Looking to trade your first horse race? Caan Berry, professional Betfair trader talks you through starting out...
"Most importantly when starting out, try to be defensive in your trading style. The traders who survive the longest are usually the ones who are most careful with their stakes and know when to cut a loss."
Horse racing markets are unlike any other on Betfair Exchange.
They can be incredibly fast-paced and volatile. Given there are so many races available to trade each day, there will be more than enough opportunity to practise your skills and become a better trader.
Make no mistake, trading is a lot of fun. If you've only ever seen trading in the movies, you might assume that it's all about chasing gigantic wins in extremely volatile markets. While that may be true at times, it's not how most successful traders operate on a day to day basis.
Each to their own, but I find that small and consistent wins will add up to a nice profit by the end of the day. Time flies by when you're trading multiple markets in a day and it's often quite surprising how quickly you can rack up big profit in a session small wins.
If you set yourself any goal at first, be it that you'll simply stick to your strategy. Don't ask any more of yourself for now.
Horse Racing Strategy
There are an infinite amount of ways to trade a horse race.
After years of trading, you slowly build up a large collection of strategies that you can use in the right environments. Every strategy is best used in different market conditions. There's no "one size fits all".
If you're just starting out, you'll likely only have one or two at hand. This will mean that you'll need to do a lot of waiting around. Given that you only have a limited amount of strategy at your disposal, there will be a limited amount of markets that they will be of any use in.
In other words, prepare to sit on your hands and do nothing for the majority of the time. Sound exciting? Good.
Getting Set Up
While not strictly essential, it's rare to see any pre-race trader achieve much success without the use of third party software.
I use Geeks Toy myself, but there are many other options all at a similar low cost. Programmes such as Geeks Toy will allow you to trade using the ladder view, which makes it much easier to see the full depth of the market. In other words, you can see how much money is available at each price. Added to that, the odds are refreshed much faster than when using the Betfair Exchange website alone. Timing is crucial in this game. Being a few seconds behind the rest of the market can cost you dearly.
Familiarise yourself with the software by watching videos online, reading the manual or playing around in safe mode. You don't want to accidentally place a large bet without realising it!
It's time to open up a racing market.
You'll want to open a market that is starting in around 15 minutes time. Most of the action happens in the final 10 minutes, so this will give you a few minutes to settle in before it gets busy.
We will be using a simple scalping strategy to trade. This usually works best on handicap races or those where there is no clear favourite. With scalping, the less volatile a market, the better.
Scalping Stable Markets
Excuse the pun, but scalping is one of the most popular approaches for a reason. It's simple, easy to understand and works without knowing too much about the markets.
Scalping involves making lots of small trades in relatively stable markets.
We're going to look for a horse that has a relatively "flat" chart. If the price has been swinging heavily, it likely won't be safe to scalp. There's no hard rule for this but I find that it's best to stay within the odds range of [3.00] - [8.00] if you're just starting out. If this is your first time, I suggest using small stakes that you are comfortable with losing.
All we're going to do is place two orders at either side of the current price range. If the price has been hovering around odds of [4.4], we will place a lay order at [4.3] and a back order at [4.5] for the same amount.
With a bit of luck and patience, both orders should eventually get filled and you will be left with a small profit on that horse.
The exact way of doing this will depend on the software you have chosen, but you'll now want to green up all of your selections. This means that the profit you have secured on that one horse will in effect, be distributed across all the outcomes. This leaves you with a profit, no matter who wins the race.
If the market jumps through your orders and continues to move, you need to be quick to cancel your remaining orders and green up for a small loss. It's better to get out early instead of hoping the market will turn back around. You'll often be left with an even bigger loss.
Every racing market is different but some do share similar characteristics. Handicap races are often more suitable for scalping as if the handicapper has done a good job, as the horses should have an equal chance of winning.
You'll also notice that bigger racing festival markets behave entirely different to smaller, one-off races with lesser known jockeys. The Cheltenham Festival is a great example of a series of markets that have a huge turnover and therefore act very differently to a Thursday night at Kempton. Markets at Cheltenham are often much slower paced and bounce around less than others.
Most importantly when starting out, try to be defensive in your trading style. The traders who survive the longest are usually the ones who are most careful with their stakes and know when to cut a loss.
Cutting losses and being protective will bring you more success than going all-in and being wiped out before you even begin.
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