If you’re trading horse racing on Betfair, it’s extremely important to understand the market characteristics and limits.
Whilst each market is unique, the location, grade of race, and number of runners can give big clues on likely trends.
In this article, we can take a look at influences from a Betfair trader’s perspective…
Money Matched on Betfair Racing:
The total amount of money matched is often a good indicator of quality. Regardless of the event, be it a race or a football match. On average, the average horse race sees around £500,000 matched in the UK. If it’s only a minute or two until post and there has been under £100,000 matched, it is likely to be a lower quality race. Here’s an example of a higher liquidity race at Cheltenham via one of the Betfair apps.
Ultimately, lower-quality races tend to be more volatile. Because there is less money in the market and prices jump around erratically.
Fill Rate (Per Second)
Fill rate is the number of orders that are matched in the market, and the rate at which it happens. Generally, when you are scalping, it’s beneficial to trade in a market with a high fill rate. This is because you want both of your orders (lay and back order) to be filled quickly, limiting your trading exposure in the process.
A slower fill rate could mean that you never get either of your orders matched, or that only one side is matched. You don’t want that as it could leave you starring at a loss as the price moves against you.
Price Ranges For Racing Trading:
Most markets operate within some kind of range. Depending on the volatility of the market, it can be a wide range or a tight range.
The way you trade a market will often depend on the amount a price ranges. For example, tightly traded ranges are ideal for scalping. As the market only moves a few ticks up or down in any direction. Backing at the top and laying at the top and bottom of the range in anticipation that the price will remain static is a fairly low-risk strategy. However, you’ll still need to be careful the price doesn’t break outside the range. Selection of situation is the key to employing this kind ofhorse racing strategy. Only a fool would trade every race the same.
Larger trading ranges generally require more of a swing trading approach. Swing trading differs from scalping Betfair as instead of looking to profit from 1 or 2 ticks, you might look to trade five or 10 ticks, or occasionally a lot more.
Ranging Prices For Racing Trading on Betfair…
There are points in the Betfair odds system that we call “crossover points”. These are around odds such as 4.0 – 4.1 where the tick below is 3.95 (0.05 away) and the tick above is 4.1 (0.10 away). For this reason, it often makes sense to lay at odds of 4.0 as your risk is lower than your reward over the short term.
Because of this, you often see the market pause at price changes. Support and resistance can become imbalanced too, as lots of people are keen to place their lay bets. You might also see the market spike downwards if it breaks through a crossover point, as all of the layers scurry to close out of their positions. Psychology is also key for racing trading on Betfair.
Live Action (Streaming)
Depending on the racecourse and the popularity of the event, certain races will be featured on TV, typically ITV Racing, Racing TV and At The Races.
As traders, TV pictures are important to us as they can give us a warning of what might happen in the market. Failing that, they often help us understand why things have already happened in the market…
The most common example of how TV affects racing trading on Betfair is when a horse is acting up before the race. It might be that they are refusing to enter the stalls and trying to throw the jockey off the saddle. In severe cases, the market will almost always react in some way. It’s quite typical to see a horse’s odds drift if the horse is misbehaving before a race.
Here is a prime example:
When a horse misbehaves or ignores cues from the jockey, it suggests that it may not be too obedient in the race. Their odds drift because the market starts to assume the horse now has a smaller chance of winning, especially if the horse has expended a lot of energy prior to the race. Jumping on opportunities like this when racing trading on Betfair can really enhance results. Failing to see them coming can also be quite painful.
Influential Comments Impact:
Whether on TV or on social media, key influencers comments can have a big impact on the market. During TV coverage of horse racing events, owners are often interviewed about their horses.
If the owner says something negative about their own horse, this would likely cause the odds of that horse to drift. That example is pretty rare but is almost certain to impact the markets when it happens. The best examples are when a trainer says something like “we’re just here to get a run in”. Implying the horse has little chance.
Often causing panic for new traders in the market, large bets can influence the direction of the market. The reason behind these big bets is usually always unknown, all we know is that someone with a lot of money wants to back or lay a particular horse. This could be a bookmaker offloading liability or it could be a punter with insider knowledge.
As racing trading on Betfair, it’s important we observe how these big bets impact the market. Watching to see just how much impact the best have on the market is quite telling. Sometimes, the big bet will be matched quite quickly and it will only cause the market to stall for a few seconds. On other occasions, it can send the price into a tailspin. Often this kind of behaviour, when recognised is the start of a tidal wave in the market as the price was headed in that direction anyway.
Related: 3 Simple Horse Racing Trading Strategies for Betfair