Gaming Betfair?

Recently, I was approached by a journalist looking for information and a few quotes. During the conversation, the term "gaming" cropped up. The journalist wanted to know if it was possible to game Betfair. In other words, is it possible to make money on betting markets using non-traditional methods.

What is the traditional method of winning in a betting market? Until the advent of exchanges, the only way to profit from betting was through form following and the statistical arbitrage of incorrect prices.

Today, Betfair and similar exchanges allow for trading on both sides of the back/lay spread, which gives rise to technical trading of sports. In a way technical trading is a  legitimate form of "gaming" a market because at a basic level no knowledge of form is required.

At its simplest, technical trading can involve pure and bonus arbitrage, which are mechanical ways of profiting from an exchange. However, these arbs are not entirely risk free. More  complex methods of technical trading involve an understanding of market structure and psychology. I go into more detail on this in Betfair Trading Techniques.

In other gambling arenas, for example, we see gaming in online poker. Online, players are able to multi-table online poker games, which they can't do in a casino. Enterprising coders have developed the HUD (head up display) for online poker so that a player can look at a realtime database of the players they are playing against, with notes and statistics so that opponents can be played against with the optimal strategy.

Messaging software allows online poker players to collude, which is not possible in a live game. Artificial intelligence has created poker bots that play heads-up (one on one) poker at a high level to almost guarantee a win against unaided human players.

Other than the basic rules of the game, online poker is now a different game altogether when compared with the live version of the game, requiring a new skill set with which to profit. Some might call it 'gaming the system', the lazy might call it cheating. I prefer to say that the better equipped will always win in the long run.

Are there other methods of gaming Betfair? Being a middleman​, offering a service, is a way to game Betfair. Disreputable tipster services act as an addition to any commission paid by traders. Some tipster services operate by simply covering every eventuality in an event and using survivorship bias to sell fake tips to the unwary.

Any service or information offered to traders has to be evaluated for its effectiveness and the cost of that service or information deducted from trading fees - as commission would be - to determine value.

Another way of gaming a betting market is through the use of "fake news" in order to create a movement in the spread so that a stat arb can be employed before the spread is corrected, once the true facts are known. Recently, Megarain reported false information being given about a cricket match, which might have affected the odds long enough for a stat arb.

Match fixing and insider information also permit people to game the markets with superior knowledge. Curiously, insider information is not always frowned upon as it is in the financial markets. Such activity has always been part and parcel of horse racing. Fixing though is generally reviled because it affects television ratings and thus advertising.

In conclusion, yes gaming the system is more than feasible and all part of thinking outside the box in order to gain an edge in whichever gambling activity you pursue.

"Not for ordinary punter"

And so started the review of my second book, Betfair Trading Techniques, on Amazon. That truism was then followed by just two more sentences. "More about programming and APIs. Sorry I didn't like it."

I'm sorry too that the person who had bought my book left the review "Not for ordinary punter". Obviously, they had not understood what they had read in the book. Yes, there is programming. You won't get far in algo-trading if you cannot program. There was not much mention of APIs as that is covered in my first book, Programming for Betfair.

What was the reader expecting? Some simple trading systems you can scrape off a third-party trading software blog or a video? Simple trading systems are easy to find and therefore have no edge. If you cannot understand that fact then you have no chance as a trader.

Betfair Trading Techniques is a survey of most techniques from beginner to the intermediate level. I have left advanced trading for future publications. What  programming there is in the book is used to help the reader gain a deeper understanding of risk, reward and variance. There is also some programming for machine learning, which acts as an introduction to evolutionary computation and it's uses for sports trading.

To say that the book is mostly about programming suggests that the majority of the book was not understood by the reviewer. Yes, the ordinary punter won't find much of interest in Betfair Trading Techniques because the book is not aimed at mere punters. Certainly, I don't demonstrate the usual simplistic strategies that you will find in the ebooks you can buy unreviewed on author's websites.

As explained on this website, time and time again, the majority of exchange users lose money. Most exchange users have no understanding of markets and use naïve methods, which ultimately fail. By reading Betfair Trading Techniques you will at least lose less and, with the hard work that is required, you might turn a profit.

