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grey_gym_sock

whether 5% return (from sports betting) is worthwhile depends how consistent it is.

certainly you would on average expect to get more than that from stock markets, and with almost zero time or effort, once it's set up. but you'd also expect to experience drawdowns of up to about 50%.

a consistent 5% every year could be well worth having. clearly it can't be completely consistent. so it depends how near it is.

some relevant measures could be: what are the minimum and maximum returns experienced in a year? and what is the maximum drawdown experienced (i.e. reduction in bankroll from peak value)? and over how many years are those stats?

AlanP_2

Reaper wrote: »

5% sounds very low - do you really mean "per year"? My brother is a professional sports gambler, though not in the traditional sense. He knows nothing about the horses/people he bets on. Instead he has automated programs he wrote himself constantly searching for market discrepancies and automatically placing bets. He makes a good living out of it and has done so for many years.

I worked with a guy in Cambridge who does that and is doing very nicely out of it, very bright person and very skilled code developer.

Reaper

Yes it's a nice little niche. I expect my brother's programs compete against his in the markets. It's a constant arms race to get the competitive edge.

OXFORD_SMOGGY

5% on turnover is not the greatest in the industry some people can make up to 10% depends on the market size but considering the n number of bets this 6 month period was 1100 and daily settlement/liquidation of your money it is pretty good. Here is an example for those of you who don't get it:

Investment 1) You have a stock making 10% ROI on turnover with no input, so you invest your 100k for the year and get 110k back, 10k profit for the year easy stuff.

Investment 2) You have an edge in US sports betting market making 5% ROI on turnover you invest 50k in one day on 10 games 5k a bet, you receive on average 102.5k a day, 2.5k a day profit.

After a year Investment 1 nets 10k profit a year, Investment 2 nets (6 months good betting days) so say 180 days for arguments sake. 180 x 2.5 is 450k profit a year.

I don't bet to those levels myself as I have a significantly smaller bankroll but I have worked at places that do and bet to a fa higher turnover per year on sports markets. You can see from the examples how you can make a higher yearly profit from a smaller bankroll and smaller ROI. You neglected to think about the sample size and trade number before dismissing me!

It is also tax free profit under current legislation that's why a lot turn to sports betting.

OXFORD_SMOGGY

grey_gym_sock wrote: »

interesting. what do you think is the explanation for your edge in sports betting?

is it because bookmakers deliberately shorten the odds on heavily backed outcomes, creating opportunities to back less heavily backed outcomes at favourable odds? if it's that, i don't think there is any equivalent in stock markets.

or is it just because you have a better model than the bookmakers? that would be quite a tall order even in sports betting. but vastly more difficult in stock markets, where you're 1 person competing against teams of skilled traders who are backed up by vast computing power and custom software written by teams of extremely clever people.

or is there some other explanation?

You seem like the smartest guy on here, yes effectively I am more accurate a pricing up the probability of the event happening than the bookmaker some of the smaller markets they just run very basic algorithms for, they really aren't that good. Usually you are right the value is on the underdog due to Joe Bloggs pummelling the favourites in the market too far. I've worked on the inside and also have ten years experience trading in the industry so that helps and I am an expert in the sport. Yes you are correct in the sense that stocks are much harder to beat as they have much more advanced quantitative analysts and tech however there are over reactions to several big news stories still you can see it happening all the time, there is some edge just there and always will be.

bowlhead99

OXFORD_SMOGGY wrote: »

I am currently a professional gambler making 5% ROI a year on US Sports , I have an edge from my model in that and am looking to get into something similar with stocks.

OXFORD_SMOGGY wrote: »

Investment 2) You have an edge in US sports betting market making 5% ROI on turnover you invest 50k in one day on 10 games 5k a bet, you receive on average 102.5k a day, 2.5k a day profit.

After a year Investment 1 nets 10k profit a year, Investment 2 nets (6 months good betting days) so say 180 days for arguments sake. 180 x 2.5 is 450k profit a year.

