The importance of being trendy

Fear not, this post is not about fashion and I’m not about to suggest you throw away the trusty adidias sambas or your Ben Sherman apparel but it is instead about following betting trends. I had recently purchased and have now finished reading Programming for Betfair and Betfair Trading Techniques by James Butler from Betfair Pro Trader. Both books were good overall and well worth their price. Whilst I do already have experience of using betfair’s API, it was particularly worthwhile for me to be able to learn to use another language (Visual Basic) to do this. I got as far as retrieving prices and placing bets and can confirm that the code works. I haven’t built the GUI (Graphical User Interface) though and probably won’t bother with that since I already have the use of other software that does this and more and any other betting that I do via the API will be fully automated.

If you don’t intend on coding at all then you probably shouldn’t buy either book but the second book contains some useful advice as well as code. At times it reads a bit like an everything I’ve ever learned about betting and whilst it’s not revolutionary, there are some nuggets. The biggest take away and indeed the general overall advice was to reaffirm just how important it is to analyse the market and to make full use of this information. James makes no secret of the fact that he uses trend analysis to trade his way to profits.

When you think about it there are really only 3 main ways of profiting from betting:

  1. Having access to more information than others
  2. Superior ability to analyse the available fundamental data
  3. Analysing the market activity

Having access to information that is not available to the public is going to be near on impossible for the average punter. You might be lucky enough to one day catch Roger Federer downing triple vodkas in the Discotech the night before a tennis match and grab yourself a value lay bet but this isn’t going to help you on a consistent basis. Furthermore Federer aka The GOAT (Greatest Of All Time) would probably still turn up and win anyway. If you work with racehorses and for trainers or owners then you might well be privy to some useful info e.g. injuries or clever handicapping tactics but most of us aren’t prepared to muck out Thistlecrack for access to this either.

Being able to analyse data better than the many phd mathematicians and quants is also going to be beyond even the more intelligent amongst us. It is true that horse racing provides a greater opportunity for casual punters to profit than most sports as indeed our horse racing tipsters have shown. This is by no means easy though and can be very time-consuming, so perhaps the best chance of profiting from betting is to copy others or follow the market. This way you are utilising and benefiting from what the experts or those with more info know.

There are numerous claims of market movers form various sources each and every day in the horse racing markets but there is more to following trends however than backing the favourite in the 2.30 because oddschecker have noted that it rather predictably shortened from 6/4 to 4/5. If a favourite has moved from such a short price to an even shorter one then any value has almost certainly gone, if there was any to be had in the first place.  If you’re a backer and not a trader you need to be spotting moves at higher prices. You also need to spot them before the price has plateaued and reached a point where it’s no longer value. There are also dozens of these types of moves per day though but they’re not all significant.

Further analysis of things like the amounts traded and amounts now available, the moving average and how many runners are in the race can all help in determining whether there is a trend worth following and whether it is likely to continue or not. All this information is available via betfair’s API and it’s this type of information that we use to create our own Horse Racing Market Movers. The markets on betfair are less liquid than they used to be but this has its advantages as ‘in the know’ type activity can standout like a sore thumb.  These selections are showing a reasonable profit overall and there are still further methods to explore. I am certain they can be improved but when things appear to be working well it feels safer not to tinker with it. I have also improved the horselays selections recently and I’m now working on a new profile that looks for potential trading opportunities.

If you can identify the type of races that regularly see the favourite shorten from 6/4 to 4/5 then there is in fact a trading opportunity there, even though there might be little to no actual value in the price from a betting perspective. I think this will be the type of trading opportunity that James looks for as this is where the most liquidity is.

So identifying trends is not necessarily that simple but it doesn’t always have to be complicated. Generally speaking if you can spot a horse or a team that has shortened and you expect it to shorten further you should be able to turn a profit, whether this be because you’ve found value or just because you’re able to trade the movement (some would argue it’s the same thing but that’s another topic).

I was made aware of someone who a while back used to check the graphs on betfair to look for any consistent downward trends (I’m sure there is a more mathematical term for this!) significantly before kick off and then he would back at the top market price with the bookies. This requires a lot more manual effort than is required for coders and betfair API users but it does show that you can find value without superior information or technical skills if you are willing to put in the effort. Perhaps learning to code and redirecting that effort would be a better way to go long-term however.

The wisdom of the crowds theory shows that the market on average will be at its most accurate right before the event is about to start. This is when all possible information is known. So if you could get the opinion of 100 people a couple of says before you’d be in a good position to preempt what the overall opinion might be. Perhaps you’d be able to determine that a handful of people knew more about the event and they all had a particular opinion. This would be akin to spotting more money traded at a certain price for example.

In our holy grail betting system we were originally including bets that ‘became value’ or at least qualified as value bets close to kick off. When we analysed these though the returns were significantly poorer compared with the bets we made 2 days before kick off. Quite clearly the odds were moving for a reason and we were silly to go against the market. In the days leading up to matchday we were on more of a level playing field and our in-depth analysis of the stats at least gave us more of a chance of finding value.

I believe that betting early is one of the best pieces of advice anyone can give and is the simplest thing you can do to improve your betting. Form your opinion, crunch the numbers and see where the market is heading early doors. In racing you can’t lose because most bookies offer best odds guaranteed and will settle your bet at the start price if it was bigger than the price you took. In other sports your selection could end up higher but if it does then it’s probably for a reason and it’s not going to win. There might be an odd occasion that you believe the market to be incorrect and in that case I would recommend you to back it again at the bigger price. Just don’t make a habit of it because the market is usually right.