Thursday, 24 January 2013

Peter Webb Responds!

My previous post which focused on a comment by Peter Webb on his blog, has struck a chord with many people. I've had lots of comments, both here and on Twitter, the latest of which came from the man himself. So I felt it would be of interest to my readers to take a closer look and allow me to respond in greater detail:


"Sorry guys, but you have got the wrong end of the stick. Just because you trade differently to me doesn’t mean either of us are right or wrong, but perhaps you should be asking yourself why I would say something like that? It may give you an insight into how I trade? Sultan, if you live near us you are welcome to pop in for a coffee and some enlightenment."

First of all Peter, thanks for your comments and taking the time to respond. I can't help but find this first paragraph just a little patronising though! I have been trading tennis for 3 years now and although I admit the first 18 months were spent mostly in the dark doing the wrong things, I'm pretty certain that I don't need any 'enlightenment' these days (though I appreciate the offer and may well take you up on that coffee if you can change it to a decaf tea!). That's not to say there is nothing left to learn and improve upon but I consider myself experienced enough to know the differing ways that a tennis market can be traded.  I thought your insight into how you trade was very clear, especially on this particular game. You backed Wawrinka, greened up and then put some of the green on Djokovic. I didn't trade this match but if I had done, that is almost exactly what I would have done too.

There was almost no way you could lose using that strategy on this match (but only because it fit YOUR strategy). At a guess, I would say that this is what you meant by your comments that I picked out. I did illustrate in my original post that it IS still possible to end up red by doing this. This is because it will depend on a) How much green you made when you backed Wawrinka/layed Djokovic b) How much of that green you used to back Djokovic and c) How long you stayed in the market when Djokovic's price went back out and over evens. Maybe that is all a bit pedantic but the whole point of my original post was that you claimed that it was impossible to lose no matter what ANY trader did (you were not talking about yourself specifically) and that simply isn't true.

"I would ask anybody who disagreed with my post to look a little deeper at how you trade. Tennis is a unique sport and you should approach it differently to other sports. Many sports offer the ability to profit, many, many times throughout the event, if you trade; sometimes regardless of your opening position."

Again, a tad patronising Peter! Perhaps some of those people who commented don't understand that you can churn over your profits in order to place risk free bets and trades (or at least lower risk ones), throughout the match but I thought I made it clear in my analysis that I understood this and it is something I do too. But just because you can keep churning over your profits, cutting bad positions and re-entering to nullify reds, it doesn't mean that you are going to make the 'correct' decisions every time. Your reds can get bigger, just as your greens can.

The main problem I had was with the one paragraph where you said:

"This match exhibited perfect trading characteristics again.  It was another match, where if you were trading, you couldn’t lose. If you backed the outsider his price shortened considerably.  If you backed the favourite he won!"  

I'm sure you will acknowledge that this is not true because, as I went to great lengths to prove in my original post, everyone has different entry and exit points, so even if their basic strategy was the same as yours, it doesn't mean they would end in profit. So to say it was 'perfect trading characteristics' and 'you couldn't lose' comes across as though you are trying to make profiting on tennis trading seem simple, no matter what you did. If traders did EXACTLY what you did, they couldn't lose! But most traders will not have done exactly the same. As you say, doesn't make either them or you, right or wrong. But it doesn't change the fact you did say "It was another match, where if you were trading, you couldn’t lose" and it is this line in particular that I think has annoyed a lot of people, especially when you tie it in with the fact that you do have products to sell which would benefit from you making tennis trading seem easy.

"At the end of the day I blog based on personal experience. I know people trying to flog crap post up anything, but each post I make is because I was active on a market and something interesting happened. Interesting enough to think it’s of value enough to talk about it. I did post a nice visualisation for everybody as well BTW."
I always read your blog and appreciate your posts because they are based on your own experience. But every single Grand Slam, I read posts claiming that matches were a "trader's dream" and that you "couldn't lose", not just from yourself I should add. I still stand by the fact that a match is only perfect if it fits your trading style and your comments seem pretty clearly to me to suggest that you should be profiting from matches such as Djokovic-Wawrinka no matter what your trading style.

You say "perhaps you should be asking yourself why I would say something like that?" Well I've been doing exactly that and I still don't really understand why you would say something like that! I've spoken to other, equally experienced traders about your post and they all agree that just because a match swings back and forth, providing lots of opportunities, it doesn't mean we can't end up with huge all-red screens after 4 hours! Maybe it is just your choice of words that is the problem and if that is the case, now is your chance to perhaps explain what you did really mean because it's not just me who is confused.

"I do take comments on the blog, but you are also welcome to visit the forum to chat which is where most of my interaction takes place."

