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.


leonthefixer said...

Hi Mate, sorry to see you didn't turn a profit today. I wouldn't get to carried away with just disregarding these small losses. You have already lost over 0.5% of your £15k!!! Obviously nothing to disasterous but remember it can build up quickly - I would be including these figures in your P/L as you are going to need to win them back at some point.

I wouldn't give up on your trading so quickly by the way! You obviously had the rude awakening that comes to us all who trade last week in that it isn't as easy as you may think. However, practice, spend the time watching the markets and try and figure out what is happening, when, why and how and the effect this has on the market. You are going to be very lucky to find out a stratergy for trading that works straight away. I have had a shocking week myself and am questioning myself all the time at the moment - so I also think confidence is a big thing! I felt a lot better about my trading and excited by it after getting a bit of a win under my belt today.

You mentioned that you could trade out of positions in running at much shorter odds. This could be a good stratergy but also you need to treat it with caution when devising a system/stratergy. To say you could have done this that or the other is a long way off from doing it! At what stage do you decide to trade out at? What effect is the reduced profit going to have on your long term profits. Bear this in mind. You may find yourself think I will lay this off, but I will just wait a touch longer until it gets a little shorter and it never does etc etc.

Glad to see that you are still looking forward to the challenge! I will continue to read with interest. Have you considered looking at the evening meets in the week? They are normally, Wednesday, Thursday, Friday and Saturday. These meetings represent a lot of the racing over the year so shouldn't be disregarded.

Best of luck again!

Mark Iverson said...

Hi Graeme,

I've now had chance to read all of your blog and it's a great read.

But....I can't make out if you're a genius or a lunatic either! :-)

On a serious note though, I admire your guts. You have to be totally committed to get anywhere with what you're trying to do and it appears you have this in abundance.

However - a few words of caution. From the sound of it, my background is similar to yours, and before turning my arm to trading the likes of cricket and rugby I was a huge horse racing fan. I knew quite a bit (or so I thought)and I was convinced I could make my knowledge pay. I created system after system, from dosage to dutching, but my returns at the end of the year were always meagre.

The message?

What you're trying to do is very difficult (but not impossible)and if it was me I would start with a much smaller bankroll. If you can make £100 into £1000 then you'll know you're onto something and maybe then it'd be time to up the stakes.

I wish you the best of luck and I'll follow your progress with interest.

All the best,


The Betfair Loser said...

my 2p worth...

Have you considered diversify away from the horses? From reading Blogs and Forums, I get the feeling that a lot of the successful traders usually work the tennis and cricket markets...much easier to get in the groove with, as there are only two runners as it were.

Why don't you set aside say £100 over the next few weeks to experiment with these markets and see if thats a viable alternative??

I know there is money to be made in the horses, but you owe it to yourself to explore other options as well.

I agree with Mark about your bankroll, start small until you gain confidence...jumping in with £15k and little experience is madness!

Look at what you are trying to achieve....If your realistic goal is say £20k profit this year, thats a little over £50 per day...I probably average close to that using a bankroll of £1k, and I'm rarely exposed over £200 at any time. There is no reason at all you can't make money without having a massive bankroll!!

Don't get to disheartened by losses...consider it your education fees!! Everybody starts off taking losses as they experiment with systems and ideas, all part of the learning curve I'm afraid.

I'll enjoy reading your progress in your blog, but for gods sake, remember slow and steady wins the race!!

Good Luck!!

leonthefixer said...

The evening racing starts tonight mate - may provide further opportunities for you to study the market. Some good words about the bankroll from mark and the BF loser. I started just using £2 trades and built it up very gradually and am still doing so. I have only deposited £165 into my account and have just built it up steadily increasing the stakes as my bank grew and my results improved. Once I hit the £1k I started withdrawing at the end of each day assuming a win, I have not re-deposited at all. I plan to start building up my balance to the £2k mark but I still have to get to the £1k trading stakes - I am still using £800 despite having the intial plan of using £1k by xmas. Although, I am not using my full bankroll yet I have been achieving my profits I set out to be making with the higher bank roll. £15k is a lot of money and you should be able to make £50 a day with much less depending on your style. Anyway all the best again and take a look at the evening racing!

Rebelred said...

Hi Graeme,

Stumbled upon your blog by chance and have enjoyed the read a lot. Have added your blog to my links ( and will be very interested in how you do once you start in earnest.

Sadly as a degenerate action junkie, I could never have the time, patience or disclipline to trade successfully, but I hope you won't mind me adding my views.

I was quite shocked with one of your first posts stating that you need circa £10k profit just to break even. I think it's only 5% of Betfair users who generate profits on a consistent basis and I'd be concerned about the amount of pressure you're putting on yourself from the off.

I know target setting is important but that high so soon? My own pitiful target is a return based on a bank account that pays double the rate of BOE offical mark. On a £1,000 investment, it works out to a pittance (relatively speaking), and defeats are not earth shattering.

From looking at results you seem to be taking constantly low profits, but letting your losses run too long. Try and aim to swap it around so you cut your losses off early, letting your winning trades go a bit longer. I appreciate I don't actually trade but reading the Betfair Traders blog, this was something he always advocated.

I'll also just reiterate what Leon says about "training losses". Money is money, and it all has to be won back. Although, like you I feel sick at any loss, so I can appreciate your not just chucking the stuff away.

Finally, I'd just recommend the book "A Bloody Good Winner" by Dave Nevison. He, like yourself, grew up with the gee gees, and his knowledge was second to none. However the one year he took to the exchanges instead of the race courses, he took a real kicking, and eventually went back to what he did best. I guess it goes to say that Betfair isn't for everyone, and perhaps you could play like a regular punter with a slice of your £15k taking advantage of the better SP's on Betfair.

Geniunely, all the best, I look forward to you racing past that £10 break even mark!!