It's up to the reader to put in the effort and gain the necessary understanding. There are no free lunches. Yes, ordinary punters won't benefit from this book but who wants to be ordinary when you really need to be exceptional.

A Tale of Two Losers

Recently, I saw two gambling movies. The first was Owning Mahowny, which was recommended to me by "Boris" (not the soon to be future leader of the Free World) after he read my previous article on gambling movies I wrote a few years ago. The other movie was Mississippi Grind. Both movies are about gambling losers though the movies couldn't be any more different as they are a contrast of reality and Hollywood. 

Owning Mahowny is based on the true story of Brian Molony, a Toronto bank official, who had an addiction to gambling. In the movie it is safe to say that Mahowny's skill at gambling is non-existent, often placing blanket bets on future race cards and the week's basketball games with no selection method apparent.

Mahowny also makes regular trips to the casinos of Las Vegas and Atlantic City. As to be expected, Mahowny gets into debt and to pay off his bookmaker Mahowny, and fund the casino trips, he embezzles money from his bank. The Canadian police are already investigating Mahowny's bookmaker and only by accident do they discover the embezzling. The movie is rather humdrum and there is nothing to endear the viewer to Mahowny. We see Mahowny trapped in an endless cycle of addiction with no enjoyment of his gambling activities.

Contrast Mahowny to Gerry, the loser in Mississippi Grind. Gerry is a real-estate salesman. His habit has cost him his marriage and he spends evenings playing poker in order to pay off his debts (which appear to be divorce and work related). Gerry meets Curtis a brash younger gambler who helps Gerry make a few winning bets before the two decide to go on a gambling road trip.

I won't go into any depth as the movie is a lot more interesting than Owning Mahowny and worth a view. No doubt this is due to the movie being fiction rather than reality where a down on his heels Gerry is raised out of the gutter by luck and willpower. Something that is unlikely to happen to real gambling addicts such as Brian Molony. It is unfortunate that the more realistic movie is the least watchable of the two.

Gambling Movies

Previously, I posted an article about my favourite finance related movies. This time I present my favourite gambling movies. Most gambling related movies are based around con artists and very few about the daily grind of professional gambling although this list has a few exceptions. It is understandable that the daily grind doesn't make for a good plot. A con trick plus a few dead bodies will always grab Hollywood's attention.

The list is not complete, as it is just a list of those films that I have watched and enjoyed over the years. I have left out a few that I didn't like, so much so that I can't remember their names and I am disinclined to look them up. I won't go too deep into storylines so that I don't spoil the movies if you haven't seen any of them before.

As with the finance movies I recommend, I do so for their cinematic qualities rather than as some form of inspiration. Are any of these films inspirational? No. In fact, I would hope not, seeing as most of them centre around breaking the law or destroying one's life. Yes, it is good to occasionally put one over the corporations but in today's corporate-centric world that is against the law. With one or two exceptions all of the movies show, to various degrees, profit through cheating.

House of Games

If you like con movies then House Of Games consists of one con trick after another. One of the co-stars is Ricky Jay an accomplished magician and consultant for the movie so the scams and tricks are all legitimate tools of the trade.

John Mategna and Lindsay Crouse in House of Games

In the film a psychiatrist, Margaret Ford (Lindsay Crouse) gets caught up amongst a group of con artists led by Mike (Joe Mategna) that can only end with something unpleasant happening. The movie is full of twists and turns so I won't give any more away.

I saw this film a few years before my first visit to a casino so I imagined all kinds of shenanigans when I finally walked through the doors of the Regency in London. At least it kept me on my toes and yes I did see a fair amount of cheats and tricksters* so House of Games was of value as well as being entertaining.

*Splashing the pot, out of turn, with less than the value of a call, apologising and then taking out the full value of the call was one trick. This allowed the perpetrator to top up his blinds during lean rounds. A semi-unethical activity was the questionable "buying a piece of each other" that was common amongst players. Would you try to bust someone out of a tournament if you had a share of their winnings? Likewise would someone unload their chips on you if they had?

