Luke, what is sports trading?

Luke, what is sports trading?

I think it’s time for a FAQ type post. I’m often telling people what I do, I can tell that for the most part, its hard to grasp verbally. Maybe written with some pretty pictures will help people to get their heads around it. Hopefully I can dispel some some of the common beliefs that just aren’t right along the way too.

Q. What is sports trading? 

A. Sports trading is trading the fluctuations in prices before and during the event. Trading the movements of the odds allows you to build whats called “a book” or ledger. Much like a bookmaker builds a book in any of the events they take bets on, sports traders can build their book by backing or laying a particular runner in an event.

Q. What is lay betting?

A. When I “lay a bet”, I’m essentially playing bookmaker. This means someone has a bet with me on a particular runner in an event and if that runner wins, I need to pay out the person the worth of the bet. If the runner loses I keep the amount bet by the person, just like a bookmaker would.

What is lay betting?
Lay bet overview. You are playing bookmaker.

 

Q. Whats the difference between what you do and a bookmaker? 

A. There are subtle differences, but ultimately there are a lot of similarities to what we do. The biggest difference is obviously the volume, solo sports traders like myself have much smaller bankrolls than your big corporate bookies. As such, the size of the bets taken and placed are much smaller. I’m able to dictate from the get go, how much risk I have on any given trade. Like bookmakers though I can adjust that risk before and during the match.

Q. So you’re just gambling for a living?

A. Well, in short, yes. What makes the proposition different from a few mates having a bet on the footy each weekend though is the ability for me to hedge my position during the event. I often have a number of chances to limit my risk while the match is on, or, guarantee profits no matter the outcome of the event. Check out the screen grab from Betfair on a trade done in the 2011 French Open.

Betfair trading French Open 2011 on Rafael Nadal
Betfair trading French Open 2011 on Rafael Nadal

 

Q. Trading the stock market would be less risky, right? 

A. This is a massive myth. I’d say they carry equal risk, if you buy shares you are making a bet that the value of those shares will rise in value. No one knows, unless you’re insider trading, that would be like fixing in the sports trading world, but that topic is for another day. I’d go as far to say that any investment is a gamble, some bigger than others, but you think the people who had a total of $140 billion invested in their saving accounts during the great depression saw that investment as a “gamble”? Of course not, it was “as safe as houses”. Speaking of houses, do you think the people that bought “sub-prime” homes in the US before the property bubble bust in the mid 2000’s thought they were gambling? No, it was a sure thing, its property. There are no “sure things” when investing at any level.

Q. How do you know what will happen in an event?

A. I don’t, no one knows, but based on my knowledge of how prices move in the market and what might be “more likely” to happen I can take positions before or during a match. Let me give you an example, lets say you look at the form of a race and see that out of the 8 runners, one of the runners has lead in every one of its previous races, meanwhile, non of the other runners have ever lead. You could make a fair estimation that this runner will lead again and place a back bet on the runner, expecting it to shorten in price the further it goes along in front. At a certain time in the race you can place a lay bet on that horse either removing liability or creating a hedge across all of the runners (like the Nadal example earlier).

Q. Do you use any specific tools to trade with?

A. I use a program called Geeks Toy which is designed for sports trading. There is a number of these about, some good, some not. A bunch of guys I know just use the Betfair interface though and they are very successful traders. So you don’t need expensive kit to start off trading, just a smartphone/ computer, internet and maybe a calculator.

Q. Don’t you wish you had security of knowing what you make every week? 

A. I’d be lying if I said there isn’t a part of me that would love that. But at the same time, I don’t see employment or  your own business as anything that is 100% fail proof either. In fact, starting a business is a huge gamble in itself. I had coffee with a friend of mine recently that has gone balls out to start his own business, hes liquidated everything and I mean everything, houses, cars, the lot. On top of that hes in debt, this guy will likely make it happen because thats the kind of guy he is, but still, there are risks attached to what hes done, risks that will have serious financial ramifications if for what ever reason it doesn’t go his way. As for employee status, I hate working for someone else, first and foremost, secondly, just because you have a job that doesn’t mean you will have employment with that business forever. You wouldn’t have to travel far to find someone with a horrible story of being made redundant and depending on their age when made redundant, it can be very tough to get back into the work force.

