Thursday, 21 June 2012

Increase Betfair Profits - Do A Good Turn

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I feel bad - I've been back from holiday for 3 weeks and I have posted on my blog once! A poor effort but if the truth is told, all of the rain we've had over the last couple of weeks has dampened my mood. It's one of the major drawbacks of being a cricket gambler/trader - you just can't control the weather and this can have a big effect on your monthly p&l.  Fortunately, things have started to pick up over the last few days so I thought it was about time I jotted down some thoughts.
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Here goes...

During the IPL I took to tweeting and conversing with other traders on a more regular basis and I found it very interesting to observe how each person would interpret information in a different way. It also became clear very quickly that a lot of us have different approaches to how we manage our positions during a game. This doesn't sound very enlightening, but when someone mentioned that after they took an initial position they normally stuck with it, it made me realise that some may not not appreciate the value of 'turns'.

Turns? What the hell are they? In short a 'turn' is when you've successfully been matched on both the 'back'  and 'lay' sides of a selection.  The beauty of Betfair is that you're able to do this many times during an event for no additional cost, so by 'turning' my money over and over and taking advantage of the market fluctuations it's possible to generate bigger profits whilst keeping the risks low.

Time for an example. The Betfair graph below shows the in-play price of Somerset in their recent match against Northants (click to enlarge).

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You can see that they started the match at around 1.60 favourites, so had I looked to back them at this point then the most I could have won had I held my position throughout would have been 60 ticks (1.60 to 1.00).  That's a fair return, but I would have had to stuck to my guns throughout the match, Somerset would have needed to win the game and I'd have had to go through the unnecessary stress and self doubts along the way. Alternatively, by entering the market many times and conducting many 'turns' the amount of ticks I could have won would have significantly increased. A rough estimate following each peak and trough on the graph would give an indication that at least 330 ticks were possible if it was traded perfectly. That's obviously very unlikely, but even 20% of that would have returned 66 ticks which would have been more than the back and hold approach.
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Still with me? Good. To clarify, I'm not saying "become a scalper" - I'm saying be flexible and have an open mind when it comes to the market.  Turns can last for seconds or hours, but the length of time you have an position open doesn't matter, it's being aware that being active in the market can be a good thing and can offer up more opportunities.
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