Hard Eight (aka Sydney)

A film that does delve a little into the daily grind of a gambler is Hard Eight. In it we see John (John C. Riley) who is down on his luck and in need of money to bury his deceased mother. We see John as he is befriended by a stranger named Sydney (Philip Barker Hall) of whom John is initially suspicious as to why a stranger should offer any help at all.

Sydney takes John back to Las Vegas - where he has lost all of this money - and shows him a few comping tricks, which makes a casino believe that you are a high-roller. Comping is the act of giving complimentaries by a casino if it feels that the receiver of a comp has a lot of money to spend and anything the casino gives for nothing will be more than compensated for by the losses of the person receiving the comp.

 Philip Barker Hall and John C. Riley in Hard Eight

In the movie we see Sydney showing John how to turnover his money rapidly through slot machines with little loss so as to demonstrate through his comp card (rather like the store cards you get from UK supermarkets) that he spends a lot of money and soon enough John finds himself in a casino hotel room for little to no rent.

A period of time later we see that John is now firmly established as a professional gambler in Reno. Without spoiling the plot John and his prostitute girlfriend played by Gwyneth Paltrow get into trouble requiring Sydney to get them out of their predicament. There is a final twist in the tale, which tells us why Sydney has been so helpful to John.

Hard Eight is unrealistic in that if comping your way through life in Nevada is that easy then anyone can do it and the casinos would certainly put a stop to that. John and Sydney are probably the lucky few and we must not get caught out by survivorship bias. However, the film has a good storyline with a little in it for everyone.

Leaving Las Vegas

What man doesn't want to blow it all in Las Vegas whilst meeting a beautiful prostitute who falls in love with him? If your wife is looking over your shoulder then you might want to scroll to the next movie in a nonchalant, not interested sort of way.

Leaving Las Vegas is not really a gambling film although we do see the main protagonist played by Nicholas Cage playing black jack in a Las Vegas casino. The film centres around Ben Sanderson (Nicholas Cage) and his alcoholism, which has cost him his career as a Hollywood scriptwriter, his family and his friends.

Nicholas Cage and Elisabeth Shue in Leaving Las Vegas

Ben burns his possessions, fills his car with bottles of alcohol and heads to Las Vegas where he happens upon Sera, a prostitute played by the stunning Elisabeth Shue. The two fall in love and have an agreement not to judge each other's chosen lifestyles, although the slow death of Ben is hard for Sera to accept. Another salutary tale from Sin City.

The Hustler

I'm rather partial to a game of pool, preferring American versions of the game on full-size 9 or 10 feet tables, rather than UK pool on 6 feet tables, which is rather a Mickey Mouse game. A movie which takes us away from the more usual gambling venues and into pool halls where pool players bet against each other is The Hustler, which shows "Fast" Eddie Felson (Paul Newman) in a high-stakes battle against "Minnesota Fats" (Jackie Gleason).

 Jackie Gleason and Paul Newman in The Hustler

Although Rudolf Wanderone swears that the Minnesota Fats character was based on himself, even going to the extent of changing his name, the author of the book on which the movie is based denies it. Still, if you watch old games on YouTube from the 1970s played by the likes of Willie Mosconi (the consultant on The Hustler), Wanderone et al there is just as much talking a good game as Felson and Fats in the The Hustler.

The Color of Money 

A sequel to The Hustler made some 25 years after the original, The Color Of Money shows Paul Newman reprise his role as "Fast" Eddie. In it we see a retired Eddie take under his wing Vincent, a young pool player, as a protogé. Not as satisfying as The Huster, Cruise's character (and quite possibly the actor himself) is a bit too showy. The two leads, along with Vincent's girlfriend travel to Atlantic City for a pool tournament whilst hustling games along the way.

Tom Cruise and Paul Newman in The Color of Money

The Grifters

Another scam movie, using gambling as a conduit is The Grifters. In the film we see a mother (a bookie's runner, played by Anjelica Huston) and her son (a con artist, played by John Cusack) team up, along with the son's girlfriend (Annette Bening) to perform a series of gambling and financial con tricks. Where there is money you will always find con artists trying to lever it out of people's hands.

