Trading odds on Betfair has been spoken about previously at Lets Compare Bets. It is a worthy topic and deserves further thought. Trading on Betfair is relatively simple and involves repeating a simple and profitable process of making a series of back and lay bets. If any visitors are completely new to Betfair take a look in our betting exchange category. The post title Betfair FAQs will help get Betfair explained.
Before the easy part of trading on Betfair is discussed let’s consider the part that involves a little more work. That’s the selection process. Namely, finding a horse who’s odds will move in a profitable direction. That’s to say that they go from being long to being short or vice versa. Traders can either learn how to do handicapping and rate horses in order to select the best candidate or follow a more simple technique. Various free horse race betting resources are available on the internet which can be useful for selection purposes. A recent post also describes how Racing Post can be useful. Alternatively find a trustworthy tipster to pick horses. If the tipster is good lots of people will follow their advise which will cause the odds to shorten. Alternatively, if the trader decides to let the race go ‘in play’ they can trade out for a profit during the race, which is a much more risky strategy however.
What is needed for trading on Betfair?
- First traders will need a Betfair account…that one’s pretty obvious. Read our Betfair FAQ in the betting exchange section before continuing if you do not understand how Betfair works.
A swing trade is simple and involves backing odds at one price and laying them off at a lower price. The rule is back high lay low. Alternatively traders can lay first and back later at higher odds. Successful traders repeat this process over and over to get a stream of profitable trades.
How do you guarantee a profit by laying the selection?
Guaranteeing a profit is made possible by hedging the selection. This involves making corresponding back or lay bets (depending on whether the first trade was a back or lay) on all the horses in the race. It would be impossible to do this successfully manually as it would involve having to calculate the correct stake and placing lots of small bets on all the other horses. Luckily there is software available to do the job for you. One software provider offers the hedging function as part of a free version. Bet Trader is one of the only providers to offer this function for free and is worth a look. This process is called ‘greening up’. It’s nothing to do with gardening but is what all Betfair traders are looking to do.
Below is a video of a Betfair swing trade using the Bet Trader software. A back bet is placed before the race starts. Notice the count down clock at the top left. This advises traders how long is left before the race starts. As predicted the odds of the race shorten before the race starts.
A back bet was placed on Kings Counsel. The video is for illustrative purposes only, as such the bet is not large. As the odds move the screen to the right of the horse name shows the potential profit (in green) or loss (in red) should the trader decide to click the hedge button. Bet Trader, the software, is in ladder view. There are columns for each horse. The grey column in the middle shows the odds for the horse. The current traded price is shown by the yellow box. The column on either side shows how much money is entering the market at those odds for the back and lay side of the market. Blue indicates the back side (no jokes please) and the pink column shows the lay side. Eventually the trader clicks the hedge button which guarantees a profit across the whole field of runners: the profit is shown in green below the name of each horse.
When to enter a swing trade on Betfair?
A trader wants to be in and out of the market well in advance of the race starting. This reduces the risk of loosing money due to a horse loosing or not finishing. Odds can move quickly and by large amounts when a race goes in play.
Traders may ask themselves what is a good price to enter a trade? In order to answer this question exchange traders can look at the free charts available on Betfair. The next picture shows a chart of the odds of a horse and the volume on money wagered.
The black line at the top of the chart marks a good position to enter a trade. The odds have tended to reverse at this level. There is a high probability that the odds will shorten if a swing trade is opened at a level close to the top black line. After the odds shorten the Betfair software can be used to green up for a profit.
So, for people wanting to learn how to do exchange trading on Betfair, here are the steps to follow.
First get the tools needed for Betfair trading
- learn about Betfair and open an account
- get the software needed for ‘greening up’ on Betfair
- select a horse to trade, either by following a tipster or using one of the free betting resources available
- decide at what price to enter a trade. The charts available on Betfair can be useful for selecting entry points. Charts are located on the screen that shows the runners for the race and the odds, to the left of the horse and jockey name, shown by a little chart sign.
- wait for the odds to shorten and click the hedge button on the software. Bet Trader has the hedge button located at the top of the ladder view. See the video for the direct location.
- use a stop loss strategy. If the odds move in the wrong direction hedge out the trade for a loss. Decide how much of a loss will be allowed before closing the trade and stick to this rule with all trades.
Those are some basic steps for Betfair trading. Expect some loosing trades. These can not be avoided. Operate a strict stop loss policy. Betfair traders aim to make more winning trades than loosing trades, :). To get more posts on this topic and other interesting articles subscribe to Lets Compare Bets by clicking the link at the top right of the screen.