-6pm Monday to Friday at the moment. I have upcoming exams for my professional qualification in April and I’m spending all my spare time in the evenings doing my continuous assessment course and studying for these exams.

It has been suggested that I could practice my trading skills on the evening racing but I honestly don’t have the time. At the moment and until The Experiment starts, my only opportunities to practice on Betfair are at the weekends (only Saturdays really as I like to spend Sundays with my gf!). Therefore, I’m more aware than anyone that I am going to be starting this project off with absolutely zero Betfair skills and zero confidence in my trading ability. However, my lack of practical experience is not getting me down.

One thing that may not be apparent (or maybe it is?) is that I have put a lot of thought into how I can make this project work for me. I’m not the sort of person to do something without doing my homework first and when I first discovered the way that Betfair works, I started to do my homework. I have been reading and sleeping Betfair manuals for around the last 6 months and have built up a very good theoretical knowledge of how Betfair works. Clearly, trying to implement what I know in practice is the very difficult part but time will tell if I can manage it.

On Saturday, I intend to dabble into the world of trading in running for my next practice day. I’ve read lots on this and would like to see how things work in practice. I’m having some issues with my internet connection at the moment and it has been proving painfully slow, so this may well put a dampener on my attempts at trading in running but I’ll no doubt learn more after Saturday.

After Saturday, I will have practiced Trading before the event, Dutching and Trading in running which completes my repertoire of things I wanted to practice before The Experiment starts, so I’ll be raring to go……….

Keep voting by the way. My confidence is at all time low........ It's becoming a little skewed towards the <£10k for my liking!

Sunday, 10 February 2008

Practice Day 3 - A Day of Dutching

After the nightmare of my first practice days trading last weekend, I made a decision earlier in the week to look to go back to my initial idea of Dutching on Betfair. I also made the decision earlier in the week to only train with very small stakes until The Experiment starts.

One further point that needs to be made is that Dutching can only truly be successful if you follow a staking plan to recoup some earlier losses as Dutching involves backing at short odds most of the time, so unless you hit a very high strike rate, you will be unlikely to make a profit from level stakes. As I’ve said previously, my training at the moment is all about learning and I’m not too concerned about trying to make a profit, so I decided to play for level stakes today (attempted to win circa £2 a race) and I chose not to follow a staking plan.

So, how did I do? Well, being honest, on the surface, the results would appear to be quite disappointing. I Dutched on 20 races, winning on 9 and losing on 11. A strike rate of 45% is abysmal. My average odds were around 2/5 across the day, so I would have been looking for a strike rate of 60%-70%. My results are below:

Even though I don’t think I should judge today on how much profit/loss I made, I expect that some people will always judge things by how much someone wins or loses. Over the course of the day, I lost £28.82. Again, this would seem to have been a bad day at the office for some but I am quite pleased with what I learned today.

So, what I have learned today? Well, today is the first time I’ve Dutched on Betfair. I found the Bet Angel Pro Dutching function very easy to use and I’m fairly comfortable that I can use this full-time for Dutching. I also found Dutching much less stressful than Trading and I feel I’m more suited to this than Trading. So, how did I only manage a strike rate of 45% and how did I manage to lose £28 if I did so well?

Well, as I mentioned above, it’s nearly impossible to win at Dutching from using level stakes. You need a staking plan and a bank size that allows you to implement your staking plan appropriately. I started today with a bank of £30, so I knew that by attempting to win £2 in every race, I was trying to win a disproportionate amount every race relative to the size of my bank. As I got off to a bad start, I reduced this to trying to win £1 a race, so that I didn’t lose my bank too quickly.

One of the key things about today though is that my average odds were only 2/5. There were 5 losing races where I had narrowed the field down to 3/4 runners and I looked to Dutch these runners. Unfortunately, due to the fact that I had a very small bank, I chose to drop 1 or 2 runners of the runners I had hoped to Dutch as it was costing too much to cover the bet. I think this may have happened 8/9 times but in 5 of the races, one of the horses I dropped out managed to go and win. You can call this bad luck but I’d like to think of it as a learning experience. If I had a bigger bank, I would have not suffered these 5 losses. So, I would have won 14 out of 20 races. (70%).

