Author Topic: Formula to make a certain profit by trading x ticks?  (Read 1246 times)

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Formula to make a certain profit by trading x ticks?
« on: Wed, 30 July, 2014, 10:44 »
Hi all,

Does anyone know the formula or how I work out how to make a certain profit by trading 10 ticks?

For example, I want to back a selection at odds of 1.8 and then want to trade it at 1.7 but for a profit of £2.50 - so how do I work out how much to back initially at 1.8?

Thanks,

Whitey
Yeah! :p

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Re: Formula to make a certain profit by trading x ticks?
« Reply #1 on: Wed, 30 July, 2014, 23:42 »
something to do with r_ticks(bm_backp,-10) maybe... or something like that. I'll tell you for sure when I'm home tomorrow

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Re: Formula to make a certain profit by trading x ticks?
« Reply #2 on: Thu, 31 July, 2014, 05:48 »
Hi jmbt,

I know that would find the price 10 ticks from the back price i.e. 1.8 - r_ticks(bm_backp,-10) = 1.7 but I need to know how much to back at 1.8 in the first place to then lay a certain amount at 1.7 to make a profit of £2.50.

If it makes it easier to work out, the back price will always be between 1.1 and 2.

Thanks,

Whitey
Yeah! :p

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Re: Formula to make a certain profit by trading x ticks?
« Reply #3 on: Thu, 31 July, 2014, 11:29 »
To win a set amount you need to control a couple of things.
Let's assume your target is 1 unit (dollars, pounds or rupees) and you want to trade out at 1 tick below your back price.

The back price is $3.50. Therefore 1 tick is 0.05.

The first is the initial amount you wager.
target/(1-commission)/b_tick*back_price
1/.95/.05*3.5=73.68

We now know your lay price, 1 tick below the backed price, 3.45

bm_backp/r_ticks(bm_backp,-1)*bm_backa
3.5/3.45*73.68=74.75
You now submit a lay offer of 74.75 @ 3.45
If/When matched you have a arbitrage of +1.07 - commission is about +1.01.

In your example you need to wager 47.37 @ 1.8
Then lay 50.15 @ 1.7, you trade out with +2.78 less .14 = +2.64

You see prices collapse regularly by 10 ticks or more, the tough part is predicting a trend continues or changes direction you need before it happens.

Good luck.




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