Anjelica Huston, John Cusack and Annette Bening in The Grifters

Rounders

A popular movie amongst poker players is Rounders, which depicts a young man by the name of Mike (Matt Damon) attempting to earn a living from poker rather than concentrating on his law studies. The film was made in 1998 and presages the rise of online poker so it was very much in the minds of most early adopters of the virtual game.

John Malkovic and Matt Damon in Rounders

Mike is cleaned out by a Russian poker player called Teddy KGB (John Malkovic), who runs an illegal cardroom. The movie centres around Mike's hustling games, along with his friend Lester (Edward Norton) to build a new bankroll for a rematch against his Russian nemesis. The popularity of the film amongst poker players is evidenced by the number of online players who use the name Teddy KGB (or a variation thereof) for their online avatar.

The Sting

A classic con movie, The Sting is set during the 1930s. For those youngsters who have read Kelly's A New Interpretation of Information Rate (Kelly Criterion) but don't understand what "a wire" is then this movie will demonstrate it. 

Robert Shaw, Robert Redford and Paul Newman in The Sting

The plot consists of grifters, Henry and Johnny (Paul Newman and Robert Redford) setting up a fake bookmaker's shop to con gangster Doyle (Robert Shaw) out of a large bet. As with Kelly's analogy the wire is delayed (other analogies have an intermittent fault) and Doyle is to be told the winner of the race before it is relayed to the bookmaker's office so that he has a guaranteed win. Doyle places everything he has on the winning horse (he has 100% information) but still he doesn't win as the con has a twist in its tail.

The Cincinnati Kid

Another poker movie is The Cincinnati Kid. The film was made in the 1960s and has a different feel to other films from a few decades later. Slower paced with a more general storyline, rather than constant gambling action, as the film leads up to a heads-up game between "The Kid", played by Steve McQueen, an up and coming poker player, against "The Man" an old master of the game, played by Edward G. Robinson.

Steve McQueen in The Cincinatti Kid

Croupier

The only movie in my list made in the UK is Croupier. Like many of the other movies in this list it is scam based in which a croupier (played by Clive Owen) has a relationship with a lady visitor to the casino who asks him to act as an insider for a robbery attempt on the casino.

Clive Owen in Croupier

For anyone who has been to a casino in the UK they will recognise the strict atmosphere depicted by the film, where patrons go to gamble in a rather austere building and employees are watched like hawks and not permitted to have relationships with patrons nor with fellow employees. No doubt there are similar restrictions in other countries but as far as British casinos are concerned the one depicted in Croupier reminds me of the one I habituated when I worked in The City.

I like Croupier a lot, being in the mould of Hard Eight (see movie above), the storyline is not overly fantastical and contains a large degree of the workings of casinos and the lives that centre around them.

Hopefully, you have enjoyed my list of gambling movies and if you have seen other gambling related movies that you wish to recommend then do add them to the comments section below.

See Also

A Tale of Two Losers - two more gambling movies

When Does a Beginner Become a Mug Punter?

We are all learners - the process never ends - but some traders never progress beyond the beginner level, destined never to achieve their expectations or worse, lose a lot of money. Surely from reading posts on the forums all you have to do is "stick with it" or "sign up for the latest course" and all will be well.

For most losing traders, neither option works and just adds to the money already lost. Subscription services would prefer that beginners never stop attempting to become a successful trader, regardless of their ability, for fear of losing them from their income stream.

My previous article, "Too old to trade?",  attracted the following comment from P T,

Quite a sad tale that, James, and not too dissimilar to my own predicament. However, my question is not about age, but more aimed at when should one just give up? Having spent 3 years and seemingly every waking hour working on 'sports trading' (mainly pre-race horses with a dash of football), I've got to the point where something has to give. I bought all the 'guides', studied the youtube videos endlessly, devoured every trading blog and tweet from the 'pros' and it's all been a colossal waste of (precious) time. Having give so much it's hard to just walk away but I find myself becoming increasingly cynical and bitter. The likes of Webb and Caan used to inspire me, but now just immensely irritate me. They'll refer to punters as 'mugs'- like trading is far superior - but in reality, losing pre-race traders like myself are the ultimate mugs as we fund their lifestyles. I'd rather lose to a bookie. Anyway, sorry for the rant! The question is: How long is too long? Great blog btw - best out there.

