Recently, I have had enquiries from people looking for books for building fundamental trading systems for horse racing markets. As regular readers will know I am a technical trader but I do have an interest in the fundamental aspects of data and have researched the subject extensively.
My own personal view is that all public information about a runner is in the price. Any price moves are due to new public information (parade ring, horse acting up on the gallop or in the stalls etc.) or private information (to which I am not a party) entering the market. New information moves prices but not instantaneously and that is where I concentrate my efforts.
My own personal view is that all public information about a runner is in the price. Any price moves are due to new public information (parade ring, horse acting up on the gallop or in the stalls etc.) or private information (to which I am not a party) entering the market. New information moves prices but not instantaneously and that is where I concentrate my efforts.
The following is a list of books that I think will be of interest to the fundamental trader in horse racing markets. I don't include any American books as there is a lot of reference to data that is not available to many traders outside of the US (in particular the UK), namely fractional times and pace data.
The Compleat Horse Player is written by David Edelman an Australian economist. If Leighton Vaughan Williams is the British version of William Ziemba then Edelman is surely the Australian version.
Edelman covers those areas of fundamental data that he feels are relevant to strategy building but also points out those that he feels are Red Herrings, such as trainers, jockeys, track bias and dosage. The book also covers technical aspects, money management, exotics and the mechanics of a betting operation. If you are going to start anywhere then start reading the books of people with a solid mathematical knowledge.
When it comes to fundamental trading it all boils down to determining which will be the fastest horse (i.e. the first to cross the winning line) depending on conditions (distance, weight, course, weather) and the predicted pace of the race. In terms of pace, a race may have two or more potential winners but the pace of the race will determine which runner will win. The differing odds between these potential winners is a matter of the market trying to predict the pace of the race rather than the time of the race.
UK horse racing does not have fractional times nor detailed pace data so any edge you can gain in that field will put you at a big advantage.
Taking Chances: Winning with Probability
A book that is in my six books for sports traders list and one that should be in any list of books where an event involves probabilities. Taking Chances is written by Dr John Haigh from the University of Sussex the book takes the reader through the required amount of probability theory to understand the topics in the rest of the book. Topics covered include football, horse racing casino games and other game of chance where people may be tempted to back their opinion with cash. Also included is a thorough working of Kelly Criterion for both single and multiple bets. This book remains on my desk and never gets put on the shelf.
Taking Chances: Winning with Probability
Mordin on Time
Nick Mordin has written widely on UK horse racing and is very much in the old school of form following (handicapping) and so if you are going to go down that route then you should read his books on the subject. I recommend that you read Mordin on Time as it contains a wealth of data on speed ratings derived from finishing
distances. From information on lengths per second and this
book you will be able to create your own speed rating for any horse.
Published in 2010, Bioenergetics and Racehorse Ratings had many horse racing forums chattering.
Starting from human athletics through veterinary science and
biomechanics, the book builds a model to rate a horse's ability. This book is an interesting read in that it attempts to come up
with speed ratings using different methods to the norm. Although you will probably come up with ratings similar to the ones in Mordin's book you will do so via different route and learn a lot in the process.