More Than One Way To Skin A Cat

Ever since I started this lark after a failed gambling career I've always been amused by the notion that trading is not gambling. Absolute nonsense in my opinion, but it seems that some traders (good and bad, experienced and newbie) are convinced otherwise. Questioned on their gambling habits sparks an almost zealous denial and objections to the accusation. Trawl through the plethora of forums and blogs and you'll get the jist of what I mean.

Mind you, some gamblers (or non-traders if you will) can be equally vociferous in there position, especially when it comes to the subject of trading. Simply nip over to the Betfair forums for a taste of some of the hatred directed towards the 'parasitic' traders.

Me? I don't put myself in any camp as such. I'm a gambler, pure and simple but I employ ALL the techniques I can to make a profit. I leave positions open if I am confident of a successful outcome. I hedge out to secure a profit (or a loss) if I'm not. I don't make any fundamental distinction between the two. At the end of the day, I'm trying to make money on Betfair - as I presume we all are. Whether I trade out pre-event, take something in-play or let it run to its conclusion is all based on my assessment of the market, and it's potential outcome as well as stats, form and a host of other things. There's more than one way to skin a cat.

It's all gambling, irrespective of the methodology or any fancy name we want to hide it behind. Those who think otherwise are deluding themselves in my opinion.

When I was a 'conventional' gambler, I was a neither a loser or a winner. Over the long term I was more or less even (probably slightly less than more). This was more to do with very bad money management than poor selections. This changed when I tried 'trading' with a starting bank of £10. The discipline instilled by that process has now fed back into more 'traditional' methods.

I now find myself spending more time developing systems - something I really enjoyed in my past life. Indeed, I got more enjoyment from the number crunching than the actual betting. In particular, I'm attracted by the idea of automated systems so that, assuming they are profitable long term, can be left to get on with it while I do other things. I now have the long term goal of developing a portfolio of systems that can be, ultimately, automated. This is taking me longer than I'd like, simply because I'm not the World's greatest programmer.

I'm currently working on two systems - a lay system which I've mentioned on here before as well as a dutching system which is showing great promise, as you can see from the graph below.

I'm not going to go into any great detail regarding these systems. I merely present their graphs here to illustrate my point regarding a cat's skin.

The Lay System - This graph is based on a standard lay stake size of £100. The lay system has been on the go since 25th May 2010. I spent the first six months or so paper testing it before committing real cash. At the moment, I'm using £20 stakes. The ultimate aim is to build my bank up so that it can support stakes of at least £50, though ideally, £100 would be jolly nice - particulary if it continues to perform in the same way as it has done this past year.

The Dutch System - The performance of the dutching system has been so dramatic that I've recently committed real money to it. The graph represents some 35 days worth of dutching covering nearly 300 bets. To go from £0 to nearly £1000 using £10 stakes in such a short space of time is dramatic to say the least. If the performance follows the steady trend illustrated here then I'll be a very happy chappy. More so as scaling things up is a clear option and easily achievable in the Betfair markets.

I have a number of other system ideas waiting in the wings to be investigated including, but not limited to:
1. Hedging course specialists in-running.
2. In-running trading based on what I've seen in the dutching system currently under way.
3. Revisiting the tennis hedging strategy.
4. Dutching/hedging golf markets.

The list goes on and on.

Trading wise, I'm no longer getting involved in the pre-race horse markets. It just never clicked with me. I'm very much of the opinion that one should stick to what works. The lay system, dutching system and the football lay system I briefly mentioned in another post continue to slowly build the bank up as I look into other systems and opportunities as well as explore other markets to trade.

Building up a collection of systems or methodologies is the way for me to go. As long as they are all profitable long term, losing runs in one system will hopefully be covered by winning streaks in the others.

Anyway, there you have it. Trading is gambling, no question. Whether I make money 'trading' or 'punting' is of no concern to me. As long as it is profitable. We should all learn to use whatever tools and methodologies we can to get the skin off the cat.


Josey Wales said...

yes, the same here, I'm also aiming to build (and run) systems which are able to make profit while I'm walking in the woods searching for mushrooms :-) .

I started "working" with betfair about two years ago and I've tried many different ways to skin the cat without success until now.

Currently I've only one system that seems to be slightly profitable in the long run but I'd need many more like it in order to have a enough return.

At least it is funny, isn't it?

PhilipH said...

Hi Ali, nice to see you blogging again!
I'm 100% in agreement that trading IS gambling. Simply has to be, else we'd all be millyunairs as Del boy would say.
I've always admired your analytic style and if there IS a money-making system then you have a good chance of developing one.
The dutching results thus far seem almost in the realms of fantasy. I have no idea about this form of punting other than that one's selections have to be better than average. So it's still a big gamble. Your method of selection has to be the nub of this gamble of course. Will you 'expand' on this dutching system later on, or will it be played very close to your chest? Whatever happens I do wish you the very best in your ongoing endeavours. Cheers, Phil.

Alistair said...

Sorry to disappoint you Phil, but I'm not really blogging again. At least not to the same level I once did. It just takes up far too much time, especially when I'm trying to fit in house renovation, job hunting and all the other chores that life throws up around monitoring horse racing systems. I shall endeavour to do the odd post, but nothing more.

As for the dutch system? It will be kept under lock and key for the moment.

Thanks for the comments chaps.

Pedro Fernandes said...


How does your lay system works?

Can you explain it?

Alistair said...

I'm sorry Pedro, having spent over a year developing the lay system, I will not be giving out any details.

However, I will say that all you need is freely available from Betfair and other horse racing sites.