Ask Steve Question

I have a question from Chris

“If you were starting from scratch in 2019, what steps would you take
i.e. which sports would you trade, how to identify a good educator and
learning about mindset”

So 3 interesting questions, I’ll address them each in turn.

I think the first question is relatively easy for me. I think you have to trade something you are a) passionate about and b) know a little bit about the sport. I don’t think there is anything worse than spending a huge amount of time learning about something you dislike. When you hit tough times, and you will. It is another excuse to give up. So start off with trading a sport you enjoy.

Second question. How do you identify a good educator?
This is and will be a controversial question and answer. As there will be many opinions. This is only mine.
To start with, find someone who specialises in the sport you want to learn. It would be pointless asking me to teach you about football trading when my speciality is Horse Racing. Or even ask me to teach you In Play Racing. I simply do not do it.

The next part is due diligence. Find out what you can about the person in question. Are they credible? What exactly are they offering? Can they supply you with testimonials or references, From real people, not ones they have made up! Will / can they put you in touch with previous or present customers? What is their reputation like? Do they have a track record? Do they offer any support?
Just a little caveat here. Don’t listen to people who tell you how great they are. Listen to OTHER people telling you how great that person is”
If you were having a big extension built on your house, how would you choose your builder? Same piss, different pot.

There is a mostly negative vibe about Betfair Trading education. There is a good reason for that. Some are not very good! Another reason is learning to win consistently, is bloody hard. The constant bombardment by the “look at me ” merchants do not help. The making it look so easy approach raises expectations and you find that many aspiring traders will rock up, expect to spend a day at a course and expect to be at the same level as the trainer.
Not possible. Am I the only one saying this? If so there are more disingenuous fuckers around that I feared. This is why I encourage and offer long term support. It’s no coincidence that the people who stick at it make more money than the ones that go “around the houses” constantly.

Last question: Learning about mindset.
Mindset, or psychology if you like is a tough one. I believe this to be a specialised field that requires specialised guidance. So it is something I don’t say too much about. Other than to impart the bits I do know about.
There is no doubt that one of the key skills you need is discipline and patience. However, the best way to learn these skills is to understand that if you have a process to follow that works, and you trust that process. All you need to do is follow that. Trust The Process. Then it becomes clear that the controlled losses are part of the cost of doing business. They are factored in. Then they become less important and aids disipline.
What i am saying in a nutshell is. If you gain the knowledge to be able to build a little consistancy into your trading, this mindset side of trading suddenly becomes so much easier. There are many things we can work on that help with mindset. Without making it a stand alone subject. Everything you do has an influence on your state of mind.

So some tough questions there. i hope I have answered them. Please comment if you would like to discuss or disagree any of these points.
I would like to make clear that I will not publish any comments that mention other educators about. My points have been made generally based on my observations. If you have purchased educational material from someone and it has not delivered what you hoiped. Please take that up with them. I will not comment on others products I do not have experience of personally.

thanks to Chris for the questions. Please keep them coming


Ask Steve about Betfair Trading. Overbet Runners

Question from Danny.

“Having recently read the book thinking fast and slow by Daniel Kahneman. I have literally just sat and watched a lot of pre off horse racing markets lately without entering I can’t help think that I see a pattern.
It seems to me that people are just following sheep a lot of the time and just backing for the sake of backing, therefore, horses are completely over backed.
Do you think people back more then they lay so there is an edge in laying over backed horses? I’m sure you can expand on this with your knowledge”.

This is an interesting question from Danny. Sometimes I have a very strong opinion about a certain subject and other times not so much. This is one of the latter. but I am happy to explore this and see if I can help shine some of my experiences on it.

Firstly I wanted to find out a little about the author Daniel Kahneman whom Danny referenced. I have never heard of him, so as always google was my friend. This is what Wikipedia threw up.

Daniel Kahneman is an Israeli-American psychologist and economist notable for his work on the psychology of judgment and decision-making, as well as behavioral economics, for which he was awarded the 2002 Nobel Memorial Prize in Economic Sciences. Wikipedia

What I know for sure is that there are many more backers than layers. Laying is a pretty new concept to the masses. so it will come as no surprise that Backers rule. Most horses drift, not because they are being layed. It’s because no one is backing them. There are some horses that are being actively layed. But they are vastly outnumbered by passive drifters.

Let me explore what Danny asked.
If you convert the Betfair starting price to give an implied chance of winning. So 2 would be 100/2 = 50%. A runner in a market at 2 has a 50% chance of winning. The LONG TERM accuracy of this on Betfair is around 99.8%. So if we take the assumption that 50% @ 2.0 win. Then 50% will lose. Where this becomes interesting and will fry your brain. Is what if the percentage is skewed by overbet horses. Runners, that have no right to be a 50% chance as their true odds is 66%? But have been overbet. Or is that accounted for already within the stats? What about front runners? The trend nowadays is for them to attract money based on their running style. It has nothing to do with the chances of actually winning. just the way the run and travel in a race.

I did read something a few years back that backing horses that drifted badly were more profitable than backing steamers. based on bigger odds I guess.

There is a plethora of ifs and buts within this, its fascinating and as Danny suggests may be an angle in it. I am more inclined to think that the in play market has a bigger influence on prices than many realise, and that may be a good place to start. but with something else to consider.

The running style of a horse is sometimes critical to its chances of winning. There are animals that HAVE to lead. If they don’t get an uncontested lead, they sulk and run badly. Does the collective market take this into account when deciding the odds it will start at? You see these uneasy in the market, but then as the race unfolds, and the horses gets his lead, the odds drop more than they should by rights. Is it because the market had to see if the horse got his lead before it was prepared to get the runner to its true odds in play?

The big question is. How do you know if something is overbet or being supported quite rightly into its correct chance of winning?

Over the years I have seen many huge gambles win and seen them lose. I think that this is a topic that is not cut and dried and needs much more study before deciding if it as a viable strategy.

I’d like to thank Danny for his question, I have answered it the best I can. But I would love to hear other thoughts on this. Please comment. We can continue to explore this together