The concept of trading, with its associated language and different types of specialized software can be quite intimidating for novices. Trading is not for everyone. It is stressful and time consuming, and some people find that it is incredibly frustrating.
You can learn quite a lot from reading articles and watching videos, but you also need hands on practise. My aim with this article is to help you avoid the very basic mistakes and to help you decide if this is really what you want to be doing, whether the risk v reward is worth it to you. Betfair and other betting exchanges give you the option of backing or laying, and this opens up the possibility of doing both at different times, hoping for a change in price in the right direction, and making a profit as a result.
While the basic concept is easy to grasp and it sounds very easy to do, in fact trading has developed into quite a complex and tricky art, because people have designed bots and software to take advantage of the most obvious situations where trading should give you a profit.
These can disappear as fast as they appear, but it is often not easy to tell the difference between spoof money and real money until it is too late. When trading you are swimming in shark-infested waters and you need to have your wits about you or you will get eaten alive. One thing trading is not is a quick, easy risk free way to make a guaranteed large profit. Some very skilled traders can make it appear that this is the case, but all trading is risky, and some is very risky indeed.
Trading is not something that you can easily set up and leave — unless you set up a stop loss position it requires constant monitoring. There are several different ways in which you can trade, depending slightly on what it is you are trading. There are many variations on these themes but the basic types are:. Scalping is the term used to describe very short term backing and laying, usually just one tick apart, to take multiple very small profits. This sort of trading is suited to fast moving markets such as pre-race horses or in play events.
Bigger profits are made at higher odds where tick sizes are larger, but if the trade goes against you the losses are bigger too. Swing trading involves backing your judgment not only as to which way the price is going to move, but also how far. A back or lay bet is placed at the current price and a counter bet is placed several ticks away.
This is far more risky than scalping since there is no guarantee that the swing will happen, and in general the longer you stay in the market the more potential there is for something to go wrong. You can swing trade fast or slow moving markets, and swing trades result in bigger profits, but also bigger losses when things go wrong. Swing trades can be placed over much longer timescales than scalping, for example you may decide in March that a horse is a good price for the Derby June , and back it ante post, with the intention of laying it off after it has won one of the trial races in the spring.
This is slightly more complicated than single market trading because if you back and lay the same selection in the same market you only pay commission on your overall profit, whereas if you back something in one market and back something else in a different one, and one of the bets wins, you pay commission on the whole of the winnings in that market, even though you have lost something in the other one. Calculations for this sort of thing are therefore complicated and need to be done with care.
In addition, trading software cannot green up for you across two markets — it has to be done manually.
The first and most important thing to do is to set aside a bank for trading that you can afford to lose. Without in any way intending to sound pessimistic, it is highly likely that you will lose it — most novice traders blow a bank or 2 while they are learning. Your emotional and psychological state will critically affect your trading.
So consider your bank as spent — regard it as payment for learning how to trade. At this stage if you make a profit it is a bonus.
Betfair do not mind you having several accounts, so it makes sense to do this and it makes keeping track of your bank extremely easy. I made the mistake of trading almost any market I could find when I started out.
I watched all the videos, and had a go at the horses, the football, the tennis, laying the draw, laying the field and so on. I soon realized that I was trying to be a jack of all trades and master of none, and I settled down to trade what I feel most comfortable with — horses. You may be happier trading football — it can be done while you are watching the match, which you may well be going to do anyway.
Whilst there is nothing wrong with experimenting, trading does require some knowledge of what is happening and why the odds are doing what they do. Horses are one of the few exceptions to this — you can scalp pre-race horses on the basis of the numbers alone.
If you try it with football trading strategies sooner or later you will get badly burned as football trading requires research. Sometimes you will lose. Its part of the game and impossible to avoid. You need to learn when to scratch the trade, and do it quickly, and when to settle for a loss, and do that equally quickly. All of my biggest losses have been due to me waiting for the odds to come back when I should have got out as soon as things started to go wrong.
Never, ever chase losses. Accept the loss and move on. If you feel upset, frustrated, angry or cheated by losing, STOP. Go for a walk, go to the gym or do something completely different, anything to get rid of that pent up emotion. It is extremely easy to lose it all and more on the next trade by trying to be clever.