However, there was further good news. In two of the other losing races, my selections were involved in races that were clearly down to 2 runners from a fair way out. Both times, my chosen horse went on to lose the race but both times, my horses traded in running at around 1.2 for a fair amount, so I could have easily laid them off for a guaranteed profit. As I’ve said before, I was more interested in working out how Dutching worked on BA Pro and trying to understand movements in Betfair odds a bit better, so I chose not to.

Another thing to bear in mind today was that I had numerous opportunities to trade horses that I hadn’t Dutched in order to minimise my risk. In a good number of races, I had chosen to deliberately not Dutch the favourite as I thought it was too short a price. On a number of occasions, the favourite did drift out as I expected, so I could have then added that to my Dutching selections to reduce the risk of having a loser. I chose not to.

Lastly, there were many occasions today where one of my Dutched selections had shortened markedly in the Betfair market. Obviously, this would have been an easy opportunity to then lay the horse for a small amount to reduce my exposure. In 2 of the races, my horse had drifted in by around 10 points, so I could have easily laid it off to generate a risk free bet on the horse. I chose not to.

For anyone who is purely interested in generating a profit, this blog is probably driving you mad. How can I not care about losing these amounts of money? Being honest, I do mind at the moment as I don’t have that much disposable income but once The Experiment starts, I will have a betting bank of £15k. As I’ve said previously, for this project to work, I need to earn a decent amount every month. Losing £28 today (£50 last weekend) is not too big a deal in terms of The Experiment. As long as I feel that I am learning things quickly, then this may well end up being money well spent.

The next stage for me now is to put more thought into how I can combine my Dutching with my trading. Clearly, some of the things I touched on above are just the tip of the iceberg with regards to how I can use Dutching and trading together to minimise my risk exposure and increase my profits.

I will also put today’s results through my proposed staking plan that I will use for my Dutching when The Experiment starts. I lost on 6 straight races today and 8 out of 9, so I don’t think my staking plan would have helped me make much profit. Obviously, in the future, I will use trading to help minimise my exposure and reduce my losses from Dutching, but it is too early in my training to be considering doing this at this stage of my Betfair development.

Overall, I only have around 3/4 weekends left to practice on Betfair before The Experiment gets underway. Clearly, I’m learning all the time and I’m still devising my strategy for The Experiment but I still feel that 3 days experience and practice on Betfair is not enough before I get let loose with a £15k betting bank……..

I’ll hopefully post later this week once I have had more time to think about today’s learning experiences.

Friday, 8 February 2008


I’d like to say thanks for all the encouraging comments and advice I have received since I started this blog.

I don’t think I realised how useful the blog would be with regards to advice received from other bloggers and Betfair gamblers when I initially set up the blog. The purpose of the blog was purely to help me keep track of my progress but it’s proving very helpful in giving me other ideas of how I can make The Experiment work and things to try out. After all, it is meant to be an experiment……

Some of the comments have given me some food for thought and thanks in particular to Andrew for helping me believe in myself again and thanks to Leon for the comments and advice also. I was a bit shaken by how poor I was at my first trading attempts but as I’ve recently found out by reading other blogs, this is fairly normal when people begin trading. I stupidly thought that because I know a fair amount about odds compiling and horseracing, trading would be a ‘piece of cake’. I now know that it will take a fair bit of time for me to learn how to trade properly but I’m looking forward to learning.

As I’ve stated before, this project has not really got underway yet, so I’m amazed at the number of hits and comments I’ve received. I still can’t confirm an exact date of when The Experiment will start as I’m still waiting on a date from my work of when I’ll be able to reduce my hours as well as waiting to receive my working capital from my bank. I’m still working towards a date at the start of March though, so not too far away.