Q. How much can you make sports trading realistically?  

A. Realistically, its like any other industry, there are top earners and there are bottom earners. Starting out I wouldn’t have expectations too much higher than trying to make a few bucks on the side as you learn the ropes. I know guys quite well that are making between $250,000 – $500,000 P.A, in all likelihood there are likely solo operators making more, I just don’t know them. If you were able to start your own company in bookmaking down the track, the skies the limit.

If you have any other questions you would like to ask, please don’t hesitate to comment below or shoot me an email at lukeamacatyahoodotcomdotau.

Cheers Luke

 

 

 

 

 

My whole life is a holiday but I need to get away from it.

My whole life is a holiday but I need to get away from it.

It can be easy to forget how good I have it sometimes; for the last couple of years I’ve player poker and bet on sport for a living. So many people would kill to do that full-time and sometimes I forget that. The enjoyment can go out of it, tied up in the day to day, play to play stresses, I need to learn to enjoy it more and remember that losses are all a part of it. It doesn’t define me.

That can be easier said than done at times, especially when you have people in your life that are negative towards your career choice. I don’t hold any anger towards those people, I appreciate the concern, but I wish they would trust me a little more. I don’t think I give off the impression of being stupid (majority of the time), so you would think there would be a level of belief in my decision making processes.

  • “You’re not paying tax so you’re not contributing to society”. Not sure that’s right, paid tons of tax in my life through my businesses, I’m not doing anything illegal, in Australia we aren’t required to pay tax on this revenue. In fact the money is taxed but instead of the punter paying tax on this side the bookmakers pay tax on the money, so the idea that winnings are “untaxed” is actually wrong.
  • “You’re not a hard worker”This one annoys me, it’s totally uninformed. People don’t see the countless hours of reading, testing, studying, learning, blog writing that I do to gain better skills. I don’t dig holes for a living so that means I don’t work hard?
  • “You’re a gambler”. Yes, I am. I always have been. People are so quick to split certain types of risks or gambles from others. Starting a business is a gamble, no guarantee it works out, but no one says “Boo” when it fails like most businesses ultimately do. Probably the funniest example of this double standard is the difference between a day trader that trades the stock market and a day trader that trades sport. So many people see the stock market trader as a “professional”, “a real career”, “a safer option” in the world of trading. What an absolute load of shit; it doesn’t matter what you trade, unless you have insider info, you are GAMBLING. That is by definition; risking money on an outcome that is unknown. You buy a stock with the hope it goes up, it doesn’t always happen so guess what? You just gambled.
  • “You’re a gambling addict”Truth is, there was a time in my life where my gambling was out of control. I was living so far beyond my means; it wasn’t good. That time was 10 years ago, I was 18 years old and living cheque to cheque, times have changed and I’m a little older and a lot wiser.
  • “You’re an idiot”. Usually a comment like this wouldn’t upset me as I’ve been called way worse in my life 🙂 In this case though, the person who made the comment, although uninformed, makes my personal life tougher. It creates friction for me and a bunch of people close to me; that obviously doesn’t help with my overall head space.

I try not to let these things get to me, but they do. When it all comes as regularly as it does you start doubting yourself and your decisions. Not only your career path decisions, but your decisions when trading. I find that I take unneeded risks or over stake in an attempt to have a “big score” and try to stick it up the doubters. I guess it’s ego driven, but I feel like I have to prove myself. Safe to say it never works out well for me aiming for those “big scores”.