I have often wanted to comment on your posts but have never been able to do so as they've always been closed off (maybe I need to be a member?). If I'd been able to, I would never have written a blog post in the first place! Over to you, Peter :)

Sloane Stephens:


18 comments:

  1. Haven't posted here before, but I do lurk. Bottom line is that you're correct and Peter Webb is wrong. I don't buy his 'there are different approaches to trading nonsense'. You can trade in a game like that, take all the right value at key points, but the variance can be bad and all the points can go the wrong way.

    In fact, in my case, they did and I barely got out with any green. I don't case myself as having traded badly in any way though - it was just a case of there being a lot of variance - something you have to understand when trading tennis and practically every other sport!

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    1. Agreed TT. I still don't fully understand why he said what he said, as he has been very ambiguous in his reply so far.

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  2. Interesting post.

    Have to agree with Sultan here, it does seem like you need to sign up somewhere to post on the Webb blog.

    Regarding greening up, and churning the profit over for less risk. Thats nonsens. The risk/value in the next position has nothing to do with your current position or if you are red and green. The experienced trader looks at each position as a individual event, not connected wiith your current red/green state. I hope you get me right here.

    @Sultan - i think that the idea behind blogs like Webbs and also blogs like STL is to emphasize all the opportunities the sports gives you. By showing all the graphs (usually AFTER the event turned out to be swinging) and talking about how you could easily be green, the inexperienced trader would think this game is easy.
    I am happy though, it provides liquidity for me:-)
    Best regards
    T

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  3. "The risk/value in the next position has nothing to do with your current position or if you are red and green. The experienced trader looks at each position as a individual event, not connected wiith your current red/green state."

    Not sure I entirely agree with you on that. I understand what you are saying, that you shouldn't change what you are doing based on the amount of green or red you have but I think if you are all-green, there is nothing wrong with churning it over in whatever way you feel appropriate. If that means a straight bet, or doing something a little different that is risk-free, then so be it. There's no right or wrong way here.

    Yes, the idea behind those blogs is as you say and that is exactly why I had an issue with the original post. Such comments are misleading to the inexperienced trader, though I suppose you are right, it won't hurt to have a few newbies getting the wrong impression!

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  4. Hi Sultan, i do understand what you are saying, i just dont think is right. Just because your first trade makes you green, does nok mean that your next trade is risk free. There is always a risk, and that risk has no connection to your previous trade or bet. I have build my whole bank from trading, so practically that should make all my future bets risk free, or at least until the bank has gone?

    Take care.
    T

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    1. As I said to Cobo (below), if you had nothing at the start of the match, you haven't lost anything if you have nothing at the end! It's only the way you think about what has occurred that determines whether you've lost anything or not.

      If Peter Webb views the money gained from the Wawrinka back as an opportunity to make a risk-free bet/trade, than it's not for you to say that it isn't risk free. It's down to the individual and how he views his money.

      So yes, any money that you've build up in excess of your bank, can be viewed as 'risk-free'. That doesn't mean you have to use it all on your next trade. It all depends how you view things. There is no right and wrong way if it's profitable!

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  5. Bit off-topic, but I have to agree with tyttetrading there... There is no such thing as risk-free in trading. In the case you explain, it costs you from your actual green figure, but that's a cost. It's ok if you know what you're doing, but the moment you're not judging that new position as value or not, you're gambling.
    As I say, I do it sometimes just for the heck of it if a match has gone well, but that's not to say it is proper trading.
    On the other side of things, psychology also affects us negatively and when the red figure grows it is also difficult to keep up taking positions even if they are good.

    As always, we are not machines, we have feelings, but both those situations aren't proper trading in my view, as you take opportunities or let them pass just by your state of mind. But the reality is, each position is good/bad independent of your green/red.

    Sorry for the OT... Cheers!

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    1. Well that depends on how you look at it! If you had nothing when you started trading a match, then you haven't lost anything if you end it with nothing :) For me, that's a psychological thing and I try not to look at a green position becoming a red one as a negative. Not easy to do!

      You are still trading if you use that green on your next trade, it just depends what you do with it. If you feel there is value in backing a player, doesn't matter what label you put on it, it's still a worthwhile trade.

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  6. In all respect, i think that you are missing the point here. Win or loose does not matter, but it matters a great deal if your entrypoints are affected from your current profit/loss situation. By this i mean that it makes no sense to take positions when you are green, which you would not take if you had been red.
    Thats also sort of what you write in the last sentence:-)

    Best regards
    T

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    1. But no one is saying they are taking different entry points! Peter Webb didn't say that and neither did I! You still should be taking value positions, though it could be argued that if you already have some green, why not use some of it and maybe back who you think will win, regardless of price? It might not be 'proper' trading but if you have a big fancy, why not?