I’ve been slowly building up the things I need to enable me carry out The Experiment. I now have a laptop which I plan to use in conjunction with my PC. I have also purchased screen recorder software to enable me to record all of my trading so that I can learn from my mistakes and hopefully speed up my learning. I have already purchased Bet Angel Pro as this is the software I will use to trade with, so I’m pretty well raring to go. Bring it on!!!

One thing I’m a little disappointed with is my lack of practice on Betfair up to now. Unfortunately, I’m at work all day just now and I’m studying for my professional qualification at nights, so I’m not getting the practice I need. Obviously, once this project starts for real in March, I’ll get plenty of practice every day but it would have been good to get more practice beforehand.

My next practice day (day 3) will be on Saturday, so I’ll update everyone with how I get on at the weekend.

I’m happy to discuss my trading and strategy through email if anyone wants to discuss this. My email address is shown at the top of the blog. Obviously, until this project starts, I can’t say too much as it is really all theory at the moment, but I’ll have plenty to say once this project is underway………

P.S. If you are reading this blog, please vote in my poll at the side. I’m interested to know how much people think I will earn…….. (So I can prove them wrong – only joking!)

Tuesday, 5 February 2008

New Trading Strategy

Last Saturday’s diabolical first attempt at trading on Betfair has obviously led me to rethink my plan of how I will make The Experiment work for me.

When I initially came up with this crazy idea, I planned to gamble on Betfair using my unique staking plan and by backing multiple horses in every race (Dutching). After learning more about Betfair and in particular trading, I then decided that I would like to learn how to trade on Betfair to enable me to earn enough from doing this instead of gambling. I still intended to use Dutching but only to supplement my income from trading.

Clearly, last Saturday showed that no matter how much you read about trading and watch tutorials or trading examples, trying to do it in real-time is more difficult than I thought it would be. Therefore, I am not going to be able to make enough from purely trading on Betfair over the next 12 months.

Therefore, I plan to go back to my original idea of using Dutching to earn money on Betfair. However, I will continue to trade on most races with very small stakes and then slowly build up my stakes as my knowledge increases. Ultimately, I will use trading to hopefully reduce my exposure and risk of Dutching.

So, what is Dutching?

As stated in an earlier post, Dutching is when you calculate an amount to back on a number of selections that will return a specified amount no matter which selection wins.

The main advantage of Dutching is that it allows you generate a very high strike rate. Past experience has shown that I can achieve a strike rate of around 70% from using Dutching.

Obviously, backing a number of selections in every race will mean that you are backing at very low odds. In most cases, you are backing at odds on, sometimes heavily odds on.

Some people try to say that laying horses to lose on Betfair is the same as Dutching a number of selections to win but I see these 2 things as vastly different. Dutching is better for me simply due to the fact that I choose the horses which I want to run for me.

One problem I have with laying horses to lose is that you end up getting other horses running for you which you think can’t beat the horse you are trying to lay. Hence, you miss out to some extent. Obviously, people will say you can lay the other horse also, but lots of times I don’t want to lay the other horse as it may win and cost me a fortune.

An example maybe illustrates this best. A four horse race may be taking place and the horses odds are as follows:

Horse 1 – 2 (Evs)
Horse 2 – 3.5 (5/2)
Horse 3 – 7 (6/1)
Horse 4 – 15 (14/1)

Say that I think that this race is between horses 1 and 3. I don’t like 2 and I think 4 should be a higher price.

So, I want to Dutch horses 1 and 3 for a profit of £10. I can quickly see that I need to place a bet of £15.18 on horse 1 and £4.42 on horse 3. Assuming a commission of 5%, if either of these horses wins, I would get a return of £29.59. Hence, I would get a profit of £10.

I did have the option of laying horse 2 and 4. However, I think 4 may pop up to win but I wouldn’t back it at that price.

