Then come the trading professionals. Day traders try to make a quick hit by snipping a few points on each tick of the market.
Intuitional traders with highly sophisticated computer assisted models cull data with many years of trading history.

Lower on the scale are the Semi-professional traders who make their decisions on limited information… and finally the recreational Mom and Pop traders who buy and sell on impulse, without any real data. It all makes up one giant pot that we call a “market”. The conclusion is an agreeable price, where half the people desire to buy and the others consent to sell.

In Racing we have the same groups. Like the farmers in the Orange Juice example we have owners, trainers, jockeys, and exercise riders who all have opinions. The bookmakers and professional punters use their handicapping skills to stay ahead of the game. Racing also has their recreational players, who bet favourite colors, horse names, jockeys, and maybe even horoscopes.

The Future is Now...

The impending future of racing comes in the form of "Super Computer Professionals." With scary names like “super”, it makes us sound snobbish. But in essence, we are just handicappers trying to exploit the publics’ opinion on each contest using computers to judge each horse on 120 different characteristics. We look at attributes like early speed, late speed, whether a horse was bumped, slow to break, final finish etc. Numerical grades are assigned to each horse to predict the odds of winning or losing.

Our computers adjust the probability of winning in sophisticated models. If some outcome happens a few times, we disregard it. We need thousands of results to consider anything statistically important. The odds or stock market prices are made up by thousands of different opinions. “The best handicapper is always the final price or odds that are made up by different opinions.” Our job is to look for the advantage that gives us a positive mathematical expectation.

For example, a horse is going to post at odds of 10 to 1(11.0 Betfair). Our computer program gives this same horse a 10% probability of winning or .10 as represented in decimals. This means that our horse would win 10 out of every 100 races run in simulation. To compare these odds we would take the Track odds of 10.0 and multiply that by .10 our computer expectation, and come up with an answer of 1.00. This means that our number and the publics’ opinion are dead even.

If the same horse was going off at 15 to 1 or (16.0 Betfair) and our computer still gives him at 10% chance of success, this gives us a positive expectation. The equation is 15 X .10 = 1.50. This gives us a 50% edge. So if we bet this horse 100 times at £10 per race he would win 10 times paying us £1,500. (£10 x £15 = £1,500). We of course lose 90 races at £10 per race for a loss of £900. Now we subtract our £1,500 winnings, minus our -£900 loss, we come up with a profit of £600.

The math is the same when we are laying horses. The final odds are 7 to 1, our computer still gives us a 10% chance of winning, so the equation is .07 x .10 = .70. This gives us a 30% advantage on laying this horse.

In the U.K. and Irish racing markets, we prefer on laying horses. When you back a horse, everything must go your way. Breaking from the gate, the pace, racing luck, the ride by the jockey… everything needs to go your favor to be successful. When you lay a horse… You have the other 10 to 20 horses in the race, running for you. You don’t need to be perfect as you do when Backing a horse.

Our Daily Routine...

Each night we download the results from the previous days card and add the files to the database. The entries for the next day are added and the program calculates the data. There is no subjectivity in our ratings…In other words no human emotion.

I am of the belief that human emotion is the biggest downfall of most handicappers. Handicappers give too much credit to recent performance. If a horse runs a good race, they give him too much credit… If he runs poorly, he is quickly dismissed.

How many times have you watched a race, picked up your racing paper to see what you missed. And there it was…right in front of you, the answer. But you failed to pick it up. You were caught up in some angle you saw, public opinion, or tips and rumors from your friends. Computers remember all the angles and aren’t influenced by betting action, tips or rumors.

Bookmakers and Betfair merely act as brokers, they have not vested interest in the outcome of a race. My opponent is not Betfair but the player on the other side of the odds. I realized a long time ago, that by just reading the racing paper each morning for a few minutes, I have an indisputable edge over most players. But, with the use of complex computer software… the competition can be crushed.

To be a winner you need to be a “Grinder”. We know that we will show a profit over 200 plays. During this period will have wins and losses, but come out with a 18% to 30% return. By compounding my bankroll every 30 to 50 decisions, and only risking 5% on any race, I am able to invest 2,500% of my bankroll each year. I can turn the same bankroll 25 times per year by simply raising the risk amount every 50 decisions.

The downfall of most handicappers is human emotion. It’s hard on a daily basis to handle losing.

I simply hate losing. That’s why I thrive on laying horses and cashing tickets 88% to 92% of the time. British racing is not set up to be assaulted like Hong Kong racing. Our Asian winnings come mostly from exotic wagers. Thus far there is no lucrative exotic racing market in the U.K.

Punters put too much emphasis on what happened in the last race. For example lets look at results over 20 races.