OXFORD_SMOGGY wrote: »

You neglected to think about the sample size and trade number before dismissing me!

We didn't 'neglect to think'.

You literally told us in your earlier post, quoted above, that you were making 5% Return On Investment, per year.

Then you provided an example of how people would make 5% on half their bankroll, 180 times per year.

As you can see, a return every two days rather than the same level of return every 365 days is a significantly different return. If you tell us your annual return - and then later realise that you meant to tell us that your annual return was 100x higher - it's not *our* fault when we comment accordingly, because we didn't know you had your numbers wrong.

OXFORD_SMOGGY wrote: »

effectively I am more accurate a pricing up the probability of the event happening than the bookmaker some of the smaller markets they just run very basic algorithms for, they really aren't that good.

I've worked on the inside and also have ten years experience trading in the industry so that helps and I am an expert in the sport. Yes you are correct in the sense that stocks are much harder to beat as they have much more advanced quantitative analysts and tech however there are over reactions to several big news stories still you can see it happening all the time, there is some edge just there and always will be.

Stocks are not just much harder to beat, they are much much harder to beat.

For example, say you are an expert in some minority sport like softball or badminton - which doesn't have as much of a real following in the western world as the mainstream baseball or tennis, so may be badly priced ; and maybe only comes with a win/lose outcome, no 'it's a tie' outcome available. And you have played the sport and coached the sport and you have worked on the inside of the betting industry so you know how the bookies set their prices and you know that this particular sport, your area of expertise, is priced using lower quality data than the data you have access to -as a fervent follower, ex player and former price-setter etc.

When those niche betting opportunities come up from time to time in the obscure sport of your choice, you can either place a bet at an attractive price based on your deep understanding, or you can find two bookies who have mispriced relative to each other and arbitrage them to grind a result for yourself and overcome the spread.

The problem is in the world of stocks, you don't have that same edge, because you don't have a deep inside knowledge of a particular business type that's so obscure that the market doesn't bother to price it properly; and while your background in working for a bookies might help you judge a probability to price the win/lose outcome of a college softball game against the offered odds, you don't have a background in equity valuation to "know" the right price of a share. And unlike a badminton match that someone wins and we're done - the company share price doesn't necessarily move to the right price tomorrow or for several years even if you know where it's heading in the end.

These things mean you can't very effectively do day trading on fundamentals but only on a proprietary model of technical indicators. The big hedge funds can do that: can buy in and sell out several times a second, bend the market to their will rather than yours and there are trillions of dollars at play setting the price of a big company or an index. You might feel some major news has been overbought or oversold, but the potential outcomes are usually well priced in, so if you gamble on an up or down outcome it is just a straight bet of you versus the entire planet. So your list of investible stocks has to exclude everything anyone's heard of, and you focus on the underresearched minnows on the exchange.

But research into the published accounts and fundamentals of those minnows and their surrounding sector's data doesn't help a lot, because the fundamentals only drive next year's price rather than tomorrow morning's price, and you want to day trade. So you follow prices and volumes and charts. And rather than looking for tip sheets and trading indicators for the broad market, you only really want it for the smaller or more obscure companies... But in the smaller companies, the price action you view on a chart can be very unreliable because the shares are lightly traded or illiquid, the bid-offer spread can be large (hampering any short term effort to take quick profits), and you can't really tell what the other market participants are thinking until they make their move and then it's too late.

You mention your have been dabbling in stock trading for a short while and it's been going ok. Assuming this is "long only" rather than shorting, the difference with equities compared to say, sports betting, is that equity investing (if it can be done with low enough trading costs) generally has a positive expectation while betting has negative. So you would expect a lot of 'up' days for stock markets generally. More winners than losers.

But then you have a prolonged period like 2000-2003 or 2007-2009 when there are a lot more losses than gains to catch, and the apparently-good results you had when you demo'd a trading system for a few weeks or months or years, totally evaporates.