So, I could lay 2. To win £10, I would lay 2 to lose £25 (ignoring commission). The issue with this is that I have horse 4 running for me at 14/1. I don’t want that horse running for me though, so by laying horse 2, I effectively get the other 3 running for me.

Another reason for me using Dutching is that I find it easier to work out how much to bet on horses rather than lay on horses. In addition, Bet Angel Pro has a Dutching function which I can use (although a minimum stake of £2 per horse still applies, so I can’t use this function until I increase my stakes later on during The Experiment.)

Another thing I like about Dutching is that you can use trading to offset the risk of Dutching. Once I have decided which horses I want to Dutch, I can then hopefully use my trading skills to generate risk free bets on the other horses which I would like to back but haven’t been able to. This will reduce my risk (as long as I can trade to generate a profit).

At first, I am going to begin Dutching trying to win £2 every race. I will also begin trading using £2 stakes. As I get more comfortable with Dutching and Trading, I will increase my stakes accordingly. One point that I should make is that Dutching usually means that I cover the favourite in most races as well as other runners I think have a decent chance. Therefore, my trading will be on horses which are higher prices, so my £2 stakes are not as low as they sound as I can still generate decent risk free bets even using £2 stakes.

My plan is therefore to bet on every single race. Even when I am unable to trade on races, I will be able to Dutch. Clearly, once I know how trade to effectively, I can then use this to reduce the risk of Dutching.

As stated previously, I will be using my own unique staking plan. I don’t want to go into any great depth at the moment about this plan as I have developed this plan over time and I haven’t shared this with anyone, but I have carried out extensive testing compared to other staking plans and it seems to work just as well. Like any decent staking plan, if you a very large number of consecutive losers, you will lose your bank. However, this risk should be reduced somewhat due to my knowledge of horseracing and my ability to read form and select winners on a consistent basis.

Reply to First Comment

Thanks to the anonymous person who has left me my first comment. At least it shows that someone is reading the blog apart from me……

In reply to your questions, I think I can win around £10k-£20k in the 12 months of The Experiment. Obviously, my first target has to be to win around £9,000 to break even. I think I would be fairly happy to win the £9k as it would at least mean that it hasn’t been a complete waste of my time…...

However, for me to judge this project as a success, I need to earn £10k-£20k if I’m being honest.

One point that I would like to make is that I don’t expect to earn the £9k to break even uniformly across the 12 months. At the start of this project, my earnings are going to be very limited as I will be using small stakes until I gain enough experience.

A graph of my profits over the 12 months may look something like this:

Clearly, my profit across the 12 months will be slightly exponential which fits in with the fact that I will be increasing my stakes as the project progresses as well as gaining more knowledge.

The Experiment will officially start at the beginning of March sometime. I am still in discussions with my work about agreeing a date but as soon as I have a date confirmed, I will post it on here.

The name of the project has originated from something my girlfriend said about it. I said I was calling this project “The Experiment” and she said it was more like “self-indulgent bullshit”. Hence, the project name was born.

If anyone has any more comments, please get in touch and I’ll try to answer your queries.

Monday, 4 February 2008

Day 2 of Training to be a Betfair Trader

I didn’t really have any time to practice trading today as I was busy with other things. I did get 30 minutes free though, so I thought I would see if I learned anything from yesterday.

Basically, I studied the form for the 3.00 at Musselburgh. Jack The Blaster came out clear best according to my analysis and the only possible danger was a horse that had been off the track for over a year and would probably need the run.

So, I had priced JTB at 4/5 or 4/6 in my mind. When I checked Betfair, he was trading at evens. I watched for a few minutes and it went odds on. I had around £13 in my account, so I was going to be trading with £10. I put £10 on at 1.99.

Well, guess what happened again? Yip, it went on a massive drift. I did think of closing out at 2.1 for a small loss, but I decided to trust my judgement. Surely this would start at odds on?

