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!