Yes, it is hard to walk away from a losing investment but walk away you must. Would you leave your money in a bank account if it offered you no interest but entered your name into a regular prize money draw. The Halifax began to do that and I immediately closed my accounts with them. My premium bonds too have been sold off and the money is performing six times better in peer to peer savings accounts.

You have to look at your money objectively and if it is not performing for you then you must move the money elsewhere. Preferably not into the bank accounts of sales and marketing men who have latched on to sports trading as a way of marketing an unattainable lifestyle.

Some traders progress beyond the beginner stage but when should a beginner decide that sports trading is beyond their abilities and should stop before they lose too much money, and maybe their friends and family? This is a difficult question to answer because everyone has different circumstances.

There are those who have disposable income and sports trading is as good as burning dead leaves in their mouth or knocking back bottles of ethanol. Others might go into sports trading because they enjoy the challenge of predicting future results. Then there are those with little income, the unemployed and students, who are lured into sports trading out of desperation for cash.

I would not recommend sports trading to anyone who can't afford to lose. That would immediately preclude the unemployed and students desperate to top-up their loans. I have seen advertising for matched betting (bonus arbitrage) directed towards the unemployed and students as a way of easing their financial difficulties. Matched betting is not risk free and many who try it get sucked into proper trading (where there is inherent risk) and lose money made from matched betting and more. Easy come, easy go.

For those, like myself, who have added sports trading to their portfolio of investments they should (as with any investment) drop it, if it underperforms. If you have two stocks and one is earning whilst the other is chewing up your profits then the loss making stock has to go. The same with sports trading, if it is a drawdown on your portfolio then out it goes.

Then there are those for whom money is no object. They are, I would imagine, the kind of people I once saw when I played poker in London's Regency casino during the late 1990s. Often they were business owners (and the occasional celebrity) with money to burn. After a few spins of the roulette wheel (a sure sign of money to burn) they would sign up for that night's poker tournament. These high-rollers would gamble every hand during the buy-in period, leaving the rocks high-stacked at the end of the buy-in period before the knockout part of the tournament began. For them money was no object but they were shrewd enough never to bet their businesses. Slowly come, slowly go.

Which of the the above are you? How much money is a lot and how much is too much to lose?

In trading forums you might see a beginner asking for help because they have been constantly losing money. Others on the forum console the loser, urging them to carry on. Is that a good thing? If that person will always lose are they being condemned by the other forum users? I can imagine other addictions in which the addict's peers urge them to stick with it. Worse than mere insolvency awaits such people.

The reason why people in forums tell others to stick with it is a kind of herding instinct. A forum is a special kind of club and such clubs often exhibit group think. People are on a betting forum because they have a common purpose, to make money. They think as one and a hit on one is a hit on all. None of the forum members wants to be a loser and seeing someone else do exactly that goes against their belief that anyone can win. They have to deny that people lose money from betting or trading and so they urge the loser to continue in the hope they will turn things around, as they would if in the same circumstances.

A wealthy businessman who visits the casino every weekend to throw away a few thousand pounds at the roulette wheel can afford to do so. He is still a mug punter because he will never have an edge over the casino but he will always have money to throw away unlike others who might watch him "living the life". Would you play roulette just because a high roller has money to burn? And yet people with no sports trading ability try to ape those who they believe are sports trading winners. There is always the chance that the people the beginner is trying to emulate are losers too.

You have to honest with yourself in these circumstances. Is the money lost disposable or should it have been spent on something more important or maybe it should have been saved? Someone on a forum telling you to have another go is no different to meeting a stranger who tells you to, "Try some of this." They have their interest in mind not yours.

If you can afford the losses and don't mind losing all of the time then it's a hobby. However, if you cannot afford the losses, you get angry and frustrated at your inability to make any long-term profit, and you want to give it up then it's an addiction.