Nope, it drifted all the way out to 2.75 before coming in a little bit. By this time, I had already decided to just let the horse run with my £10 on it. As usual, I called the race perfectly.

JTB won easily with the 2nd place horse being the horse that hadn’t run for over a year. Incidentally, the 2nd horse was backed from around 11/1 to 4/1.

So, I actually won £9.50 on the race but again, my trading skills were non existent.

I did try to trade the next race but again I got caught out when the market turned against me and so I decided to close out for a 6p profit!

In summary, I won £9.56 today.

However, my trading was abysmal again and I need to seriously reconsider how I plan to make The Experiment work.

I don’t intend to trade again until next weekend as I’m obviously working all week but I do plan on posting something up later in the week concerning my betting strategy for this project.

I’m still working through the numbers to work out how I plan to make a go of this and I’ll hopefully be able to write something up later in the week.

Saturday, 2 February 2008

Day 1 of Training to be a Betfair Trader

I must be crazy………..

Well, today was the day that I finally got to test out my trading skills on Betfair. I had been building up to this for a number of weeks as I had been slowly honing my skills with very small stakes trading and hypothetical trading. I had watched every tutorial and read every article I could find regarding trading, so today was my first opportunity to see what I had learnt.

I’d love to say that I took to it like a duck to water but unfortunately, I got off to a complete nightmare of a start and then it went downhill from there!

I had managed to accumulate £60 in my Betfair account over the last few weeks from trading very small stakes on horseracing. So, I started today with £60 in my account. Remember, the main point about trading is that it is meant to be pretty much risk free as long as you know what you are doing. Clearly, I’ve still got a lot to learn.

I somehow managed to lose the £60 within the first hour. I was shell-shocked…….

I mean, £60 in 1 hour…… I have had a Betfair account for over 12 months and I have only lost £120 in total. This included a £50 boxing loss (Hatton!) and a £50 loss on X Factor (Futureproof).

So, what the hell happened you are probably asking? Being honest, I bottled it! I have been trading with £2 stakes for the last few weeks and had never suffered a single trading loss on any race. I changed my stakes to £60 today and I couldn’t cope. I just seemed to pick the wrong horse to trade in every race.

In total, I traded 13 races over a 4 hour spell. This included a break when I had lost my initial £60. I won on 6 races (only 1 win greater than £1!) and lost on 7 races.

Below is a summary of my results today:

So, where did it all go wrong? Let’s analyse my performance 1 race at a time and I’ll try to pinpoint where it went wrong.

12.50 Doncaster – I spent 10 minutes studying this race before the off as I wanted to get off to a good start so badly. From my analysis, the Paul Nicholl’s newcomer only had to jump around to win. Kalhari King looked a dodgy favourite and would struggle to beat the Nicholl’s horse. After all, the Rippling Ring was entered in 2 races at Cheltenham before it had even seen the racecourse, so surely it was a certainty.

I checked the odds on Betfair and the latest odds from Bookmakers. King was 6/5 and Ring was 15/8. So, I made the decision (mistake 1) to trade Rippling Ring. I also made the decision that the horse was overpriced and must go off favourite (mistake 2). So, what happened??????

I must have been the only person in Britain who thought RR would win. The horse drifted out from 15/8 to 7/2 in the betting ring. On Betfair, the horse reached around 5/1…….

I had found the nightmare horse to trade. Due to my small starting bank, I had to back the horse and then lay it off. I was using stakes of £60. The more I backed, the more it drifted. Since I thought the horse would win, I just kept telling myself that it would come down in price. I couldn’t have been more wrong.

Within the first 10 minutes, I had created a £60 liability on RR. So I now had a big decision to make, do I close out the bet for a £10.21 loss or let the horse run? Obviously, if the horse wins, I win in the region of £200. If it loses, I lose my £60.

