How to Make Money on the Betting Exchanges

Our Golden Rules of Trading

There are many ways to trade on the exchanges. This is a guide, which has been designed through time and experience to offer a methodology and way of working to minimize the risks associated with trading on the exchanges. The methods and recommendations mentioned are insights that we use as a base methodology in markets where we have no inside information to help us. This guide is intended as a helpful insight into trading on the exchanges. Please be aware that these methods are no guarantee of your success and should be viewed as a guide only. We have no control over how you implement these strategies and you do so at your own risk.

1 The Basics

In order to trade correctly you must firstly have an understanding of the basics. Once you have your account we suggest you familiarise yourself with how each site works. Betfair have a number of very good tutorial videos that cover all aspects of using their site.

2 Your Betting Bank

Similarly to any betting endeavor, we recommend that you use a betting bank of your own. Decide for yourself how much in total you want to place in your account to start and then trade a percentage of your total betting bank on each trade. A sound philosophy that we use is to never trade more than 10% of our total bank on any event. The reason for this is that it will protect you from making serious mistakes as you learn the ropes and understand more through your trading.

3 Backing and Laying

In order to create a “no risk” outcome we are looking for one of two scenarios. A selection that is priced too low and will drift out in price or a selection that is priced too high and will contract in price. Unless you are privy to inside information it is best to concentrate purely on selections that are priced too low that you expect to drift in price. The reason for this is that you will have the “in running” option as a potential back up. Without inside information to guide us we always LAY first.

4 Always Use “In Running” When Making Your Trade

Assuming you have “Layed” first, the next part of your trade is to “back” your selection. When you place your “back” you need to set your instructions to “Keep in Running”. Doing this means that if your “back” trade has not been accepted before the race, you could still have it matched during the race. If you ever have a trade in play and leave your computer, the “Keep in Running” option could often come to your aid. This option can also be helpful if for any reason you find yourself offline when your chosen event is taking place.

5 Choosing an Event

Generally the events to avoid are small fields with less than 10 runners. Maiden races with little or no form to go on and events over sprint distances. Events with small fields offer fewer horses to trade on and consequently a reduced chance of swings in price. Maiden races often have strong support for certain horses, particularly from top stables, meaning that you could easily find yourself on the wrong side of a trade. Sprint races are avoidable because you can get horses that are never threatened if they get a fast start. In these cases it can make the “in running” trade unmatchable.

6 Avoid Front Runners

One of the major rules is to avoid trading on front runners. You can identify front runners from the racing post/sportinglife form guide. The reason we avoid front runners is because if you don’t achieve your trade pre-race you may not get the opportunity to do so “in running” if the selection leads from start to finish.

7 Set Your Goals

We set ourselves small goals when trading. For example assuming a small trading profit of just 3% each day, we would double our trading bank within a month. Assuming a starting trading bank of just £100, and similar results each day, it would take us less than eight months to turn our trading bank into £100,000 plus. Small steps can achieve big results.

8 Plan Your Trading Day and Stick to Your Plan

The way we approach the trading day is by firstly ruling out all the events that fail to meet our minimum criteria. If we have no inside information for these events we will rule out small fields of 10 or less, maiden races and sprint races. We are then left with our events list for the day. It is from these events that we will place our trades. A simple scouring of the markets will give us an idea of which horses are priced too low and are more than likely to drift. We concentrate on these events and these alone. Do not be tempted into trading on all events just for the sake of it.

9 Don’t Get Greedy

Always stick to your plan as a profit is a profit however small. The fact is that if you achieved a 10 – 11% profit on your trading bank each time you did a days trading you would double your money roughly every week.

10 Be Patient

Patience is all important when it comes to trading. If there are no obvious trading opportunities available then don’t trade, there is always tomorrow. Don’t trade just for the sake of it and don’t get greedy, stick to your plan.

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