It is difficult to say what a beginner should risk to start with because everyone has different amounts of capital. Some beginners might be willing to put up so many hundreds of pounds but as soon as the bankroll takes a few hits they become protective of the remaining bankroll such that they cannot trade effectively. Such traders jump out of trades too early, taking a small loss when staying in the trade might have meant a winning trade or they stay in the trade too long and guarantee a loss rather than taking an early profit.

That is why I advocate algorithmic-trading. Only by using systems that can be tested and proven to work that are then handed over to a bot, which performs optimised money management techniques to do the rest. The algo-trader concentrates on finding edge and the maths does the rest. There is no room for psychological flaws.

Everyone has the right to do with their money as they please. However, a lot of people regret some of the things they did with their money. For me it was being a consumption whore in the 1990s. Luckily I came to my senses and could sell all my junk on eBay. You can't get your money back when you've lost it to someone on the other side of the spread.

If you ask the question "Should I give up?" to someone who needs your monthly subscription fee or income from marketing sports trading then of course you are going to be told to keep plugging away, anyone can win and that the only problem is you, holding yourself back. If you carry on trading with losing techniques that have no edge then that is holding you back too. Jump out of the rut before it takes you somewhere where you don't want to be.

How do you avoid becoming a mug punter?

• Through the realisation that sports trading is not as easy as others might have you believe.

• That to be successful you have to devote a significant amount of time to learning the mathematics of trading; probabilities, edge, money management, how markets work, how winning systems are built, tested and implemented etc. Most fail to do so.

• That trading is a race in itself and you will need the best equipment to act upon trades before others. In some kinds of trading (in-play) you can only gain an edge by being at the event.

• That if the three rules above are too hard to achieve then you must immediately stop and find something else with which to fill your spare time.

• Taking a break to re-educate yourself is fine but remember, time heals wounds but not bankrolls. If you come back and carry on as before then you will lose again.

Too old to trade?

When a commenter leaves an email address at the end of their comment it usually means they want to have a conversation through email. In that case I prevent the comment from being published so that the email address is not shown on my website but I do answer the commenter with an email. Anyone is welcome to leave their email address and I will answer them as soon as I can.

This particular commenter wanted some advice on trading and as I think the advice would be useful to others I will show a summary of the question and my answer with additional comments whilst withholding the questioner's details.

The poster asked

I'm just turned 60 and have been banging my head against the very expensive trading wall for over 2 years now. I'm at the stage where I don't know who to trust (sad to say, present company included!). But, as they say, 'You have to trust someone!'.

I have two beliefs in life. 1/ If it sounds too good to be true it most likely is. and 2/ If you've found the answer to life, the universe and untold riches - why would you want to tell me?!

At my age, I don't have the time left to put in 20 years of research and data collection to build my future. I don't want to retire and live a multi-million pound lifestyle, but I am keen to try to earn a decent living for myself and my partner in the the time I have left!

With the above in mind, I'd really value your opinion as to the best way to begin/restart my trading, in order to perhaps make that possible?

I don't want an AtoZ of how to trade, just a couple of pointers in the right direction would be great and most welcome.

How was I to answer such a question, point them in the direction of my books and leave it at that? I wonder what the software/course vendors would have said? "Try using a larger typeface with my software", "Try my video pack with subtitles for the hard of hearing" or "Try a silver surfers trading course with tea and biscuits and a free ear trumpet for all delegates!"

My answer made no reference to my books. Instead, I was brutally honest. "Stop trading immediately," I wrote. If you haven't the time or patience to learn how to trade properly then you will probably end up trying to take short-cuts that don't exist and lose more money.

In summary my answer is to avoid taking excessive risk as retirement approaches. I am over fifty years of age and my risk profile has changed over the years. From aggressive derivatives trading and poker playing in my twenties and early thirties to today's more sedate level of investment, including peer to peer lending and a decreased level of trading based solely on algo-trading where any human frailties are avoided.

When you are young you can take on more risk because you have time to make mistakes and correct them. And I made plenty of mistakes at an early age. Lose all your money at the age of 60 and it is unlikely that you are going to get it all back. That is why the amount of risk I take on today has decreased and the resultant return is less than it once was.

