How much money do I need to start trading on Betfair?
It’s a common question amongst newbies…
But one of the most misplaced too. Money makes money easier, right?
In some cases yes. But actually, on Betfair it’s easier to make ‘some’ money fast with smaller stakes and lower risk.
In this post I’m going to explain:
- Why it’s easier to profit with smaller stakes
- The reason there is less risk involved
- How you can get a quick return on a small bank
Why it’s easier to profit with smaller stakes…
Many make the links between other types of trading and trading bets. It’s a reasonable assumption to make, although not necessarily true.
Betting exchanges aren’t as scale-able as the Forex markets you may have read about, although that doesn’t mean there isn’t a ton of opportunity in them. There is!
The difference being, because of the lower turnover in comparison you don’t need to use similar staking. On Betfair and Betdaq it’s really quite easy to get a small stake through the market quickly for a decent % return.
As your trading progresses and stakes increase you quickly realise some edges aren’t so easy to scale. Of course the best ones are, but there are many little opportunities that happen on a regular basis where you can pick up a couple of quid.
Ignoring them would be foolish…
Not only do does it mean there’s more opportunity on offer in terms of playable situations but the use of smaller stakes limits your exposure.
There’s less risk…
Exposure within the market is limited when things goes wrong, making exit easier.
Being able to exit without having to chase the loss up or down the ladder makes a big difference to your bottom line. It’s been said many times over but, if you effectively manage your risk within the market then profits will eventually surface. Unfortunately it usually falls on deaf ears as everybody is just thinking about profit, profit, profit!
Using smaller stakes increase the chance of getting fully filled at the price you want, and of course your overall success.
That goes for profitable trades as well as losing ones. It’s a win-win proposition.
Also as you go up the stakes ladder you realise that, on occasions, your stakes will affect the market. Not always, but trying to exit a bad trade with a larger stake is hard. Just think about it for a second, any full-timer will tell you. If you’re struggling to get a bet filled the chances are because you don’t represent value within the market. So by being on the bad side of a trade with a large stake can turn into a real head-ache.
With a small stake you’re far more likely to go un-noticed.
How can you get a quick % return?
All of this is great. But how do you get that quick return on a small bank?
Aside from the benefits already mentioned, trading on lower stakes make it easier to participate in lower-liquidity markets.
One of the quickest ways to get a boost on a small stake is by picking your opportunities carefully within a illiquid market. Offering a bad price and catching a spike can represent extremely low-risk winnings at times. Patience however will need be one of your favourite things! it takes time…
Another quick-win is to turnover them small stakes faster, making use of market turnover in the process. I think it’s quite common this doesn’t appeal to many though as it’s like picking pennies up in-front of a steamroller (the market). One of the positive points being if you lose, you only lose pennies too!
Related Post: 3 Simple Horse Racing Strategies
This older YouTube video is a prime example of profiting from small stakes without much risk.
It’s against our nature to, but remembering to take the longer-term approach is key. It’s too easy to get caught up thinking that ‘well I only made £2 from that race’. But if you made that £2 without taking much risk it’s the right thing to be doing.
Those £2 wins soon add up and multiply a small bank fast, and so £2 wins eventually become £5 and so on. The important part is to make the most of everything on the way, limit the risk and take all the opportunities the market offers you instead of just looking for the big ones! The bigger ones tend to be harder to find…
You need to master winning on a lower scale first too, from a mentality perspective. Accepting the strain of using bigger stakes and experiencing bigger wins and losses on your profit and loss sheet is tougher on the mind.