Apologies for the crappy post-title - and I'm sure this has been covered before - but I couldn't find anything through search that answered my question, so please place a link if the answer is elsewhere.
At any point in managing an open trade, you have to be keeping an eye on the other horses in the line-up (whether they're coming in, going out etc), but which ones do you not have to worry too much about - if at all?
So, example, if I'm attempting to trade a total odds-on favourite, trading at 1.6 and below with 75% of the volume on it, the 2nd favourite has 15% volume and is at 3s and the 10% remainder is spread amongst the other 10 runners who are all at 9++, do I have to really care about the extra 10 runners and what they're doing, or just worry about what the 2nd favourite is doing?
Similarly, if there is no odds on favourite, but the first four are around 3s, with 75% volume spread pretty evenly amongst them (and the remaining 25% is on the other ten runners), and I'm trading the 1st horse, I guess I need to worry about what the other top-3 are doing, but do I need to worry about the rest?
What I'm asking (very clumsily) is which other runners in a lineup can you reasonably not worry about having much of a bearing/influence on the price of the horse you're trading, based on their percentage of volume?
Thanks in advance, it's something that really has me wondering.
Keeping an eye on other runners (but which ones?)
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I think is basically the issue you'd call 'price correlations' i.e. how do they influence one another.
I'm not expert on that specifically though do seem to remember somewhere on here recently someone mentioning they aren't a precise measure (i.e. another horse coming in will not automatically push your selection out), so it's tricky to interpret.
I'm not expert on that specifically though do seem to remember somewhere on here recently someone mentioning they aren't a precise measure (i.e. another horse coming in will not automatically push your selection out), so it's tricky to interpret.
I take the view that every horse in the market can have an impact on your traded selection but it's not practical to watch 20 runners so I focus on the main contenders. That said, I've sometimes seen every horse I have a graph displayed drifting and have to look further down the field to see what's causing it.
I can't remember the exact prices, but a few days ago I saw a massive bomb dropped on the fav (let's say 2.7 to 2.46), and at the same moment the third fav spiked (let's say 6.2 to 7.6) while the 2nd fav, which was at 4.2-4.3, did absolutely nothing. Sometimes the 'contra-movement' might be spread fairly equally across the 2nd-4th favs, while at other times it's the outsiders that take up the slack. Also, if the book's trading at say 102-103% at the time, there might not be any visible effect at all on other runners; the book merely tightens up to 100-101%. It can be a perplexing conundrum.
I've seen several people pick up on this and a few YouTube videos on it. But where most people go wrong is that it's proportional and odds are not.
So if you have something at 2.00 that is steaming it will send out prices, in proportion on the other runners and vice versa. But you tend to find there is an initiator in the market and another runner that is inversely correlated. So you first step is to pick up on a trend and then see which runner is opposing that.
Use this to see what influence any move will have on other prices: -
https://www.youtube.com/watch?v=1oPM-Xgm2XA
So if you have something at 2.00 that is steaming it will send out prices, in proportion on the other runners and vice versa. But you tend to find there is an initiator in the market and another runner that is inversely correlated. So you first step is to pick up on a trend and then see which runner is opposing that.
Use this to see what influence any move will have on other prices: -
https://www.youtube.com/watch?v=1oPM-Xgm2XA
that's potentially why you need to black box those runners into a sub-book (i.e. the main actors coerced into a virtual 100% book). from that, you can then treat them as inter-related pistons...Euler wrote: ↑Thu Jun 20, 2019 2:48 pmI've seen several people pick up on this and a few YouTube videos on it. But where most people go wrong is that it's proportional and odds are not.
So if you have something at 2.00 that is steaming it will send out prices, in proportion on the other runners and vice versa. But you tend to find there is an initiator in the market and another runner that is inversely correlated. So you first step is to pick up on a trend and then see which runner is opposing that.
Use this to see what influence any move will have on other prices: -
https://www.youtube.com/watch?v=1oPM-Xgm2XA
I like to see the front of the market as repelling magnets but a do see Jim’s way of thinking
that's potentially why you need to black box those runners into a sub-book (i.e. the main actors coerced into a virtual 100% book). from that, you can then treat them as inter-related pistons...