Betfair Race Trading Strategy: Step By Step Guide For Betting Exchange Success: Part 1

Betfair Race Trading Strategy: Step By Step Guide For Betting Exchange Success: Part 1

What I am going to outline over this series of articles is a method that can be used successfully for trading horses on Betfair.

I guarantee this method works and will make you a profit with minimal financial risk to your overall betting pot. If you stick rigidly to the rules!!

I am going to have to make qualifying statements because if you don’t stick carefully to the rules and instructions, you will lose money over the long term.

My qualifications are as below:

+ 5 years as a traditional horse racing punter (loser overall)
+ 2 years of Betfair punting breaking even.
+ 6 months using my finely tuned trading method (overall profit)

Why am I giving away this information, wont it affect my profits?

I’m sure you’ve seen these sort of statements before on your own research into Betfair.

There are betting systems galore presented on the internet. Everyone claims their system is the only one that works.

Surprisingly, the standard answer to this question for once is actually true, and I will attempt to explain why.

Similarly to the Stock Market trading or scalping on Betfair relies totally on liquidity and volatility or in layman’s terms.CASH and NEWS!!

The more cash flowing through any financial trading system the more bull and bear trends are followed and therefore exaggerated. This in turn leads to trends being more defined and longer lasting and so becoming easier to trade.

With more cash attempting to trade these peaks and troughs bigger bets can be matched and so on and so forth.

These systems are self perpetuating until the bubble created by buyers matching sellers, in other words demand matching supply, bursts!!

And what is the initial trigger for a trend up or down or a sharp change of direction?

Well in the Stock Market there are a variety of different factors, but ultimately the sharp price movements are all triggered by NEWS.

Okay, this news may come from a thousand different sources ie profit warnings, changing fundamantals such as account statements and balance sheets, movements of the related exchange index, all the way down to things as spurious as hurricane warnings, terror attacks and the interest rate.

Trading the Stock Market, it’s extremely difficult for the average punter to follow these sources of news 24/7 and piece them together because they come from so many different angles and by the time you hear about them the market is often already pricing in the news.

You are competing against multi billion pound corporations, banks and pension funds, guys in the city who are paid huge sums to trade this information. Robots and multi-million dollar auto-trading computerized facilities compete for every penny.

Unless you are sitting in a news conference with a laptop and wi-fi you will never beat these markets.

The news can happen at any time of day or night meaning you can wake to find you’ve missed an important piece of news and your Stock has plummeted at opening time.

The reason Betfair is the perfect “trading” medium is due to the massive volatility involved in horse racing, and enough liquidity around the top horses in a race.

A horse race is also a defined entity with prices starting the night before, a race start and a race end i.e. the Stock exists essentially for less than a day. The market is too volatile and unpredictable for the big players. It is a collection of small players like yourself pitting their wits against each other and the system.

The racing prices given early in the day reflect purely a historical paper-based assessment of a horses chances as viewed by the bookmaker, but as the day wears on “news” begins to move prices rapidly, and as the horses start “going down” the action really takes off.

Prices at 10/1 in the morning can be 5/1 or 20/1 by the time the horses are entering the stalls.

This is where the experienced confident trader can really scalp the market and make guaranteed profits depending on their expertise.

Before you get carried away with this information, beware!

The real challenge in horse trading is as always the crucial missing link in the chain that other so-called “experts” always forget to tell you.

“knowing” which race and which horse price are going to move to a significant enough degree to cover the market spread and so allow you to trade.

Steaming is the movement of horse prices downward. Drifting is the reverse. Movement of horse prices upwards.

It is possible to trade in both directions. Most professional traders however look for steamers as this is where you will get the greatest liquidity due to lack of backers on horses which are drifting for obvious reasons.

This is where most trading “advisors” and book writers and manuals leave you. Like most promises of wealth and success on the internet, there’s hype more hype a little bit of advertising and then a tiny nugget of an idea at the end which has cost you £200.

Later I will be showing you exactly how I go about looking for steamers that I can get on early enough to guarantee a worthwhile profit for my efforts.

As you learn and refine your own trading style and expertise you will get a feel of your own for steamers. Everything else is academic and can be taught, the art of finding a steamer and timing your trades is just something you develop and learn by practice.

Innovate, experiment, and learn by doing. Take the pain of losing bets and always ruminate, cogitate and digest the information as to what went wrong and why.

This is the only way you will learn to identify steamers and trade them effectively.

FACT: The more people using these and any other methods and systems on Betfair the better for everyone.

For every punter that I teach to win, there will be a hundred others who will be using this and/or other systems.

90% of people attempting to learn and follow a system will ignore a lot of the rules and caveats, or won’t be as good or determined as the top 10%.

Therefore they will lose their money, which then in turn becomes available for you to win!!

Let us get one thing straight about Betfair:

When you begin to win then the money you will receive is being taken from losing punters.

Betfair is just a MEDIUM, hence the phrase “EXCHANGE” that matches your money directly with money from another punter or punters with an opposing view about an event.

If you are backing an “event” to win then the money you are wagering is matched against another who is “laying” the event to lose.

To really understand Betfair trading we need to understand the benefits of liquidity and volatility to experienced traders, and to do this we will use an example of liquidity and volatility in action in the Stock Market.

In my next article I will be looking at a recent FTSE 100 Stock situation to demonstrate a perfect example of volatility and liquidity in the Stock Market and how professional traders make easy money by disseminating vital news in advance of the market.

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