Trading on Betting Exchanges
Done correctly, trading is arguably the easiest way to take advantage of bookmaker’s odds and secure you the simplest possible profits. It can seem complicated at first, so we’ll try and keep it simple, but good trading ability is a great tool to have for any serious bettor.
It should also be made clear that it can be time consuming, hard work and sometimes unpredictable.
When you trade through sites like Betdaq, Betfair or Matchbook, you have the ability to both back a bet and to lay a bet. To ‘back’ a bet is to do no different than what you’d do at your regular bookmaker. You’re placing your bet on the game by backing it. By laying a bet you are betting against it happening, and with the right shift in odds you can secure a simple profit by betting and laying the same bet at the right time.
Within trading there are many different methods, but we’ll start with 3 essential methods.
1. Scalping is the quickest of trading methods but ensures small consistent profits if it is done right. Scalping is the basic idea of backing a bet at one price, and as soon as the odds drop, getting out of there for profit. Soon as you see a bet’s odds drop down a tick, that’s your cue to get out of there and take the money. The disadvantage of chasing such small profit margins are obviously the great risk of losing lots of money, so it takes knowledge and skill to scalp. It’s best used on in-play markets or pre-horse racing events where you can get some bigger odds.
2. Swing trading is more complicated and can be a much more drawn out process. It also requires a great deal of knowledge from yourself and keeping a consistent eye on the odds, maybe even all day. Swing trading is basically backing your own knowledge of a bet, and also using your knowledge that you think this team will be heavily backed at some stage, which makes a swing in the odds likely. As soon as you get that big swing in odds (if you do) then you are able to counteract your first bet. So, if you’ve already backed a bet, you are then able to lay it off for a secured profit, providing the odds move in the direction you wish after your initial bet.
3. Finally there is cross market trading. Now cross market trading is the method whereby you can place back and lay bets on multiples markets. What you attempt to do is use multiple markets, such as a correct score market and an over/under market, and try to create a situation where you cannot lose. For a very simple example, get a good price on a 0-0 correct score and then back over 0.5 goals at the right price and you can ensure profit either way.
If you feel confident reading those brief and simple explanations, then there are thousands of videos, articles and guides on trading all over the web that all go in to different level of detail depending on your level of experience, but that is a couple of basic essential methods.
So, how do you get started?
Just because you know what those methods are it doesn’t mean they’ll always work, or that you have the knowledge to pull them off. Any type of betting is all about experience, but trading perhaps even more so. You don’t just need experience of a sport and knowledge of how a game may pan out, but you must equally understand how others play these markets, how trades can go wrong and how the odds are likely to move and react to certain situations.
The simplest way to test the water is to create a small betting bank and pick one sport to stick to. Pick an amount of money you are happy to lose, and call it collateral for the bigger picture. Use this money to test out trading methods, see how the whole thing works and accept you may lose it.
In fact, it’s almost inevitable you will lose your initial attempts because making certain mistakes can ultimately help you to understand things properly. So, it’s much better to sacrifice a safe amount at the start a couple times rather than running straight in with a big betting bank and learning your mistakes by wiping it out in no time at all, which can happen. Most importantly when you are learning – keep your cool. If a situation gets the better of you and the temper kicks in, it’s time to log out and walk away. Trading takes far too much intelligence and control for that, don’t let your emotions rule.
Three key areas to look at if you’re starting out is your stake size, how to hedge your bets and admitting when you are wrong. Admitting when you are wrong is probably the most important. Being able to trade out for a small loss is far more impressive rather than being stubborn and losing hundreds.
With regards to stake size, any bettor can randomly jump in to fixed odds betting and pick winners from the start, but it does not work that way in trading. Trading is an investment, meaning returns are typically more modest, but if done well, they can be more consistent.
Also, learn to admit your mistakes. It’s known as ‘scratching a trade’ or ‘scratching trades’ and it simply means if things aren’t going you way, just get out of there for the smallest possible loss possible, or even the loss available at that time if it’s only going to get worse. A small example being if a team you’ve opposed equalises with 10 minutes to go and it wasn’t what you wanted, don’t be stubborn. Don’t sit there waiting for something to happen out of blind hope, make sure you act on it and reduce your losses at much as possible. If that means cancelling a bet and losing some money, so be it, just avoid getting to the worst case scenario of losing all of the money involved.
Finally you need to know how to hedge. It’s the simple form of trading which means putting level stake bets on back and lay. This means you start in a position when you cannot lose. You’ve backed something and you’ve laid it off for the same amount, so if you let it play out you’ll just get your money back. Then, you can trade off bets as you see fit and the only profit or loss will come from the bets you have traded. This is a simple method and perhaps a decent starting point.
If there’s any confusion over this method however, Betfair offer a ‘What If’ feature, which will show you potential outcomes of supposed bets, so this can also be very useful to start with.
This is just a basic level introduction to some of the key elements and trading methods.