Pre-Race Trading Strategy for Horse Racing on Betfair

Is it still possible to make money from pre-race trading on the horse racing markets in 2022?

Absolutely!

Whilst betting markets evolve year after year. There is one thing that stays consistent; there will always be opportunities in the market.

In today’s article, we are going to take a look at how to take advantage of these opportunities. Detailing some of the best pre-race trading strategies for horse racing in 2022.

How Pre-Race Trading Strategy Works – A Beginners Guide

First off let’s explain exactly how pre-race trading works.

One massive advantage that using betting exchanges over traditional bookmakers gives us is the ability to trade our betting positions.

This is in the form of back bets and lay bets.

“A back bet is backing something to happen. This is basically the same as how you bet with bookmakers.”

For example, here is what a £100 back bet on the horse “Happy Dex” would look like on Betfair. The odds are 1.26 currently.

In this example, we would stake £100 to win £26 minus the commission Betfair takes on winning bets.

This works out at a final profit of £25.48 should “Happy Dex” win.

Now let’s take a look at the reverse position we can take, which is called a lay bet.

“A lay bet is when you bet on an outcome not to happen.”

In this example, we are betting the horse “Happy Dex” not to win.

As you can see from the picture above. In this scenario if “Happy Dex” fails to win we will win £100 minus the commission (£98.00).

Should “Happy Dex” go on to win the race we would lose £25. We would be risking £25 to potentially win £98.

How Pre-Race Trading in Horse Racing Works…

Now let’s go through how combining back bets and lay bets enable us to trade.

If we were to back “Happy Dex” at odds of 1.26 and then place a lay bet at odds of 1.24. You can see that should both bets be matched a free bet scenario would be created. Where £2 (minus commission) would be won should “Happy Dex” win and £0 would be lost on any other outcome.

We could also set up the same outcome by laying odds of 1.24 initially and then backing at 1.26.

Hedging For Profit…

One other big advantage of trading is that we can also hedge our profit across all outcomes. To guarantee that a profit is made no matter the outcome.

In this example, the lay stake has been adjusted to secure an outcome of £1.58 profit on “Happy Dex” and £1.57 on every other horse.

The profit is made due to the fact that we are backing something at higher odds and laying it at lower odds.

An easy way to think about this is how a profit is made when you buy a stock at a higher price than you sell it for. Perhaps those of a younger age think about it in a similar way to how people trade cryptocurrencies.

Betfair trading works in a similar way (except there is tangible value underpinning every bet).

Best Pre-Race Trading Strategies for Betfair:

Got your head around how Betfair trading works?

Great! let’s move on to some of the best pre-race trading horse racing strategies for Betfair.

Swing Trading:

One of the best pre-race trading strategies to use is swing trading.

Swing trading is a trading style that focuses on taking advantage of larger moves in the market. In comparison to scalping, your time involved in the market will be longer.

Swing trading is great for a number of reasons and if you are a beginner looking to start profiting from the pre-race markets. It is an ideal starting place.

The fact that you will be holding trades over a longer period of time reduces “panic trading.”

Many new traders jump into trading and start looking to get involved when there is the most action and volatility. This is usually in the 5 minutes leading to race time. Where money enters the market at greater volume and price changes can be very sudden.

For the experienced pre-race horse racing trader who can read the markets well and stay level-headed throughout. This creates a lot of opportunities. However, for those that are relatively new to trading, this can be a “rabbit in the headlights” moment.

Where panic can ensue and costly mistakes can be made. A swing trading strategy can allow us to enter the markets much earlier with plenty of time to make our decisions. Let’s take a look at a swing trade where I entered the market hours before the start of the race.

Pre-Race Swing Trade Strategy – Example

This morning I opened up the markets around 10.00 to look for any opportunities that looked good for a swing trade.

Looking at Haydock 14.40, I believed there was a good opportunity to lay the favourite “Speycaster”.

At 10.15 I placed a lay of £50 on “Speycaster” at odds of 5.2.

Reasoning

On the Betfair graph, this favourite didn’t look like it was getting much backing in the early markets. Its price had hit a flat point at around 4.5 and then had been slowly drifting after.

The next 3 horses in the race looked like they were starting to get some backing. Especially the horse “Double Cherry” that had seen consistent backing from the start of the market opening.

This stood out as a good potential swing trade. The favourite was drifting with little support, there was strong backing for “Double Cherry” and there were also two other horses in the race at similar odds that had started to show market support.

At 11.30 I exited the trade by backing at average odds of 6.44. Hedging my profit across every horse in the race to guarantee a profit of £9.44 on all outcomes.

Now would this same set-up work every single time?

No, it wouldn’t, this will not work 100% of the time, no strategy can work every time.

However, I am comfortable in saying that this is a profitable strategy long term. Experience tells me that it will win much more often than it will lose. This is ultimately what profitable pre-race trading is about.

Identifying strategies that will win more then they lose!

Scalping:

Next up on the list of commonly used pre-race horse trading strategies is Betfair scalping.

Scalping is a trading style that looks to profit from small odds changes in the market. This style means you are active for very short time periods in the market. A scalp trade for example can be entered and hedged within a number of seconds.”

The advantage of scalping is that although you are generally taking smaller profits, from smaller moves in the market. You can be much more active in the market, getting in and out when you spot the right opportunity.

With a swing trade, we are normally focused on making a profit from one horse. A skilled scalper may make 20 different scalping trades on 4 different horses. In a 10-minute period before the race.

Which strategy should you use?

Good question, probably the strategy that you are most comfortable with.

Want to focus more on longer-term trading over a longer period of time?

Then swing trading is going to be the strategy for you!

Want to be in and out of the market within a short time period, and make multiple trades per race?

Then scalping is going to be a better strategy to focus on.

Can I use both swing trading and scalping?

Definitely!

Experienced pre-race horse racing traders will use both strategies. This will depend on the race type, setups and opportunities that are offered by the market.

Although many traders will have a style that they prefer. Horse racing markets are not all the same and different races require different approaches.

This is something that we cover in-depth in our courses.

Pre-Race Trading Strategy for Horse Racing in 2022 – Conclusion

In today’s article, we have covered two of the best pre-race trading strategies to use for horse racing in 2022.

Looking at the applications of the strategies and how they can be used to make a profit from the horse racing markets. A big part of becoming profitable in the pre-race horse racing markets is gaining experience.

Learning how to identify the right situations and apply the right strategy.

“It’s good to learn from your mistakes. It’s better to learn from other people’s mistakes.”

Warren Buffet puts it best.

You can save yourself a lot of money by learning from the mistakes and experiences of others.

If you want to learn more about the strategies detailed in this article and improve your horse racing trading. We have numerous articles and an in-depth course which can help take your trading to the next level…

Advanced Help: Pre-Race Trading Guide for Horse Racing on Betfair