Wednesday 28 January 2009

Another nightmare!

Profit since last update £533.89

One of the most interesting things for me this year has been the debate about trading v gambling. I’ve discussed it before many times and there are various posts about it on the blog at different times.

To reiterate what I’ve said previously, in my opinion, everyone needs to find a style of gambling that suits their risk aversion. I’m very risk averse and I don’t like losing, so I tend to leave IR lays on 90% of my bets to ensure I make a profit or at the very least, get my stake back. I know not everyone is like me though and lots of punters would see this as money lost when a horse wins the race after they have laid part of their profit off.

Another interesting topic is the win only v each-way betting methods. As I’ve said before, I only really bet win only apart from odd occasions when I feel the each-way part of the bet gives me great value. For example, if I happen to fancy a 5/1 in an 8 runner race, I will bet each-way since I think Evs is a decent price for the horse to be placed in most cases. I will still lay off low IR on the win part of the bet as I see a place bet and win bet as two separate bets.

One topic I’ve only covered a little this year is staking. I have never bet to a staking plan in my punting life and I never will do. A lot of my staking is around how I perceive value and it’s a very subjective approach from me. I could bet on two 16/1 chances and yet, I’d be happy to gamble 10 times more IR on one than the other one. It’s the way I play and it’s something I don’t intend to change.

Lastly, as you all know, I add a different dimension to my punting by using Betfair to trade pre-race and IR. If possible, I will bet more on a horse than I want to take IR with the sole intention of laying off pre-race to get a riskfree bet or take a small sum in running if I think I’ll be able to make money IR or I may leave it as a simple bet. Again, this is all very subjective and varies according to each individual horse or race.

Why does any of the above matter?

This month, I’ve had an absolute nightmare with the tips. I can’t get across how bad the month has been and it has been a shocker. Obviously, I tend to go on losing runs now and again and I bounce back and no doubt, I’ll bounce back from this run but it has been a poor month for me and all the subscribers.

When I tell you that I’ve only had 3 winners and 18 placed horses this month, it’s easy to see how thin a line there is between success and failure!

For example, 11/1,10/1,11/1,25/1,14/1,14/1,14/1,16/1 and 10/1 selections have been placed. Obviously, I don’t back each-way for all my selections and even backing each-way, it still looks like a horrendously bad month for the tips with only 3 winners.

One reason for not posting up an update on the month has been the fact that I was waiting on it turning around and it hasn’t turned around! I know people like to read how I’m doing and I still put a lot of example analyses on the site for people to browse if they want to learn anything. The main reason for not posting though is that it feels unfair to be posting a profit when subscribers are suffering a loss and a healthy loss at that.

I’ll post up my BF P&L at the month end but since the last post, I’ve made just over £530 profit on Betfair. I’ve only really traded a couple of Saturdays on my own selections and backed a few on Betfair Mobile whilst being at work but it’s been a good run for me.

The point of my introduction is that there are a lot of different ways to skin a cat on Betfair. I’ve discussed it at length in the past and it is true. I’ll talk through an example of how a few people played a horse I tipped on Saturday. The horse was Too Forward.

To my knowledge, 4 people played this horse 4 different ways. I’m sure a few did something a bit different but I know 4 ways people played it.

I gave out the selection in the forum on the Friday night as I let everyone know how keen on it but not everyone uses the forum, so it effectively became an official selection on Saturday morning.

I suggested 1.5 points each-way at 16/1. It was available at 17.5 and 17 on Betfair on Friday night for just under £1,000 in liquidity. In the morning, it was 16.5 and you could have got around £2,000 on it if you were patient, so there were no liquidity issues even for big players.

Here’s 4 different ways people played it including myself:

Example 1 – My method (trade and aim for a risk free bet)

As you know, I like to back a horse like this with a larger stake and then look to lay off pre-race for a riskfree bet and then make some money IR.

My first bet was £50 at 17.5 on Friday night. I then topped up to have £200 at 17.5 when I went to my bed. In the morning, I had another £200 on it at 17 and I effectively had £400 win at 17.25.

Clearly, I don’t use any staking plan and considering how sweet I was on this, I was happy to risk £50 IR on it which is about my maximum bet.

