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Welcome to Trading

Learn how to tap into the potential of the Betfair Exchange and trade your way to profit

Betfair's Starter Guide to Trading

The Betfair Exchange may seem confusing at first glance but, once you begin to understand it, there are a huge number of benefits.

One of the best ways to make the most of the great value offered by the Exchange is to start trading.

You may not be sure what 'trading' is in a betting context, let alone which markets to begin trading on. But it's not as complicated as you may think to start trading bets and making a healthy profit.

By the end of this guide you should have a clearer understanding on how trading works, where the opportunity is and what to do about it.

The basics of trading...

Trading is made possible thanks to the ability to place back and 'lay' bets (backing the opposite result) on the same event, at different prices. The aim is to back high, lay low.

By placing a bet at a good price and then trading out of your position once the price shortens, you can create a 'green book'. A bet where every outcome guarantees you a profit. It's labelled a 'green book' because potential profit on the Exchange is displayed in green.

A hypothetical example would be laying a horse at odds of 2.0 for £10 pre-race and accurately predicting the price of the horse would drift (get bigger) to odds of 4.0 just before the off.

All you need to do then is use the Exchange's cash-out feature. It places the appropriate opposing bet for you when you wish to exit the trade, by calculating the necessary stake to guarantee a green book. In this case it would back the horse at the new odds of 4.0 for £5 to guarantee a profit of £5 regardless of the outcome.

You can also make use of the auto cash-out feature that allows you to set a profit-level for a trade to lock in a profit, removing the need to be following along on your phone.

There are several strategies for trading across all the markets available, whether before the event, or in-play during it. Your own strategy and market preference will develop over time, but for now we will introduce you to some tactics and tools to help you get started with your trading career.

Trading on horse racing

Pre-race is often the safest place to start trading horse racing. One tactic popular with beginners is swing trading, where you're going to be backing or laying a horse pre-race and making profit as the price fluctuates before the off. The aforementioned scenario of laying and backing a horse at odds of 2.0 and then 4.0 pre-race is an example of swing trading.

The tactic is to observe a horse racing market around 20 minutes before it's due to start. Open the price chart of a horse and see if there is a rough trend, is its price coming in or drifting out over time? Around 10-15 minutes before the off is when the market becomes more active and is a good time to place your opening bet.

If for example you have noticed a 'steamer', a horse that is being heavily backed in and its price coming down, back the horse with a small stake with the expectation of the price dropping further. This then provides you with a profit by laying at the lower price closer to the off.

Remember we are trading, not betting. The trick is to trade out when the trend is finished or when it fails to come to fruition. Staying in a trade in the hope that it will come back to you will hurt your bank sooner or later.

There's no exact science to swing trading and it will become easier with time. Consult these pro-trader's guides for both what causes swings in price and what markets to target, as well as a more specific guide on understanding the steamer in horse racing markets.

'Scalping' explained

A second pre-race trading method you can adopt is 'scalping'. This involves lots of trades in relatively stable markets for a small profit.

The strategy is to place two bets at either side of the current price range. If the price of a horse 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.

We are offering poorer value to the market, but that's better value for you as a user. Note that you cannot use the cash-out feature here as you need to offer the lower values to the market.

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. You don't even need the price to move, you just need the market to be active enough. More information on the scalping system and which markets are suitable can be found here.

In-play betting

Once you are comfortable pre-race trading, you may wish to try trading races in-play, too. This is a potentially more exciting and rewarding approach, albeit with more risk attached.

The tactic to consider is a 'back-to-lay' strategy. A popular strategy would be to back a rank outsider pre-race, in the expectation that your horse will get out to a lead early. You can then cash-out and exit the trade as the odds come down whilst it remains in front.

To execute this technique, you need to be informed on several variables for that specific event, such as a horse's form, running style and its suitability to the track. Be prepared to exit fast if the horse does not get out to a lead to mitigate your loss.

Two methods for trading football

Football is another popular sport for people to start trading, with several different strategies and techniques to try, the majority of which require in-play trading.

One popular method is 'laying the draw'. Pick a match that has a low chance of resulting in a draw and while the score is still level (0-0, 1-1 etc.), lay the draw. You should place your lay bet at a time that will offer the most value. Many traders choose to wait for the odds to drop in-play before laying but this is entirely up to you. When the next goal is scored, exit the trade by backing the draw at the higher odds now that the match isn't level.

