Pre-race trading on Betfair is all about picking low-risk opportunities and stacking probability in your favour.
Trading at the wrong time is one of the worst mistakes you can make, it’s incredibly risky. It’s one of the easiest ways to turn a good decision into a loss, particularly if you’re a Betfair scalper. Being over-exposed leads to chasing losses and irrational trading mistakes.
So in this post, I’m breaking down the 8 stages of betting market development for pre-race traders…
Note: stages 6 – 8 always provide the best opportunities for both risk management and increased staking. You’ll see why as I compare all stages in one horse racing market below.
Night Before: Stage 1
Unless you’re a high-level market maker, stage one is of little interest. Prices are not efficient, which could be deemed an opportunity, but liquidity is incredibly low. If you should be opening a trading position here, there’s little chance of exiting effectively. Getting out of a £100 position is a nightmare here if you’re on the wrong side.
Take a peek at the second red arrow in the image below. Those gaps in the spread are huge!
- £937 in traded volume
- Risk level: very high
Typically the volumes on offer here are provided by market-making bots, to take a price is a very bad idea. Some market makers are believed to have very favourable loss-leading terms with Betfair to provide this service. The only time I would enter here is if I knew for certain the horse was being set up for a gamble.
Early Morning: Stage 2
The second screenshot of this race was taken around 7.30am. You’ll see that money has been matched on the market now, although it’s still very early days.
I’m not totally against offering a favourable entry here if we’re looking to trade the morning to afternoon time-slot. Again, there needs to be a solid reason for this and market activity should be re-inforcing my trading belief. Exiting a position is the concern here as the next stage (3) is where prices can change quite drastically.
This stage usually provides us with a better insight into early support. Be careful though, things change fast and opening a larger position here will leave you exposed. For that reason, scalping and short-term trading is a bad idea. Chasing an exit offers more risk than reward.
- £4,653 in traded volume
- Risk level: high
With such low traded volume you can see short-term trades are risky, as with many of these stages.
Morning Shows: Stage 3
Now we’re cooking, most days there are at least one or two decent opportunities here. The markets are starting to form and the morning shows appear with bookies. Between 9.30 and 10.30am is the first real opportunity to open a trade. However, it’s a long-term thing again. There are several horse racing trading strategies that we could use, but these markets aren’t robust enough for short-lived trading.
- £18,761 in traded volume
- Risk: moderate
Take a look at how much the traded volume has increased in the last few hours…
You’ll also notice that the market is only seeing small matches on average. Keeping an eye out for consistently larger matches raises awareness of potential gambles later.
1 Hour to Post: Stage 4
Finally things are picking up and there’s a decent amount of money in the market. Depending on the race time this will vary, although higher levels of unmatched money makes it easier to exit a trading position. Managing the downside is top priority, so it’s that bit easier to exit for £100-£300 from around now. The better your trading entries are the easier you will find it to exit here. Alternately, bad entries are still hard to fix. It’s always the way, getting out of a bad position is hard because nobody wants it!
- £49,514 in traded volume
- Risk level: fair
Notice how much tighter the price spreads are between back and lay now. Compared to stage one it’s a different betting market.
20 Minutes to Post: Stage 5
During bigger meetings like Cheltenham and Ascot, this is the stage where things start to warm up. On your day-to-day racing, this still isn’t enough for short-term activity. So many try to scalp prices here but it’s destined for disaster. You can nip in and out of the market for a tick or so on £20 or £50 although it still carries excessive risk for the effort. Overall market volume has increased since the night before although it’s still a very inactive market.
You can usually tap into an early move here a few times each day with bookies dumping excess liability they may have taken from the morning. If it’s not some early ‘genuine money’ then I prefer to watch. The real Betfair trading starts in the following 3 stages.
- £72,784 in traded volume
- Risk level: fair
See how the grey volume bars on the Betfair chart are starting to get bigger.
5 Minutes to Post: Stage 6
Now the action starts proper. The market is getting somewhat active, it’ll vary between race meetings and TV coverage but this is where we start to see real moves of interest with regularity. If there’s not enough activity it shouldn’t be traded. Missing out those ‘maybe trades’ is the easiest way to enhance the overall bottom line so don’t be tempted unless something is really happening.
More fluid money rolling into the market means we can take positions and increase staking with lower risks. Its still a little before you want to be scalping on any kind of scale but there’s a lot more potential here.
- £150,791 in traded volume
- Risk level: reduced
New traders often get complacent here and trade like they should be in the last 2 minutes. If you suffer from that, try to sit on your hands for another couple of minutes.
You can start to see actively traded ranges at this stage with more money matched and increasing flow. The next stage is the most important though…
3 Minutes to Post: Stage 7
This is where I like to play the most. A tidal wave of money comes between 4 minutes to post and 3 minutes to post, believable trends start to form and it’s the lowest risk time to trade momentum. It’s far easier to stake bigger here at a reduced risk. Turnover isn’t quite as fast as the last minute in most cases although there is still some good movement in prices.
Betfair Scalping is best done in this time frame, swing trades do happen although much of the movement has already happened by now.
- £202,396 in traded volume
- Risk level: low
Having that extra liquidity offers a better fill rate and some bigger numbers to get out against if we need to dump a position.
After Post Time: Stage 8
By post time (presuming the race goes off on time) most of the fun is out the way. The risk is getting caught in-play, but you can see why this is key to being active, staking bigger and scalping effectively. Look how much money has been matched on the market in comparison to other stages!
- £336,758 in traded volume
- Risk level: lowest
Each race is a little different depending on the track, time of day and start time but there’s still plenty of real money to scalp against after post time if you have live pictures. If you want to learn more, check out the products tab on the site’s main menu.
As a complete beginer .! I found this explanation really really helpful .. very clear as pictures rather than videos ..perhaps you could put it in the course somewhere near the begining . I got lost on the course and this explanation would have been very helpful im certain .
Caan, thanks for a great reminder
Great blog to be fair.
And you are way way way more intelligent than that Matt zarb!
Keep fighting the good fight, Carn!
What’s your optimum time frame for swing trades Caan? I presume it’s 10-5 minutes. Thanks.