Now, if this was part of The Experiment, I would have undoubtedly let the horse run. After all, a £60 loss may sound a disaster but the horse was vastly overpriced. Since the point of today was to help me train my trading skills, I had no option but to close out the position for a £10 loss. OUCH!

Guess what happened? Yip, Rippling Ring bolts up with Kalhari King well beaten. I had called the race absolutely perfectly and managed to lose £10 in the process. My knowledge of odds and form has led me to lose.

And being honest, that’s how I managed to lost the rest of my £60 in the first hour.

Races 2 & 3 were ok and I managed to make very small profits (better than nothing).

Disaster again struck in race 4. Tidal Bay opened up at 1/3 and Leslingtaylor opened at around 3/1. I couldn’t believe how short Tidal Bay was as he hasn’t beaten anything over fences yet, so I decided that Tidal Bay would drift and Leslingtaylor would be backed. Again, I couldn’t have been more wrong. I started to lay Tidal Bay (able to lay first since it was odds on!). The more I lay, the more it got backed.

It actually got backed from 1/3 to1/4. For any horse to move this much, it takes a mountain of money, especially on a Saturday afternoon. So, after a nightmare 5 minutes, I was again faced with a tricky decision. Do I close out for a £12 loss or hope that Tidal Bay loses and win around £80? I didn’t fancy opposing a 1/4 chance, so I closed out.

Guess what happened? Yip, Tidal Bay gets pipped on the line by Leslingtaylor. Now, I’m not saying that I thought Tidal Bay would lose, but I thought it was a crazy price. Therefore, I should have been happy to lay the horse to lose. However, the main point about today was that I wanted to practice my trading skills, so I didn’t care too much about how much I won or lost.

Race 5 produced a tiny profit and then in the space of 10 minutes, I somehow managed to lose nearly £40.

Race 6 was basically a 2 horse race involving Straw Bear and Afsoun. I personally had strong views that Straw Bear would win and decided that I would trade this by backing it and since it was effectively a 2 horse race, I would lay Afsoun at the same time.

Well, guess what….Wrong again. Afsoun was the better backed and I was left with a bit of a liability on Straw Bear. However, instead of closing out for a small loss, I decided that I would hope that Straw Bear won. It just got beat from Afsoun. That was another £10 gone.

So, it takes us on to Race 7. This really was the race that broke the camel’s back……. I was very sweet on the chances of Celestial Halo. He opened up at about 4/7 and got backed all the way down to 2/5. I had generated a little risk free bet of a few pounds, so I was looking good for a profit.

In the last few minutes before the race, he seemed to be on the drift, so I decided that I would try to trade for a little quick profit. I had read the market wrong and had managed to lose my risk free bet in about 30 seconds. So, after 10 minutes of trading I had nothing to show for it.

Out of pure stupidity, I decided to risk my £30 on Celestial Halo to win. I think I was probably a bit annoyed with myself that I had cocked up 3 of the previous 6 races in a big way, but as luck would have it, Halo was beaten into 2nd place. So, my £60 was gone. Probably the quickest £60 I have ever spent……

After this, I had a break to compose my thoughts and take a few notes about what I had just experienced. That’s why I’m able to write such a detailed report tonight.

I really was downbeat. I couldn’t believe what had happened. I had broken nearly every one of my commandments that I said I had to stick to. I was so disappointed with myself, I felt sick. I had been waiting for this moment to start trading for weeks and yet, when it has arrived, I have blown it. Really blown it.

However, I quickly got things into perspective. I had lost £60. It’s not the end of the world. But more importantly, I had learned more about myself and trading in that hour than I had learnt from my previous trading experiences. I went and had a read of my 12 commandments I had made up:

Knowledge – I had not used my knowledge wisely. I had let it interfere with my trading far too much. Just because I think a horse is overpriced, this doesn’t mean that other’s do.

Discipline – I lost my discipline after the Straw Bear race. Gambling £30 on a 2/5 shot was crazy. BIG MISTAKE!