A similar principle is used by trading the first goal scored. Select a match where the home team is a heavy favourite, and back them at the highest possible odds. If they score the first goal, the market will adjust odds to reflect somewhere between a 70-75% chance of winning the match. By backing before the start of the match and trading out when that first goal is scored, you will net roughly a 25% profit.

As with all cases in football trading, prior research is needed beforehand to ensure the correct match for that market is selected.

For more information on the above techniques, as well as other starting football strategies, consult this pro-trader's guide, as well as an in-depth look at trading the first goal scored.

Trading outright markets in football and other sports

Within football, there are also opportunities for longer-term, outright markets trading. This is for traders who prefer to make fewer trades and have more time to consider various outcomes and do their research, without having to bet in-play.

An example is the Premier League Outright Winner market. Trading this involves monitoring a team's key factors throughout the season. You should be thinking weeks ahead of the current games and the run of fixtures on the schedule. If you're only focusing on the team's performance in their next match, you are better off in the match winner market.

Indeed, football isn't the only sport to trade outright markets, you can find them for practically every sport on the Exchange. An example of a typically volatile outright market would be Golf Majors, much shorter events that occur throughout the year. The same principle of diligent research leading up to and throughout the event applies. A much more detailed look at outright markets can be found here.

If you want education on how to trade in-play across these other sports too, use Betting.Betfair for detailed guides. One example is trading in tennis around breaks of serve. Ultimately you need to carry out your own research into the various options available and gain experience within those markets to settle on your own trading strategy and profile.

Why you should use an app

An important feature of the Betfair Exchange you should be aware of is the Betfair App Directory. Once you are comfortable trading and have developed your own strategy, transitioning to betting apps will help make trading on the exchange much more efficient.

To demonstrate how your trading can be improved, we can focus on some of the key features most pieces of trading software have including...

Live information

Apps refresh their feeds every 200 milliseconds. Everything is live, unlike the Betfair website where you'll be clicking refresh constantly or have a maximum auto refresh-rate of every second.

One-click betting

Select your stake and you can bet at the price you want with one click. This provides you with the advantage of faster speeds and the ability to place a bet quicker than someone on the website.

Ladder interfaces

Each selection (horse, team etc) has its own ladder, where its prices and odds are stacked vertically. This means you can see more market depth and amounts of money waiting to be matched across the different prices. Multiple ladders (such as the market for each horse running in a race) can be displayed side by side helping you to maximise the space on your screen and give you the best chance to understand the entirety of the market.

An app for everyone

Vendor apps come in all shapes, sizes and uses, so make sure to explore the full selection available to you on the App Directory.

As some further examples, there are some apps that can help analyse historical data to test and perfect strategies and others that are optimised for trading in specific sports. If you even wish to automate the entirety of your trading (so that you can be away from your computer during the day) then we have vendor apps that will allow you to do so.

If you need help to better understand and utilise the apps, be sure to consult articles on Betting.Betfair, such as this guide on the automation of your trading. Other articles provide insights on new trading methods that are made possible with the use of trading software, such as how to exploit order flow or the weight of money in markets using the ladder interface.

Get it right before you dive in

Trading can be hard and, at times, things may not go your way. Those that end up with more losses than wins early and often into their trading careers will regularly give up too easily and prevent themselves from reaching their potential on the Exchange. To make sure you do not share the same fate, these are the mistakes you need to avoid when trading to ensure you have the best possible chance to win more than you lose.

Trading under pressure

Trading under pressure is the number one mistake made by traders of all abilities. To avoid unnecessary stress when trading, always trade in a quiet, distraction-free environment. Don't rely on trading as your main source of income unless you've been trading successfully for a few years, and try not to set monetary targets. You'll probably end up trading dangerously to meet them.

Overtrading

This is easily done and a big problem for new traders. Make sure you don't fall into the trap of trading markets that have no value on offer. This is where research into the best markets for your strategy, such as laying the draw in football, comes into play.

Chasing losses

Without a doubt, the most dangerous mistake is chasing losses. This usually happens when you've made a small loss and out of frustration you make another trade with the hope of recovering the previous loss, but where there is not a genuine opportunity at hand. Some days you may finish in the red but, if you only ever trade when there is a genuine opportunity, you should start to see profit overall.

Bookmark our blog and make sure to visit Betting.Betfair.com to stay up-to-speed with all our trading news and updates.

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