Tag Archives for Trading

Has Anyone Ever Made A Profit Trading Shares By Spread Betting?

I have never been able to make a profit on shares or indexes by spread betting – I have tried charting following signals etc with out success- should I give up?

Need Advice On Where To Learn Day Trading & Spread Betting & Best Home Software In The Uk?

I wish to start day trading and spread bet on currencies and financial indicies at home. But I am a novice despite reading on the subject. I suppose I need to know if there is a place in the UK where I could go for hand-holding exercises until I get confident.

Need Advice On Where To Learn Day Trading & Spread Betting & Best Home Software In The Uk?

I wish to start day trading and spread bet on currencies and financial indicies at home. But I am a novice despite reading on the subject. I suppose I need to know if there is a place in the UK where I could go for hand-holding exercises until I get confident.

What’s The Difference Between Fx Trading, And Betting On A Sports Match? Its Both About Luck, Isnt It?

both are qualified guesses as well as luck, so whats the difference?

What’s The Difference Between Fx Trading, And Betting On A Sports Match? Its Both About Luck, Isnt It?

both are qualified guesses as well as luck, so whats the difference?

What Is The Difference Between Derivatives Trading And Spread Betting?

A derivative is an instrument that „derives” it’s value from another instrument, like the value of an option depends on the value of an underlying stock share or futures contract.
A spread is the relative value of one instrument to another. They could be derivatives or not. Like long Ford and short GM. You don’t care about how the market does of even the auto industry. You make money if Ford does better than GM.

What’s The Difference Between Fx Trading, And Betting On A Sports Match? Its Both About Luck, Isnt It?

both are qualified guesses as well as luck, so whats the difference?

Lay to Lose on Betfair: Gold at the End of the Rainbow? Truth and Fiction. Part 2

As an example let us assume that our chosen favourite is running in a Novice Hurdle at Kempton and is currently at 3/1 to win on course.
Betfair has championed the use of decimal odds in order to enable the market trading style interface that adds so much to its appeal.
To calculate the decimal odds for a fractional SP add one to the betting shop SP and then 0.5.
Where do we get the extra 0.5?
Well part of the beauty of Betfair is that you are not having to pay the bookmakers for the luxury of being able to place bets on horses. I.e. the bookies overround or profit margin.
So if we place a back to win, all we are doing is setting up an exchange of money at an agreed SP with other punters who are placing money on the same horse but their opinion is that it will lose.
Betfairs margin is a 5% commission taken only on winnings.
We can calculate roughly that our favourite at Kempton will be around 4.5 to back on Betfair.
But to get an actual lay price we have to consider the market spread between the back and lay price.
The market spread, in stock market parlance, is the difference in price between buying and selling a share and equates to the difference between backing and laying a horse.
In order for a book to balance on Betfair it will always be more expensive to lay a horse than to back it, so our favourite at Kempton will be at around 4.7 decimal to lay.
But therein lies the rub.
You lay the favourite to lose at 4.7 and it does so, your winnings are ?1 less the Betfair commission at 5%, so you get your stake back, plus ?0.95. That’s all very nice.
For arguments sake let’s say the contenders do not get up at all.
Your favourite breaks from his torpor and delights the mugs with a sterling win.
Lay Liability = Lay Stake x Lay Odds – Lay Stake
You are left with the entire liability of your ?1 (stake) * 4.7 (odds) – ?1 (stake) = ?3.7 (lay liability)
That may not sound so bad but compare it closely with what you stand to win.
Lets examine what will statistically be the most likely scenario for a given days laying.
From a total of 5 races at 3/1 you select 4 losing favourites and only 1 winning favourite.
Your profit on the day is a magnificent ?0.30 !!
Unfortunately we can see straight away that this is meagre reward for finding weak favourites in 5 races.
It has to also be noted that the favourites are the horses which have the lowest SP’s of all horses in the race.
A deeper analysis of horse racing data taken over the last 15 years shows undeniably that taken across all flat races 33% (1 in 3) favourites at SP do actually win their respective races.
Flat handicaps considered the most unreliable source of favourites in the business go on to win 25% (1 in 4) of their races
The most reliable source of favourites come in NH racing, with 38% of NH races won by the favourite, adding in the handicap factor for NH reduces the win ratio to 30%
So looking to the average for all favourite stats, we can say unequivocally that across the board, approx 1 in 3 UK horse races are won by favourites, yet my earlier analysis proves that you will need to select 4 losing favourites from 5 at 3/1 in order to make an 8% profit.
Anything less will result in a loss.
From a psychological perspective laying to lose creates the reverse situation to a back to win strategy.
When operating back to win you will experience a series of small losses with associated anxiety interjected by the elation of a large win.
When operating lay to lose you will experience a series of satisfying small wins followed by the devastation of a large loss.
With either strategy, results should be analyzed weekly, monthly and yearly.
Horse racing results are by nature highly cyclical, there will be periods of large profit followed by periods of intense loss.
Different seasons, different climactic conditions, different days of the week.
All the usual fundamentals of racing add up to a rich cocktail which cannot be over analyzed in the short term. There are a colossal myriad of factors that can result in long unbroken periods of loss or victory.
The poorer lay manuals (of which there are many) will not talk about the psychology of Betfair strategies, but I personally believe it is extremely important to assess early on whether you are suitable to a trading or gambling lifestyle.
To draw an analogy, some people will keep their money in a high interest bank account, some people will put it in stocks and shares. Where would you rather be at the moment?
Whichever strategy or strategies you decide to develop, you will spending many hours at your computer using an enormous amount of brain power and mental energy.
Racing does entail a good dose of anxiety, faith and hope.
You will experience days where the hours of effort go totally unrewarded.
The amount of mental energy and anxiety that you can expend on the Betting Exchanges is astonishing and really is something that should be factored in by anyone thinking about using Betfair to make serious money.
Lay to lose, and back to win can both be mentally exhausting
To make any pure lay or back strategy profitable will require many hours of research, on and offline, a degree of anxiety and mental debate, a solid staking strategy and a good degree of uncertainty.
To see your entire days work wasted on the last race of the day is not always conducive to anyone with a weak mental constitution.
As explained most of my work is involved with trading, dutching and bookmaking strategies that employ selection systems based on fundamental form research and analysis of historical horse racing data.
My own techniques require the advanced facilities provided by BetAngel Professional
I do not employ pure back or lay strategies myself except for fun.
I do describe a basic „value back to win” strategy on my website
Two colleagues have been following the system and by adding their own contexts have reported significant profits.
In the final article in this series i discuss in more detail my own methods for Betfair success and reveal the best online resources to get you started on the path to long term profits.