Throughout the day, the horse shortened and it’s SP was 10/1 at the off. I laid off my £400 at 13.5 on average and I had £1,500 riskfree on the horse to win.

I decided I’d take £100 out at 4, £400 out at 1.9, £200 out at 1.1 and let the rest run.

Roughly, I got £100 return guaranteed if it hit 4, £500 return if it hit 1.9, £700 return if it hit 1.1 and £820 if the horse had won the race.

As it turned out, the horse hit 2.1 IR and finished 3rd. I won £100 but was very close to winning £500!

So, I won £100 for zero risk.

Example 2 – Following my Staking Plan (Bet 1.5 points each-way)

If we assume £50 a point, then someone had £75 EW at 16/1 which was a total stake of £150.

If the horse got placed, they made a profit of £225. If the horse won, they make £1,500 profit.

Hence, for a risk of £150, they won £225.

Example 3 – Win Only (Bet on it to win according to a predetermined staking plan)

One of the subscribers uses a win only staking plan according to the odds of the selections. Hence, they had £40 win at 16/1.

If the horse had won, they’d make a profit of £640.

Hence, they lost £40.

Example 4 – Follow my Staking Plan and lay off low to recoup stake

Someone had £75 EW at 16/1 and left a lay at 3 IR to recoup £150 if it hit 3.

If the horse run well and traded at 3, they would break even. If the horse won, they’d win £1,200.

Hence, they broke even for a risk of £150.

I think the above show that there are many different ways to win and lose money at this game.

I won £100 for zero risk at the off.
Someone won £225 for £150 risk at the off.
Someone lost £40 after risking £40 at the off.
Someone broke even after risking £150 at the off.

From what I can make out, the only difference between my method of gambling and other methods is that I effectively bet on two different things.

Firstly, I bet a lot on my belief that the horse is the wrong price. If we assume I use £10 a point, I was willing to bet 40 points on the fact that 16/1 was the wrong price of the horse. However, I bet zero on the fact the horse would win the race. If I wanted to, I could have took some money IR but at 10/1 at the off, I thought the horse was rightly priced. The value was nearly gone.

However, unlike most traders, I didn’t green up as I thought that IR, the horse would trade lower than 10/1. Clearly, you can’t risk 40 points IR and in this case, I didn’t risk anything. In many races though, I do risk a little IR to make additional profit if it runs well but I’ll lose if it runs poorly.

So, the second part of my bet is whether I think it will run well and trade lower. In most races, I’ll take a point or two IR but if I have a decent riskfree bet, I won’t take any money IR and will happily settle for my riskfree bet.

OK, here’s the crux of the matter………

In the long-run (and I mean long-run!), examples 2,3 and 4 will show nearly identical profits in my opinion. Whether you bet win only, follow a staking plan or follow a staking plan and lay low, it makes no difference. All you are doing is smoothing your P&L or creating extra variance in it by backing win only.

My method will show a higher profit (in proportional terms) though due to one reason. I am gambling twice! I effectively bet on the horse shortening in odds and then on the horse running well.

The above is a great example of when it goes right for me. However, people need to realise that it doesn’t always go to plan and sometimes, I’m forced to take money IR on a horse when it has drifted. Hence, I may have £20 win on a horse trading at 25 and the odds I have got are only 5/1! Hence, unless my horse runs really well or wins, I’m not going to avoid a loss but that happens now and again (not often this month but frequently in the past!).

The whole tipping service is built on my belief that I can find horses over-priced that will run better than the market odds suggest. As I’ve stated a million times, I don’t go looking for winners as backing lots of winners doesn’t mean you’ll make a profit. It only means it will take you longer to lose but ultimately, you will lose if you don’t back horses that represent value.

As I said in the intro, people need to find a style of gambling that suits their risk aversion and ultimately, their skill. My skill is identifying horses overpriced that run well. That’s why I make money at the game I play. It’s also why I’ll bounce back from this current run with the tips and make the guys money across at the site!

Monday 12 January 2009

Annual Review of The Form Analyst (1st Oct-08 to 11th Jan-09)

This is a review I shared with the subscribers of The Form Analyst yesterday and I thought a few blog readers might enjoy the read. I've also updated my P&L for Jan-09 but it hasn't been the best of starts for me this year!