Trading is all about discipline. Set out your rules and stick to them. ALL gamblers see what could have been if only…. There will be plenty of times when you could have done better by waiting longer, and you will tend to forget the times when your actions saved the day and waiting for more would have been very expensive. One of the most important things to learn to do is to scratch trades quickly if they are going the wrong way.
This is particularly true of scalping, where fractions of a second can mean the difference between getting out without loss and having to take a loss.
Scratching includes both cancelling an unmatched bet and placing a counter bet at the same odds, depending on whether your first half of the trade has been matched or not. I have seen articles by experienced traders advocating spending time placing bets and scratching them again as practise before you start trading. I would much rather scratch and be wrong than not scratch and be wrong — protecting your bank has to be the first priority.
I cannot emphasize enough how important it is to start with small stakes. These people are very experienced traders whose videos are probably advertising a service and are therefore designed to impress. When you are inexperienced the tendency is to freeze in a panic if the market starts to move against you. The simplest way to trade is to back and lay the same amount. However, if you have built up a nice profit on a horse and not hedged it, and it loses, all of that work has gone to waste.
Most traders like to hedge their profits and losses across all selections, so that you either win something whatever happens, or lose a little instead of risking losing a lot on the wrong result. There are variations of this — you can bias your returns in favour of one result while still hedging part of it — it is entirely up to you.
The screenshot below shows the result of hedging the 60p profit on The Which Doctor shown above by laying 11p at 5. One way round this is to hedge when you place your 2nd bet, using the what if figures. You need to use trial and error to do this, so it is rather slow, and I would go so far as to say it is nearly impossible to trade effectively in a fast moving market using what if figures.
For me this is a no brainer, you need trading software. This screenshot illustrates several aspects of trading software which give the trader an advantage over using the Betfair website. This is ladder view, allowing you to see many more prices than the conventional Betfair grid. This is vastly quicker than loading a betslip and typing 10 then submitting the bet.
Bets can be cancelled with 1 click too. This gives you a massive advantage over trying to use what if figures on Betfair. Most of the betfair software packages give a free trial so you can experiment and choose the one you like best. Whilst not being foolproof, this gives a fair representation of what would have happened if you had used real money, as long as the trial bets you submit are a sensible size.
Step By Step Guide. Your First Matched Bet. Likes Followers Subscribers Followers. By admin On Apr 14, 10, Learning to Trade on Betfair with our Beginners guide The concept of trading, with its associated language and different types of specialized software can be quite intimidating for novices.
Trading terms Green up — to hedge for a profit over all selections green book. Hedging — to equalize profits or losses across all selections in the event regardless of the result. Red Up — to hedge for a loss on all selections red book. Scratch — to cancel out a trade by placing the opposite bet at the same odds, or to cancel the bet before it is matched Stop loss — a bet placed usually with the aid of trading software to guarantee that you will not lose more than a specific amount on a given trade.
Stop losses are not infallible, particularly in play, for various reasons. Tick — the difference between the two closest prices at Betfair.
Tick size depends on price, it is small at low prices and increases as the prices get bigger. WOM weight of money — the amount of money queuing above or below the current odds.
Types of trades There are several different ways in which you can trade, depending slightly on what it is you are trading. There are many variations on these themes but the basic types are: Scalping Scalping is the term used to describe very short term backing and laying, usually just one tick apart, to take multiple very small profits.
Swing trading Swing trading involves backing your judgment not only as to which way the price is going to move, but also how far. Getting Started The first and most important thing to do is to set aside a bank for trading that you can afford to lose. You must learn to emotionally detach yourself from the money Your emotional and psychological state will critically affect your trading. Decide what you want to trade I made the mistake of trading almost any market I could find when I started out.
Scratching trades One of the most important things to learn to do is to scratch trades quickly if they are going the wrong way. Stake Size I cannot emphasize enough how important it is to start with small stakes. Hedging The simplest way to trade is to back and lay the same amount. Trading Software for horse racing For me this is a no brainer, you need trading software. You might also like More from author.More...