The last month has been very challenging, I haven’t made much money at all and I’ve had some personal issues that have surely played a part in that tough run. BBL was as close to Armageddon as it could be. It frustrates me that I can’t seem to make any real headway in that format as yet (that said I know I have big leaks). The added pressure from the constant losses (sometimes 4 figures) in T20 will probably see me take a back seat on it for a while. It’s not that I’ve given up completely, it’s just that I need to read over all my notes and make some adjustments to my strategies. I’m going to focus on what is clearly my best format which is Test and then some more work on ODI, my mistakes are not punished as hard in those formats and it will help me build up some confidence again. “Money lost, nothing lost, confidence lost, everything lost.”

I’m heading off to Vietnam on holiday on the 3rd of FebI need this break just to clear my head, read some notes, recalibrate everything and come back fresh and hungry to make some money. I always found my hunger in my businesses went through the roof after a holiday and expect to see a similar result on the trading front. The holiday will be great, but regardless of that I need to be much more grateful for what I have. I have a great life, its not exactly the way other people would live theirs, but that doesn’t make either of our lives wrong, it just makes us different.

+$554 on the week, account balance +$9,927.

Cheers Luke

Play-by-play-trade-by-trade
Play-by-play, trade-by-trade. Had a good little period, was up over $2k, gave it all back bar around $500. Frustrating, but it’s a part of the game. All about the long-term. It’s a marathon not a sprint.

Betfair profit and loss graph showing close to the first 4 months of my trading.

Too much beer make Luke go something, something.

Too much beer make Luke go something, something.

Fair to say this hasn’t been my best period. I can’t point to one specific reason for it either, seems like a lot of annoying little things that have added up. I haven’t lost my shit with the staking which is good (on the professional front anyway) and that’s probably the main reason that I’m not further behind. Shit got a little twisted at the Turf Club for Magic Millions day, but that was fun money, hardly anything professional about that punting at all, but I did drop $2,300 drunk laying every favourite I could. When 9 out of 10 of those favourites won, I took the gas. I didn’t include that in my ledger as it has nothing to do with what I’m doing in a professional light, it was for my entertainment (mind you wasn’t much entertaining about dropping $2,300).

I guess the biggest thing that’s hurting me is still the short form of cricket. Sadly even a pitch siding bit of fun at the Gabba last week resulted in a loss on the spreadsheet. Betfair went down for around 45 seconds while I had an open position. I called to close out; but it was too late, Ben “Cuntting” added another point on the list as to why I hate him when he was clean bowled while I was on the blower. FML. That cost me $600, I was able to claw that back to $180 down on the match, but still, even when I’m ahead of everyone in time; things weren’t going my way.

I am working on the shorter form everyday, I watch the market every day, I learn things every day, its really about putting those into practice. I do have a good group of people that are helping me which I’m thankful for. If trading is something you are trying your hand at on your own, in my opinion you’re doing it wrong. A network is super important, bounce different ideas off each other, different entry points, it makes a big difference.

I felt like I made a small break through last night in the Big Bash. After a debrief with one guy who is helping me; we settled on a few key points I really needed to focus on. I’d say these are things I’ve chatted through before, but this time I wasn’t going to rely on my head to remember them all. I created myself a “cheat sheet”, now when I’m trading T20 matches this sits open on my desktop. Last night was the first time I used it and it was the first green book I’ve had this BBL on the ladders, so that’s pleasing. Too small a sample to say I’ve cracked the Da Vinci code, but it’s a start.

Despite the less than favourable time on the punt, I had a fun week last week. Thanks to the team at Betfair VIP Services, myself and a +1 were invited to come along to Magic Millions Day at the Gold Coast Turf Club. I took a mate who dabbles in trading and loves a punt on the nags. Thursday we attended the horse sales themselves, then into Broadbeach for a private function. Saturday it was the big race day in the “Jewel VIP Marquee”. What an event this was, everything was really done superbly. The location at the track was unbelievable and the Gold Coast turned on the weather for it.

I’m leaving for Vietnam at the start of February, so I have 20 days left to turn it around, get back up over the $10k mark and start to surge ahead again. Been a bit stuck of late but at least I feel like I’m making some headway on the trading front, even if the results of late haven’t been there. I read an interesting quote the other day and quite enjoyed it. Don’t know who it’s by and don’t care really; “if you’re sick of starting over again, then stop giving up.” Happy trading and good luck.