Annual Review of The Form Analyst (1st Oct-08 to 11th Jan-09)

I felt it only right to make this review run right up to the 11th of January simply due to the fact that we haven’t had the best of starts to this year and it’s important that I try to show the true picture of how the service has performed thus far.

All of my figures below are as accurate as they can be although there will always be small discrepancies between my results and anyone proofing my results. However, all of my results are proofed across at racingproofing.com and my results are in line with the results there. All of my selections and finishing positions are also kept on the site and are easily verified by looking at Racing Index.com or Racing Proofing.com.

Around half of my current subscribers have been here since day one of the service and I’ve picked up new subscribers along the way. I’ve also lost subscribers along the way but to my knowledge, no one has left the service after losing money following my selections. If anyone does get to this position at renewal, (a few of you are sitting with a small loss at the moment), I’m happy to discuss a way around this to ensure that people stay with the service whilst getting the opportunity to win back their previous losses. This assumes people have followed all of my selections and staking advice.

The starting point for the review should probably be our P&L graph since inception:



Everyone can see it hasn’t exactly been a smooth P&L curve and depending on when you joined, you could be anything from -12 to +72 at the moment. The majority of subscribers are in profit but I have had a couple of people join at the end of last year and these people are sitting with a small loss at the moment.

I have split the graph into 12 constituent parts and these are described along the bottom of the graph.

The highlight for us would be the 80 points profit we made in at the start of November and that was easily the best time for the service. We have had two very poor runs where we have lost 45 Pts and 29 Pts respectively. I said at the start that everyone should hold at least a 60 point betting bank and for safety, you ideally want to be playing with a 100 point betting bank. Thankfully, no one has lost their full bank if they followed this advice although they may have lost 75% of their bank at one stage which wasn’t ideal.

Apart from these highlights, our profit has been very up and down. My winners and losers tend to come in batches which isn’t ideal as people lose confidence during the poor runs and then go overboard during the good runs. I have continually tweaked my staking as we have moved through the service and by using each-way betting, we have managed to reduce the variance in our P&L I think.

A summary of my results by month is:



Strike rate throughout this report is defined as any bet where we have made a profit. Hence, it is winning bets and not winning selections.

This summary mirrors the graph somewhat but it also disguises the fact that we haven’t been having the best of times during the past 4 weeks. Over this period, we are making a loss but it is hidden by the fact that we had a great start to December. Overall, you can see that we have a strike rate of 24% and a ROI (Yield) of 20.9%.

Interestingly, we have actually had a decent strike rate in January but it is from each-way bets producing small profits which isn’t ideal. A ROI of 20.9% is highly respectable and isn’t far off the best tipsters in the business. In time, I hope to increase this a little though.

One of the things I think is very interesting is my ability to be able to recognise my better bets from my weaker bets. I use a staking plan of 1-5 although we have never had a 4/5 point bet and we have only had ten 3 PT bets thus far, so my staking tends to be very prudent.

Here is the breakdown of our P&L according to the staking plan:



One of the criticisms I have had during my time tipping is that I’m maybe not selective enough when it comes to selections. I have always said that if people don’t want to follow all my selections, then I would suggest they only follow my stronger bets since these are the ones which I obviously think will run better. Anyone who has only followed my stronger bets would be 76.9 Pts in profit and they would have a far smoother P&L than anyone following all the bets.

It may sound easy for people to think that I should stop giving any of my weaker bets and one day, this may well be the aim for this service. However, considering I have only been tipping for just over 4 months if you include my free trial month, I feel like I need the weaker bets to be able to identify the stronger bets. If I only looked for stronger bets, I would struggle to decide how strong a bet it may be and it would reduce my confidence in the stronger bets.

One of the things I can probably do when we get to March is start using my 1-5 Pt staking plan. If I continue to give out 1Pt bets, I should increase my 2 and 3 point bets by 1 point to increase our profits as we clearly have a decent ‘edge’ on these bets.