Research – I again let this affect my trading strategy. One lesson (of many) I learned today is that people follow money. Traders don’t try to work out which horse will win; they just follow the way the odds move. I need to use my research and knowledge to exploit this in some way.

Value – Far too many times I got caught out trying to trade horses which were overpriced. I disregarded the money going on each horse. BIG MISTAKE!
Time – I need to plan which races to trade in advance. I was trying to trade every race. Another mistake from me.

Low Risk Trades – Probably broke this rule more than any other. I seemed to get caught out every single time I traded and ended up chasing the market. BIG MISTAKE.

Cut losses short – Ignore my last comment, this was the biggest mistake I made. This was a really BIG MISTAKE. On the first race alone, the market moved about 3 whole points against me. This was for £60 stakes. Nearly every trade I placed in the first hour moved against me. I tried to chase every one. I’ll put this down to my inexperience!

Build Profit’s Gradually – I was never anywhere near making a profit today, but gambling £30 wasn’t the brightest thing I did.

Learn from mistakes – Well, I made so many mistakes today that I’m sure I’ll make many more but I’ll hopefully learn from them. Put it this way, if I don’t learn from today, my £15k isn’t going to last too long!

Keep detailed records – probably about the only good thing I did today. Means I’ve got too much too write on this blog though!

Be Patient – Probably the one thing I’ll take away from today most. I’ve a long way to go before I can consider myself a good trader. I’ve a feeling that I have many other hard days ahead before I’ll be any good at this game.

Luck – Luck plays no part. I don’t think I was unlucky once today. Yeah, maybe I should have had more conviction in my beliefs that some horses would win and lose but today was purely about trading (apart from the wild £30 bet!).

After I’d lost my £60 quid and written a few notes, I deposited a further £10 into my account and played around with £2 stakes like I have been doing for the last few months for practice. I traded in 6 races, winning 3 and losing 3, purely from £2 trades. I managed to make a profit of £3.30. That’s a return of 33% on my investment, which was pretty good.

So, that’s my first day of training for Betfair Trading. My mind is a bit of a mess tonight as I’m obviously starting to have second thoughts about this whole project and whether I should call it off or not.

I’ve already started to rethink my strategy for making The Experiment succeed and once I’ve finalised these plans, I’ll share them on here. The one thing I’ve learned from today is that I’m not going to be able to use Dutching (or gambling) to supplement my Trading income on a regular basis. I need to start to look at ways to supplement my Dutching income through trading!

Friday, 1 February 2008

Enhanced Trading Strategy

I’ve been putting some more thought in to the Trading strategy that I am going to adopt on Betfair. I thought I’d share these thoughts on here……

When I’ve been learning about trading, I’ve never quite understood why traders concentrate on favourites as much as what they do. I find it quite difficult to always know which way the favourite’s price will move, so in some circumstances, I would disregard the favourite and trade on other horses at a higher price.

I have noticed that the outsiders on Betfair usually tend to be over-priced when compared to traditional bookmaker’s prices and I always thought that this was an easy way to generate risk-free bets. What I hadn’t completely grasped is the small amount of hedged profit that these outsiders would generate.

Apologies if it sounds like I’ve missed the most obvious thing of all time here but I really did not make the connection between the odds of a selection and the ability to hedge for a guaranteed profit.

Below is a table I have quickly generated which shows things quite clearly:

Consequently, I have decided to change my intended trading strategy slightly. I now intend to trade on the favourites to try to generate a hedged profit pre-race. However, at the same time, assuming that time allows, I intend to try to generate risk-free bets on the higher priced runners.

Incidentally, I will try to link my Dutching technique into the attempt to generate risk-free bets so that I can minimise the risk of Dutching to a great extent. So, I will try to generate risk-free bets on horses that I have not Dutched in any particular race

As we get closer to the Go-Live date of this project in March, I aim to provide an example of my trading and Dutching technique to talk through how I intend to make this project generate the return I am looking for.