-$1174 on the week, account balance +$9,373.

Cheers Luke

Betfair profit and loss from trading
Far from the best little period I’ve had. A bunch of things have lead to this, putting some of it down to “learning money”, other things I need to get tidied up quickly and be better. Every little bit counts, it’s either +EV or -EV, no in between.

Betfair profit and loss chart tanking a little on me

Betfair Magic Millions at Gold Coast Turf Club
All the bits and pieces from Betfair for our weekend at the Gold Coast Turf Club for Magic Millions. Thanks to Josh, Bella and the team for inviting me and all the work that went in to organising that.
Betfair and Magic Millions horse sales on the Gold Coast
At the Magic Millions sales, the average lot price was $189,000, the biggest sale was $1.1 million the day we were there. The other end of the scale was more to our liking with the cheapest going for $15,000.
The pavilion had a buffet section for Magic Millions race day 2016
The buffet area of the pavilion. The food was pretty outstanding, mind you, wasn’t much eaten by Robbie and myself.
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The Champagne was flowing like water, a lot less nudity than I thought there would be with so many people getting drilled on the bubbly.
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We were seated in this area on the left.
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The girl’s old man is a 25 year Richmond member and would probably do bad things to this man. Had to grab a quick selfie with this legend. I’m reliably informed he’s kicked the most goals at “The G”. Probably the most behinds too.
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Little outdoor area for people to enjoy.
Fashion at Magic Millions day on the Gold Coast
“It’s fashion darling”.
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The viewing area of the mounting yard was first class.
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Pretty sure that cunt of a thing there cost me $600, I layed it, fail!
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Accidental selfie, but things starting to get a little wild from here onwards.
Sliders to finish off the day and help the drunks at Magic Millions on the Gold Coast.
Luckily the “shrewdies” at Gold Coast turf club had sliders to finish off the day and sober up the piss wrecks.

 

Mid range $, top level control.

Mid range $, top level control.

This week I didn’t break any world records financially. What excited me was the position sizes and control. Some of my best weeks of poker were not the massive money weeks, but actually the times when I played my absolute best poker, it’s rewarding to do that, you achieved what you set out to achieve. Not for one minute suggesting my positions were all perfect this week, but I am saying that I didn’t have any mental positions where 20% of my bankroll was at risk, “grinded it out”.

Not much to report really, will keep this pretty short, focusing most of my energy on cricket now, it’s the sport I am most knowledgeable on and that clearly helps with decisions. Mark Iverson (@markyiverson) tweeted to me after last week saying:

It was very thought provoking for me, I wasn’t really aware just how many matches are televised. With that said, many  have shitty starting times for me; 2am etc. Still, it makes you realise you don’t need to take much out of each game to run up a quality return per year. Throw in some other sports and you have a return.

One exciting thing that happened this week, I commenced working with an old friend of mine on building a cricket database. I’ve always described this friend as the smartest guy I know (book smarts that is, the street smarts have come along way, but still some way to go) and I haven’t met anyone that would take that title from him yet. He used to work for me and I’ll never forget in the interview asking him if he knew 3 different coding languages. He cracked up laughing and replied “I’ve been doing those since I was 12”. He was 17 when we hired him and he took our business to another level. It’s exciting to be working with him again and I’m looking forward to journey and what comes of it for us all.

+$840 on the week, account balance +$4844

Cheers Luke

Profit and loss graph from Betfair Trading

Betfair trades in excel spreadsheet
Weekly trades, I supplied the excel spreadsheet this week as I have started to use the bookmakers when they have better prices. That leaves my Betfair book often out of whack. I’ve been able to use this to my advantage quite successfully in recent times by saving money on commission with exchanges. In the India v SA 3rd test I was able to back for a very big amount at $1.07 on India, while laying $1.06 on exchange. This took my green on India to a red and exchanged the winnings to the bookmaker instead. So in short I still picked up my green + 1% and I paid no commission on this one transaction, saved myself around $20, all adds up I guess.
Betfair cricket trading on India v South Africa
Betfair trade on India v South Africa, before a ball was even bowled, beautiful green. I quickly took this green and played with it for the rest of the test match. It’s quite enjoyable to use the won money to trade with, playing from in front is great.