I have only given out ten 3Pt bets and 50% of these have won or been placed. Clearly, this is very good and shows that I do recognise real value when I see it. Hence, if someone wants to only bet a few times a month with higher stakes, this is definitely the horses to do it on. I have only given out one 3Pt win bet and it won after being heavily backed, so most of the better bets are each-way bets and tend to be in smallish fields.

Field size is something that seems to affect my performance. This isn’t surprising as in smaller fields, there are fewer horses to analyse for me and I can read the way the race will be run much better. Here’s the performance by field size:



This maybe isn’t surprising given the way I analyse races but when you consider our best winner was a 22/1 in a 32 runner field, I really do seem to struggle in larger fields. Before we think we are onto something special, we need to bear in the mind that at the end of the last flat season, we had large fields and some very inconsistent results on bad ground. Hence, this skews the results slightly but it is something to analyse in the future again and react to if necessary.

Another thing you should always pay attention to is your P&L backing horses at certain prices. Here are the results by odds of each selection:



This is another slightly surprising statistic and doesn’t exactly make total sense. I was conscious of the fact that I don’t pick many winners around the 9/1 mark as I know this is about my average price of the selections. I do seem to do better at shorter priced selections and longer priced selections but again, it is something to monitor and react to if it continues. It’s far too early to stop giving out selections at any particular odds!

One of the most talked about statistics by me and others has been my record on the AW flat. I openly admit I don’t think the form is reliable and for someone like me, it isn’t suited to my methods. However, during the winter, I have continued to give out selections and tried my best to persevere with it. Here is the breakdown we were all waiting for:



At first glance, it isn’t as bad as many of you thought and being honest, it isn’t as bad as I thought. Clearly, making a loss on any type of racing means you don’t have an ‘edge’ which is disappointing and therefore, it ultimately means you won’t make money. Even by breaking even, all you are doing is reducing your ROI which is an important measure.

The flat results above look very poor also but I would put that down to the fact it was the end of the flat season in October when I started and the results were almost as bad as the AW! I had a 22/1 winner and still only made 14.5Pts profit in total, so it wasn’t the best of times for us.

In my opinion, the true worth of this service will be from March-August and in this 6 month spell, I would hope to really push on and make better profits. Everyone knows my confidence when it comes to turf flat racing and in the summer when the form is holding up well, I will look to exploit that to the max. My methods work best when the form is reliable and I’ve said since day one that I would make far better returns in the summer than I would in the winter.

As everyone knows, I set myself a target at the start of the service and that was to achieve 240 points profit in a year. I said at the time that most of this would be achieved during the turf flat season and I stand by this comment. I hate the AW and I’ve never been very good at the NH game, so anything I’ve did this winter is a bonus. The fact I can make 50 points when I’m not in my comfort zone is only an indication of what I hope I can do when I get an opportunity on the turf flat.

This winter, I’ve managed to achieve these results by a lot of hard work and so far, it has paid off. When we get to March, my expertise on the flat should come to fruition and combined with the work ethic I’ve developed during this service, I think I’ll do something special at this game. Time will tell…..

Lastly, I know a few of you were keen to see my results by course. I don’t think it shows anything too much apart from the fact I can’t wait for the Cheltenham Festival in March!



Overall, it’s been a roller-coaster 3 months for anyone that has been here from the beginning. Anyone who has joined along the way is probably a little bemused by it all as I’ve hardly set the world alight this winter but I’m hopeful people have been given a taster of what I can do and as long as they remain patient, the profits will flow.

If I was asked to give myself a mark out of 10, I would say I’m probably at a 6 after the first 3 months. Pass marks but only just. I still feel like I haven’t shown everyone what I can do and I’m sure everyone is looking forward to Cheltenham in March and beyond.

Thanks for your continued support and I look forward to a prosperous year for us.

Graeme

Friday 2 January 2009

Much more like it!

Profit since last update £498.56

Not really sure where to start to be honest. I’m not going to do a yearly update as I’ll save the conclusion of this trading/gambling/tipping blog until the end of February 2009 as that will be the 12 month Experiment finished. I’d obviously like to wish any readers a Happy New Year and I hope 2009 brings you success in whatever you do.