It must be depressing for anyone seeing bank interest rates at close to zero, knowing that they won't be able to work in a few years time and may only have savings and a state pension to keep them going. But it is a fact of life that most of us will not reach the level of success we would like to attain. We must be satisfied with what life has given us otherwise we run the risk of losing our wealth by gambling it away.

The best way you can make risk free money is to spend less. Saving is the best way of making money. By desiring less and spending less life becomes more affordable and what wealth you have becomes more valuable. You may buy a brand new high-performance car but be unable to run it because the tax, insurance and fuel bill is too much. Buy a secondhand fuel efficient car and you will have money to spare. Better still, do without a car.

If you have children and they have left home then do you really need such a large house? Do you need all that you have accumulated over the years? I downsized about ten years ago and my belongings - with the exception of my car - can comfortably fit into a small bedroom.

Sports markets are becoming ever more efficient due to increased computing power crunching every item of fundamental data such that finding an edge amongst past performance data is very difficult. Large syndicates cover every opportunity where edge may be had, with operatives at sports events relaying truly live data. Can anyone, at any age, keep up with that?

I didn't get into sports trading from the usual entry point, the desire to make money. Originally, I was a computational finance researcher who worked in The City. After redundancy I decided not to allow my knowledge go to waste but to apply it to sports trading with the hope of educating others of the pitfalls.

There are no "few pointers" when it comes to trading, just a lot of maths, a lot of data and a lot of time spent using the one to investigate the other. Add a lot of lateral thinking and thinking out of the box and you might surface again with a few pearls. Then again, you might not. Contrary to what some might say, not everyone is going to make money from trading and most don't.

Nobody is too old to trade so long as they still have their faculties. In later life, manual trading will get harder as reactions slow down and so it is advisable to turn to algo-trading and permit a computer to make trades on your behalf.

Learning does get harder as you get older. The mind is less plastic and less able to learn new concepts, especially if they are completely knew. I understand the mathematics of markets and trading on them so I can understand new research. Starting from scratch at my age would be a lot harder.

The questioner thanked me for my response and stated that they will continue with sports trading as a hobby. By that I hope they mean they will reduce their outlay such that they are not banging their head against the very expensive trading wall. At an age where retirement is not far off expenses are everything.

Get it Quietly

During the 1990s, whilst playing poker in the now defunct cardroom at London's Regency casino, you would often hear someone calling out, "Get it quietly!" This was always after someone had joyously announced to the room that they had just won a big pot.

Who were these people telling the room of their good fortune? Beginners, that's who, amazed at winning a large pot of chips and imagining that it was only a matter of time before loose cars and fast women would be at their fingertips.

Of course, the majority of these beginners would soon lose their chips to the more experienced players in the room. And so too in sports trading. The web is a vast room where people can boast about their success. Get it quietly!

In general, those who boast about their winnings do so because it is a new experience for them. Those who are accustomed to good fortune tend not to boast about it. The reason being that seasoned winners have worked hard to get where they are and winning is not a novel experience.

Also, winners don't want to draw attention to themselves. In a cardroom, pointing out that you have just won a large pot says two things to the experienced card players. First, you have money to lose. Second, you are obviously a beginner and eventually you are going to lose that money.

In sports trading, there is a population of other traders out there and if you start boasting about your winnings then they will want to know how you did it. If boasting comes easily then you will probably boast about your system, which can then be quickly tested by others. If it is a valid system then you have just arbitraged out its value.

Those that tell you how much they win, generally don't. Usually they are beginners and are fortunate to be on an early winning streak which will be short-lived and will soon mean revert. Such winners won't be around long enough to tell you how they lost it all.

Be wary of those boasting about their lifestyle, often accompanied by photographs of beaches and other exotic locations. We can all think of at least one well-known trader who boasts in that manner. The wealth they boast of actually comes from marketing a perceived lifestyle and not from trading.

There is a lot to be said for being modest in life, quietly accepting all that your hard work yields to you. In finance, investors such as Warren Buffet have relatively modest lifestyles compared to the superstars of Hollywood and sport. Sports trading has many successful but modest people too; Tony Bloom and William Benter, for example. You'd be wise to emulate them rather than the Jordan Belfort's of this world.

See also

How to Read a Sports Trading Website