I am not a robot, I’m human.

I am not a robot, I’m human.

Well, I’ll say this much about myself; I’m consistent. In this case, the consistency wasn’t a great thing. Much like every other market I’ve tried (horse racing & tennis) mostly spring to mind I jumped into basketball with no idea what I was doing and started mashing big stake buttons to get myself out of early trouble. I didn’t get out of trouble, quite the opposite actually, it’s fair to say my first few forays into the NBA were bad, like really bad.

In retrospect, I shouldn’t have been anywhere near the ladders on the day I gave up a big bunch of cash. Last week I was shaken quite severely with a private family matter. The matter involved a domestic violence issue, it’s not until you are involved in something like that, that you realise how thin the help on the ground is. The support for woman who have been abused in these situations is not enough, I can only imagine how bad it was 10 or 15 years ago.

I thought I was ok; I didn’t touch my computer the night of or the day after, I knew my head wasn’t right. But after that I thought I would be fine, I’d slept and I felt fine, I wasn’t. My thought processes were clearly irrational, I was trading sports I didn’t know, tennis matches I’ve got no data on, I was not being myself. In some ways, I was almost wanting to feel some success through trading to help me with some of the pain I had been through in the last 48 hours. My emotions got to me big time, this is an instance where I can openly admit that.

I was quickly down $900 to start the week. What a disaster, I was upset with what had happened and on top of that I had dumped $900, almost half of what I had made the week before. All the doubt comes rushing back so quickly; “can I do this”, “am I good enough”, “have I just been lucky”. These are not thoughts I’m unfamiliar with; when I started playing poker I also went through this. That makes it easier to deal with, but they still rattle you to an extent.

STOP, PUT DOWN THE MOUSE, STEP AWAY FROM THE COMPUTER! I did have the presence of mind to stop before too much damage was done, there’s a positive to take from that. I was also able to fight back later in the week to a manageable loss of something just under $600, again, another positive. Moving forward, I do need to be more mindful of how external pressures or personal matters can adversely effect my trading. I’m often told about “becoming a robot”, that’s just not me. For a long time I thought if I couldn’t do this I couldn’t be a successful poker player and in turn a successful trader, but I beg to differ. For me, when I say; “go and get fucked, shit pass” or “for fuck’s sake hit a winner”, I’m not so wildly filled with emotion that I’m throwing things around the room, I’m just releasing my thoughts, it’s mostly word vomit (those who know me, know I can spew some words). Emotion was what I felt when I found out about the abuse, the red I saw, the screaming of “FUCKKK I’m going to kill him”, that was emotion.

This was a tough week; physically, mentally, emotionally, financially. Time will only tell how the personal matter resolves itself, as for the trading, it’s onwards and upwards, international cricket season starts this week here in Australia and I’m really looking forward to that.

-$571 on the week, account balance +$7,001

Cheers Luke

Week 5 or 6 profit graph Betfair Trading

Weekly Profit and Loss Betfair Trading
Think this is week 5 or 6 now of my Betfair Trading experience. Making in roads, learning lots.
NBA betfair trading Utah v Pacers
Think this is week 5 or 6 now of my Betfair Trading experience. Making in roads, learning lots.

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I’m a “LAG” I should be a “TAG”.

I’m a “LAG”  I should be a “TAG”.

“LAG” – Loose Aggressive (poker player definition); maniac players can turn a boring session of poker into a wild roller coaster ride. They are in many cases super aggressive, betting and raising with little concern about what their cards are. They have one of the good attributes of successful poker players, and that is aggression. They’ll win a lot of blinds and antes, steal many pots with nothing, and when they do hit good hands they almost always get paid off in a big way, since nobody believes they ever have a hand. Sounds fun? It is an unprofitable way to play, unfortunately.