OK, onto the fact I’m posting a profit and not just a small profit at that. I had a nightmare with the tipping and the trading over the Festive period and it was actually my worst ever day on Betfair the day after Boxing Day. One of the problems with my trading strategy is that when it goes tits up, it can really cost you a fair few quid. I had a good number of horses that day that didn’t shorten pre-race and then ran very poorly, resulting in me not getting any IR lays matched and basically losing a few quid.

As I said at the time, I was very annoyed with myself for the trading and also for the fact I’d tipped so many losers in such a short space of time. I said at the end of my last post though I wasn’t too worried as I’d get it back in the future. Thankfully, I didn’t have to wait too long!

I haven’t quite recouped all the losses for the poor tipping over the Festive period for the subscribers across at the site but I’ve got over half of it back I think, so I’m slowly getting there. I’m slowly getting my confidence back and as someone in the forum said, “my lack of confidence at times makes Sam Thomas look like the Rock of Gibraltar” which is a great quote and for those of you who don’t follow horse-racing, don’t worry about it!

The turning point for me was on Sunday when I tipped Exotic Dancer. I had a nice bet on it and laid off IR fairly early as it was travelling very well about 3 fences from home and closing on the favourite when my lay got matched. Obviously, as luck would have it, the favourite crashed out at the next fence and I was left with £98 on Exotic and £70 on the field! Shame when that happens but I didn’t complain too much as Exotic hosed up and it was a winning tip which was badly needed.

On Monday night, I spotted a horse in a race that had multiple form lines and was a very likely winner in my opinion. I decided it would be my first ever 3 point win bet on the tipping service. It was best priced 9/4 in the morning when I issued the note and my first bet was £400 on at 3.5 on Betfair as I was sure it would shorten. I then laid off at about 3 and then did about 7 other backs and lays as it shortened all day and at the off, I had £509 riskfree on the selection. It was about 2.3 at the off.

It got off to a dodgy start in the race and was available at 3.5 or above for the first mile of the race and I was cursing myself for not greening up at the off. My only lay was £100 at 1.5 and I wasn’t sure it was going to win with a few hurdles left. However, it then made up ground very easily and I had the option to cancel my lay if I wanted as large sums appeared to lay it at about 1.8 but I left my lay in case it fell at the last!

Thankfully, it pinged the last and it was a £450 win for me. I’ve waited a long time to have a trade like this on Betfair this year and it’s nice when it works so well. Obviously, the fact I put it up as 3 points win was a great relief as I was getting quite desperate for a decent winner to help me recoup some losses back from the Festive period.

Yesterday, I was very keen on a horse called Mr Willis and I put it up for 2 points win as a tip. My first bet was £200 at 3.1 and I didn’t lay off until 2.3 and I was pleased when it hosed up as I was so confident, I didn’t even leave an IR lay! Another great profit for me and another winning tip. Easy game this!

I also had a few losing trades on other selections but thankfully, all of these shortened pre-race after my initial bet and I only risked a few quid on each race.

So, all in all, I’ve won just less than £500 in 4 days and it’s a great end to the year and a great end to a very turbulent month for me with the trading!

One of the things I’ve been doing is spending a bit of time analysing my results for the tipping business since the inception. One of the things I’ve talked on here before is the fact I don’t make a profit to level stakes but to my suggested stakes, I make a nice profit.

Obviously, the reason for this is the fact I give out different strength of tips. When I gamble 2 points or more on a selection, I’d class this as a strong selection and when I gamble less than 2 points, I’d class this as a weak selection. Here’s the profit and loss to each type of bet:

Strong selections = 82 points profit
Weak Selection = 26 point loss

I was astonished by this to be honest and it does raise the question of why I’d bother giving out 1 point selections to subscribers. However, in my opinion, the only reason I’ve done so well is because the 1 point bets I give out very frequently allow me to gauge the strength of my better bets and it works very well in my opinion. If I stopped giving 1 point bets, I wouldn’t know the best bets to give out as tips then and I’d be lost I think.

I have started putting some thoughts into ways to expand the service and I’m looking at things like starting a laying service and maybe a strong bets service going by the results above but I won’t be rushing into anything new without discussing it with my current subscribers.