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    2. "You still should be taking value positions, though it could be argued that if you already have some green, why not use some of it and maybe back who you think will win, regardless of price? It might not be 'proper' trading but if you have a big fancy, why not?"

      I have to agree with tyttetrading here.

      You say you should still be taking value positions, then the last 2 line's completely contradict the first 2 line's you wrote, don't they? If you think like that, you will get yourself into bad habit's, 'a big fancy' is just another way of saying 'I'm going to have a punt'.

      If your reading a match and you feel player A will win, you should surely put green on that player when you feel there is value at that specific moment on player A to maximise your potential profit. As tyttetrading said otherwise it's just 'non-value gambling'. You even said 'regardless of price', how can that be correct thinking!!?

      I know that's slightly off-topic from you post, but I thought it was worthy of commenting on :)

      All the best. k

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    3. They don't contradict because the first time, you don't have any green play with. The second trade, you basically can take up a risk-free option. So yes, it's having a punt but only when you feel particularly strongly about something. I wouldn't be backing someone at a really low price (so it's not entirely regardless of price) but if I felt from watching the play, that a player was pretty certain to go on and win, yes, I'd back them but only if I felt it was unlikely I'd be able to get a good value price.

      If it doesn't work out, I can still exit and take a reduced green or just let it run and end up level. Or I can exit when it reaches zero and still probably be able to trade from scratch.

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  7. Seriously, you cant mean that? If its good value, its ok, but otherwise its just non-value gambling. Lets say you lay a dog against a 1,4 fav, and the lay price is like 1,05 (third set, score maybe 4-2 to the dog). If the dog is then broken, and the 1,4 fav holds her/his serve, the price will bounce to lets say 1,6 on the fav. In that position i find that its both ok to let the trade run, to take something out to leave all/biggest green on fav or simply green up. All 3 scenarios is good trading imo.
    But to place a bet just to "use" it makes no sense, to me at least.
    Best regards
    T

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    1. Not 'just to use it', no. But if you have a good reason to use it i.e. you are reading the play and feel the price won't quite hit where you want it to but still feel the player will win, then why not? For the sake of a few ticks, I would do it because you have the buffer of green you've already built up.

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  8. After a significant number of years of trading and blogging I'm sort of resigned to the fact that people will take what they want out of my blog posts, positive and negative. In and out of context.

    In the blog post, I did make it clear that you wouldn't lose if you took the entry point I indicated. I also dropped in nice graph to really show up the characteristics of the match. When I do posts like this I am not looking to mislead people, quite the contrary. I'm saying, "Wow look at this". I'll often post on mens five set matches because they can create such outstanding trading opportunities.

    Over the course of the tournament I've collected tons of data which will allow me to research and refine what I do further. I'd like to post some of it up at some point. I'm pretty sure people will be looking for where the best trading situations occured, rather than how they could have lost money. So that's the context in which I am always likely to post.

    It's fine if you want to disagree with me, I have no problem with that. But it won't change how I trade Tennis. I don't really have the desire to point score, excuse the pun. So I'm just happy to agree to disagree.

    Even after 13 years on Betfair I still learn new things quite often. So I'm always deliberately critical with myself so that I can improve what I do going forward. I'm a firm believer that you should never take anything for granted in this game, even if you are settled in your trading.

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    1. Hi Peter,

      I don't think you did make it clear that you wouldn't lose if you took the entry point you indicated. It doesn't say that anywhere in your original post, all it says is that if you were trading that match, you couldn't lose. This is the sort of thing that bloggers write who are trying to get people to think tennis trading is easy so they will by their products.

      I'm not arguing about your strategy, I was just riled at the fact that you (and other bloggers) keep writing things which can be misleading for new tennis traders.

      I'm not the only one who felt the same way about your post, so it's not just me who 'took it out of context'. You did say exactly what you did but before that, you were just talking generally. The quote is clear, I'm not sure how you can take it out of context:

      "This match exhibited perfect trading characteristics again. It was another match, where if you were trading, you couldn’t lose. If you backed the outsider his price shortened considerably. If you backed the favourite he won!"

      If you were talking about yourself, why do you keep using the word 'you'?

      Anyway I won't go on any more, you've explained yourself and I'll accept what you've said but surely you can see from the above quote, how it can be perceived as though you are making tennis trading seem simple?

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  9. BTW, I was trying to be patronising in my previous comment. I just wanted to offer you the chance to have a first hand discussion. Can't really be fair than that.

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  10. Oops, bad typo. Obviously that was supposed to say, 'I wasn't trying to be patronising'

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