“TAG” – Tight Aggressive (poker player definition); a tight aggressive player plays very few hands, relative to how many he is dealt, but when he does play a hand he is very aggressive, betting, raising and check raising. A typical tight aggressive player will only play about 20% of hands that are dealt to him. Tight aggressive players are the sharks in the poker ocean. The vast majority of long term profitable poker players fall under this tight aggressive category. Why is the tight aggressive style a winning style? Poker rewards two things above all else, and that is patience and aggression.

It’s only Thursday and I may not trade again this week. Last night was an absolute disaster, but it goes back a little further than just last night. The last 10 days or so have been really tough; net cords, framed balls floating in, wickets the ball after I red out, breaks of serve at the wrong times, hedging green and costing me money, hedging red and costing me green, it seems like what ever I touch turns to shit. A lot of variance going against me, but there has to be a reason for it, right? The sample is small (10 days) so I’m sure a good portion of it is unavoidable variance, but something is different in the way I’m going about it, there’s a difference from three weeks ago.

The unavoidable shit is getting to me, but fuck, I should be used to events going against me. For almost five months I went through a break even stretch in poker, the shit that was happening in that period was absurd. It wasn’t all the cards; It was a combination of me playing like a drooler, combined with the cards going against me. It’s like this horrible roller coaster that you can’t get off; unlucky outcome, go on tilt, make bad choice, lose money, unlucky outcome, make bad choice, lose money, etc.

I’m the only one that can break the chain, the variance will always be there, in fact, in part it is how money is made in trading and poker alike. No matter how much of a control freak you are, you can never change that, the variance will always be there “doing it’s thing”, “fisting you”. What can be changed is the “go on tilt”, “make bad choice” part, I need to channel my inner “LAG”, I know I can do it because I’m a LAG on the felt.

It was only three weeks ago that I was being much more selective in my entries, so what changed? The biggest change I noticed was in my head, it started after my first decent profit week. The next week I started to become concerned with having another good week to back it up. As a result, I started taking unnecessary risks, second guessing the data I use and it cost me early. I fought back to book a nice win, but these weird seeds were planted in my mind. Being down early in the last two weeks took me away from my standard line of strategy, in short, I went on tilt.

I still wish to recognise that I’m doing a lot right. It isn’t all doom and gloom, I’m still in front, it won’t take me long to turn this around, I just have to get back to what was working. I’ve been able to identify the issues, now it’s important I resolve them.

P.s. obviously I traded again before the week was out. I managed to get myself into a really nice little position with a $225 free bet on one player. I have a general rule that I don’t hedge for less than half of what ever my initial liability was. In this case I needed around $115 (honestly I would have hedged at any 3 figure number) but I only hit $88 at my peak. This is two or three missed hedges now for sizeable amounts. If anyone that reads this has any suggestions on how they tackles this, I know there is not rule book but there must be some thinking around it, any advice is appreciated.

Cheers Luke

Gambling joke
Funny little gambling joke.

Quick update from me this week.

Quick update from me this week.

Just a quick update this week, was a tough week. I ended up with a small profit on the week, which is something to smile about. I started the week out giving up a sizeable loss in NFL market which sucks (just happened again this week also). Starting the week out with a deficit for the first time was a testing time for me.

I had to remove that from my psyche and really focus on making good decisions. Early on in the week I didn’t do that, I let what had happened in the NFL affect my decisions. I kept looking for the “big play” that was going to “get me out of the hole”. I actually gave up 3 $50+ profits that became losses, hoping that they would give me a big win. That hurt me, turning green to red is the worst.

Bunch of bad variance; I certainly had a good chunk of that this week too. It ebbs and flows and it’s important to not lose your head or your cool. It was only 3 or 4 weeks ago that I would have lost my shit and upped the stakes, so I’m proud that I haven’t fallen into that trap this week just gone.

+$110 on the week, account balance $5,762.

Cheers Luke

profit loss chart

betfair profit loss
Picked up around 2% profit from my initial $5,000 starting balance.