My sports trading system used to be very profitable when I began trading the odds of horse racing markets in 2004 and remained so for 2 years. That seems a long time back, but I thought of publishing metrics of the system’s performance, since I nowadays keep reading about drawdown, profit factor and ROI figures of systems in stock, futures and forex trading. In my opinion, that would make a nice comparison and show how easy making money in betting exchanges like Betfair had been at that time without the slightest trading background.

Unfortunately I haven’t been methodic enough to keep records for each month of that period. The best winning month is missing (May 2005) and it seems I only have the betting history of 16 out of 24 months. In the past I requested betting histories of a couple of months I had missed and Betfair’s support were kind enough to send me Excel spreadsheets including all the back and lay bets. Since I began writing this post, I contacted Betfair to request for all the betting history between 2004 and 2007 so that I can publish the results combined and make the best of it. Until they get back to me, let’s take a look at some of my trading results.

I began sports trading full-time in October 2004 using a bankroll of EUR2,000, that turned into EUR 5,000 during that month, which led me to withdraw my initial bankroll and keep EUR3,000 in my Betfair account. The following two months until the year’s end, I increased my bankroll by EUR12,000 following the trading system and improving my trading skills as I gained experience. I usually withdrew funds that exceeded the necessary capital (EUR3,000) that the trading system needed, so in December 2004 the ROI reached 227% trading 561 horse racing markets. You’ll notice that the lay bets are more than back bets, since in order to green up after successfully trading the odds, you need to place an extra lay bet. So, I am assuming I did about 3,150 trades during that specific December – some of those back bets are due to races that cost me money and I had to split the loss on all possible outcomes by placing a back bet. Thus, I was making 0.4% per race (EUR12) or 7.5% per day! I keep reading in stock trading forums that successful day traders make 1% of their leveraged trading capital (you have USD20,000 but your buying power is USD80,000), so compared to that my daily ROI at that time was excellent, although I hadn’t the slightest clue!

The first 5-digit profit came two months later in February 2005 (with just 28 days!). By that time I was using a EUR6,000 capital in order to fulfill my system’s requirements, which has been the biggest amount of money I ever used to trade in Betfair. Although I mostly entered twice before I closed a trading position, I needed the extra money to either trade odds of another horse simultaneously, or pick another entry point before cancelling an unmatched bet. The daily ROI was now 6.1% but having doubled the capital that meant bigger profits! As volume of trades and money increased, so did commission but it didn’t concern me. It was obvious I had found an edge without even suffering from drawdown!

March was another record-high month for the system’s performance but then came April which was the first month I made less money than the previous one, dropping to 4-digit figures. The betting history for that month is the one Betfair sent me and it shows that I did 15,000 back/lay bets! That certainly can’t be accurate, unless the Betfair’s spreadsheet calculates the bets differently. I’ll have to wait and see the new spreadsheets I requested for to make safer conclusions. May 2005 was the best month in my sports trading career, winning EUR500 per day!

The summer of 2005 was not that great in terms of profitability in sports trading. I made less money each month till September came and I was right back on track, although still winning 4-digit figures. The turnover exceeded the 5 million euros mark, although ROI had significantly decreased (daily ROI 4%). Drawdown was still not an issue, but I had noticed I was executing way too many trades comparing to how I had started a year ago (40% more!). Maybe being overconfident or eager to return to previous levels of winnings forced me to overtrade, a recipe for disaster.

I kept making steady profits in the following months, never exceeding the EUR10,000 mark again. Worst month ever was March 2006 when I made EUR1,750 while November 2005 had been the month of the biggest turnover (7.5 million euros in 4,700 trades!). The last record of betting history is May 2006 which was also a profitable month. I traded 6.6M euros, made EUR5,800 after commissions and executed 3,000 trades, seriously trying to cut down on overtrading. Yet ROI once again dropped and the first signs of drawdown made their impact on the performance graph.

For a more detailed view of my sports trading system performance I’m afraid we have to wait for Betfair’s response to my request of betting history records. Until then I hope publishing my trading results will help some traders figure out how good or bad they are doing in sports trading, or what to expect in today’s difficult market conditions. I myself have stopped trading the odds of horse racing markets and you may find me nowadays day trading the US stock market or running backtests to find out how my custom indicators would perform in the past!

For those who skipped reading all the above, as a synopsis my sports trading system executed 100-130 trades per day with an average of about 100% monthly ROI for 2 consecutive years.