Betfair Trading: Entries & Exits …EVERYONE’s Biggest Edge

This afternoon while trading Betfair, I was thinking about answering one or two questions from regular readers. They were pretty similar in nature, so I thought it would be worth posting about.

Entries and Exits

Picking an entry into the markets can be a fairly comfortable thing once you’re confident in your own ability. However, it often proves to be a little nerve-wracking when you’re not sure.

So what is a good entry? What is a good exit?

Equally important questions, although it may not seem that way from a psychological point of view.

The Betfair horse racing markets are often filled with a mixture of:

• Frantic betting
• Traders consumed in the moment
• Big players manipulating and holding prices
• Arbitrage between bookies and exchange
• Automation taking advantage of reactions
• Punters trying to get their twenty quid on

…all wrapped up into the last ten minutes or so before the start, otherwise known as the ‘Live show.’

The live show before a race is where the majority of money will always be matched and therefore provides the most opportunity to trade. The problem is, with this massive group of people throwing money into the pit, both back and lay, all for various different reasons, it can prove pretty testing emotionally. Particularly if you’re learning to trade with ‘noise’ knocking the price back and forth even if there is an underlying trend. If you look at the image from the Geeks Toy software’s Market Overview chart shown above, you will see I’ve highlighted the trend over the last 5 minutes with a clear blue line (Master Rajeem, a runner this afternoon).

Picking a good entry is absolutely key in such situations. Bearing in mind I expect the price to shorten in this instance, I’ve highlighted the points which would be the best entries: 3.9, 3.7, and 3.6. Again, the hardest problem with this in the moment is they are the points at which it appears the price has turned against the trend… and so the mentality game starts. However, they are the most valuable, unlike the low points below the blue line. Entering at the correct point gives the opportunity for several ticks profit extra alone.

Against the Grain – Wise?

Although entering the market like this seems to be completely against the grain and the ‘contrarian’ approach as you’ll so often hear about when reading trading articles, it pays dividends in both profit and the way you ‘feel’ later on in the trade. For example, had you entered the market at 3.6 at the bottom of the first low early on, you would have actually been in profit overall in the trade longer term, but you would have had to endure over a minute of sitting looking at a red position before it started to make you money. It’s not that you’re wrong in your decision-making, but it’s giving yourself more of a chance to close out for a loss! Mentally, it’ll take its toll over an afternoon’s trading, no doubt. Here’s the overall Betfair graph for Master Rajeem with the start of the live show shown all the way down to post time….

IMAGE UNAVAILABLE – SERVER UPDATE

The green line is just there to highlight the perfect points of entry. Often, having that patience to wait for the price to bounce back a little once you’ve had those confirming signals of the trend you anticipated can make all the difference. Being aware of this can just give your confidence a better chance of survival! And confidence makes all the difference in the world when trading the Betfair horse racing markets. Exiting such trades is the complete opposite, and it doesn’t necessarily mean a full exit either. One of my favourite ways of limiting risk in a situation and building on my own confidence is to enter at the most value point I can find (say 3.9 in our example), let the trend continue to the point where I believe it to have gone beyond its price momentarily (say 3.6), and take out a third to half my stake. This allows my margin for error to increase drastically, as my point of profit/loss would be extended to 4.2 in this instance, at which point I’m happy to see just how big a swing in price I can scoop!

That example would be in an ideal world, although often it doesn’t quite pan out like that, even for the best of us. Carrying out this sort of strategy in the market will undoubtedly put you in better stead to succeed.

Remember: the biggest edge we all have is choosing when/if we play. If it’s not right, do nothing! And if it’s the ideal opportunity (and you’re pretty confident), be that bit more aggressive… but only for that reason, no other!

Article: In-Play Horse Racing Strategies (Winning Statistics & Weak Spots)