A common problem with trading the draw strategies on Betfair is that traders get important aspects of Betfair trading wrong. The idea for this post came after reading a blog about Betfair systems where they have one or two posts about trading the draw on football games. A reader commented that he was following the strategy and had a series of successful trades. The problem, and it’s a killer problem, is that after a run of profitable trades there always follows loosing trades that result in big loses.
Big losses came when the match didn’t go as expected and the trader waited to see if the trade was profitable. Hoping and preying for a change in fortunes during a match is not a good trading philosophy.
How can a trader know if a trade is going bad?
Underdog scores first. Don’t be fooled to think that this will be a good thing. It doesn’t make a draw less likely (which is want traders want), in fact, it makes it more likely. Markets will expect the favourite will score making a draw more likely. As such the draw odds normally drop depending on how the favourites counter attack.
Neither team score. Nothing like sitting through a football match with no goals watching draw odds decrease and the value of your trade wither away.
Underdog scores a goal making the score line level. It doesn’t make following a match an enjoyable experience. Although as traders we must not get annoyed if things don’t go our way. Trading must be emotionless!
The solution to big losses on trading the draw
To avoid getting into the same situation as our fellow trader mentioned before traders must concentrate on two areas, which are match selection and exit strategies.
Reduce your losses in a big way by getting match selection right. It is probably the most important aspect of this style of trading football on Betfair. When games go as expected trades win. As traders all we need is for the favourite to score a goal that’s it.
Choose the best matches by using football stats, recent form and injury information. This post will give you more information on which stats to use for match selection for Bet trading (it is recommended to finish this post first).
No trader has ever consistently made winning trades with no losses. It is a statistical impossibility. Traders should expect things to go wrong and know what to do if they do go wrong. This is where a stop loss exit strategy is very important.
Stop out loosing trades early and it will not wipe out all the previous profitable trades. Experienced traders will use a sense of intuition to decide when to exit, produced from a knowledge of the football and trading strategy.
Less experienced traders should follow a mechanical stop loss strategy. If the conditions are met exit the trade. No thought, emotions or intuition. Just exit. For instance, if the underdog scores first exit. If the match continues for too long without a goal exit. Certain Betfair systems advise how much time to leave before exiting the trade and will dictate other methods for deciding when to exit. Traders should experiment to get the best results.
Always make a record of results from the methods, systems and strategies used. By doing so traders can measure how changes to the systems effects profitability. For instance, a trader might want to experiment with timings. Should the trade be closed 5 minutes after the underdog scores first or 10 minutes? Or, should the trade be closed if neither team scores in the first half? Some premiership football teams score most goals in the first half or second half so it is possible to make an assessment of whether the match is going to plan or not.
Exit strategy doesn’t just help traders decide when to close loosing trades but aides making the decision of when to close profitable trades. For newbies, winning trades should be closed for a profit as soon as the favourite scores and the trade goes positive. Unless the stats give confidence that the favourite will definitely go on to win. The longer the match continues with the favourite having a dominant score line the more the draw odds will increase making the trade more profitable. Although it is not recommended unless you are a confident trader.
Recording performance is necessary to make trading profitable. After 20 trades or after each month look back at your records and measure the strike rate of winning to loosing trades. Calculate average profit from winning trades by adding the profit from each trade and dividing by the total number. Do the same for loosing trades.
It will be clear how many winning trades are needed to make trading profitable. Experimenting with match selection or exit strategy is a good way to make adjustments to how the system performs. Changing match selection will affect the strike rate. Adjusting exit strategy will change the average profit and loss per trade. Get the balance right and you have a consistently profitable Betfair trading strategy.
Think of trading football on Betfair as a system. Feed your system with good football matches to trade, which have been carefully selected. Use exit strategies to reduce losses and to take profits early. Doing this will increase conversion rates of winning trades to loosing trades. Betfair systems aim to give traders the best settings for match selection exit strategies. Other systems aim to give traders more profitable Betfair strategies so that they can concentrate on making fewer more profitable trades across more sports and markets.
To finish lets looks at a couple of stats from the 2011/2012 English Premier League that will give inspiration for choosing the best match selection.
Man City won 97% of their home games last season and scored first in every one. The first goal was scored after an average of 38 minutes. Recommendation; lay the draw after 15 – 20 minutes and trade out after Man City score. Home games only.
Chelsea’s home games averaged 3.9 goals and produce over ‘2.5 goals’ per game. When playing at home Chelsea are normally the favourites. With so many goals Chelsea home games are good for draw and over/under goal trading.
Take advice from the professional as learn which football trading strategies are best for different situations.