AnotherJoe

OXFORD_SMOGGY wrote: »

You seem like the smartest guy on here, yes effectively I am more accurate a pricing up the probability of the event happening than the bookmaker some of the smaller markets they just run very basic algorithms for, they really aren't that good. Usually you are right the value is on the underdog due to Joe Bloggs pummelling the favourites in the market too far. I've worked on the inside and also have ten years experience trading in the industry so that helps and I am an expert in the sport. Yes you are correct in the sense that stocks are much harder to beat as they have much more advanced quantitative analysts and tech however there are over reactions to several big news stories still you can see it happening all the time, there is some edge just there and always will be.

Sure, i did that myself a week after Brexit I bought into Persimmon and a couple of other builders after they all dropped 40-50% or so in a massive overreaction. I've still got the Persimmon. Last time i looked it was up 75%. (just in case you think I'm a whizz i also lost £10k in a company that was a complete fraud and the CEO bunked off with all the money)

However, that's not a "system you can plug into an algorithm which doesn't know if the 50% drop on news is stupid (as it was with Brexit) or not enough, as the 75% drop on Carillion a few weeks before it went belly up was.

Your opening point was that you were looking for a system based on day trading signals. Thats very different to looking at the news and deciding if the reaction to something is OTT or understated. There are no "signals" that will tell you that.

OXFORD_SMOGGY

bowlhead99 wrote: »

We didn't 'neglect to think'.

You literally told us in your earlier post, quoted above, that you were making 5% Return On Investment, per year.

Then you provided an example of how people would make 5% on half their bankroll, 180 times per year.

As you can see, a return every two days rather than the same level of return every 365 days is a significantly different return. If you tell us your annual return - and then later realise that you meant to tell us that your annual return was 100x higher - it's not *our* fault when we comment accordingly, because we didn't know you had your numbers wrong.

My annual return is still 5% ROI a year that's what I stated at the beginning The thing you didn't think to take one second to think about was the annual turnover you just quashed it straight away as lame. With sports betting you are able to put through much more turnover throughout the year, my example of 180 days is because there is only about 6 months worth of good sports betting days throughout the year.

Anyway you get it now so water under the bridge and all that. What you say about stocks I 100% agree with, but it is still possible to make gains. Look at mother care he other day I was able to get in and out 2 day trade for about 50% gains due to the overreaction. I also am a great trader, that isn't something that can be taught or bought, instinct and experience. So what I am trying to say I guess is if there is somewhere that can give me the quant basics I can take care of the rest, there surely must be some service to supplement my trading with some 'loose' signals lets say. I would never back anything blind not even Warren Buffet in his prime haha!

OXFORD_SMOGGY

Another Joe yes fair point I nearly dabbled in Carillion myself, these are probably the shares that are least quantifiable and therefore have the biggest potential edge. I agree maybe day trading big companies that are stable will be very hard, possible microscopic edges that are snapped up by investment banks very quickly. The benefit of trading stocks though is as mentioned they generally go up with a positive expectation, which is one advantage over betting. Interesting debate cheers lads Ill keep my research up I do realise I was probably asking for the impossible but I just need some tools to help me succeed and match up with my trades.

Malthusian

OXFORD_SMOGGY wrote: »

My annual return is still 5% ROI a year that's what I stated at the beginning The thing you didn't think to take one second to think about was the annual turnover you just quashed it straight away as lame. With sports betting you are able to put through much more turnover throughout the year, my example of 180 days is because there is only about 6 months worth of good sports betting days throughout the year.

If your annual return is 5% then it is lame. The fact that you have to churn more money to get that 5% means you are expending more effort and taking more risks than those of us who make more than 5% through less risky and less time-consuming means.

Anyway you get it now so water under the bridge and all that. What you say about stocks I 100% agree with, but it is still possible to make gains. Look at mother care he other day I was able to get in and out 2 day trade for about 50% gains due to the overreaction. I also am a great trader, that isn't something that can be taught or bought, instinct and experience.

Then why on earth are you looking for share tips?