Lay to Lose With Betfair – Gold at the End of the Rainbow? Truth and Fiction, Part 1

What is Lay to Lose:
Ultimately trading horse races on Betfair is a direct result of the exchanges providing the facility for a new kind of bet, namely the ability to back the loser or losers of any given sport or event as oppose to attempting to find the winner.
In terms of horse racing, this facility is known as „laying” a horse to lose.
Just to clear up any confusion, technically speaking, laying is feasible even in a traditional bookmakers setting.
One would have to apply a „Dutching” technique, i.e. backing several horses to win a race to produce a set amount of profit by using variable stakes.
To lay a horse using this mechanism you would just have to leave the horse you want to lose out of the Dutch, and back all the others.
Notice how I say „technically” possible, because to attempt to do this sort of advanced mathematics while sitting in Corals or William Hills one would have to be some sort of autistic savant and you would probably attract some very suspicious looks from the staff.
The clever chaps at Betfair have setup a system so powerful that all the complex maths has been made totally unnecessary, and the Betfair interface presents you with a simple decimal representation of the proposed odds for „laying” your desired selection.
On first glance new Betfair players often assume that making a profit by laying horses to lose should be a much easier proposition than trying to find those „oh so elusive” winners.
The problem is that of course, as with anything that looks too good to be true it usually is, and this case is NO exception.
I will state boldly from the outset.
Making a profit from laying horses to lose is no easier or harder than backing horses to win. What is different is the mode of operation you must employ to find your candidates.
Seasoned professionals who attend the race meets at which they place bets can and do make consistent profits from identifying horses that look out of sorts for some reason directly before a race.
The problem here is that you can only be at one race event per day while there will be several happening all around the country every day.
For advanced traders with a serious budget, Satellite Information Services can make a big difference to spotting pre-race fundamental issues with form, but the problem with SIS is that it does not always focus on the the same horse as you.
Anyone adopting a lay to lose strategy will need to employ techniques and systems just as advanced and time consuming as any back to win strategist.
So what is the problem with a „lay to lose” strategy.
Basically the problem is exactly the same as a „back to win” strategy and that is, that without being able to visually see a horse as it comes into Tattersalls and goes down to the stalls, it is not possible for the average punter to truly assess the viability or otherwise of their chosen steed.
You will have seen the professional layer at a horse racing event.
They will be watching their quarry closely in the paddock and will be comparing the top 3 or 4 contenders and assessing whether the favourite is a true „take on”.
This is what they do each and every day.
If the favourite:
* looks nervy,
* has jumping eyes,
* is over-sweating,
* is foaming,
* has his head down
* refuses to gallop or trot properly,
then the close competition should be closely examined for the opposite traits, which may include:
* shiny glossy coat,
* bright steady eyes,
* showing off a nice canter
* ears pricked up.
The professional layers are waiting for all this information to tally up right before the race before getting their lay to lose bet on the unlikely out of sorts favourite.
By getting in before the average punter, the TV cameras, and the on course bookies and pundits, the professional layer can get the price and the size of bet that allows them to profit from this type of strategy.
The professional lay bettor will also frequently operate an inplay strategy by watching the horses closely during the race.
Particularly of note to lay bettors are:
* the way they are jumping over fences and hurdles,
* their overall position in a race at a certain distance,
* comparative data from previous races,
* whether the horse is a front runner,
* Whether the horse is a late finisher,
* whether the jockey is a bridle jockey.
The question is how you, as an average punter can compete against the professionals, the bookmakers, the market and Betfair.
The answer of course is that you have to be better than most of the rest and this is something that takes time, effort and dedication.
Only you can find out who is and who isn’t up to the job.
One has to take ones own style, personality and attitude to loss and profit fully into account, when entering into a pure back to win or lay to lose strategy.
Without seeing all the horses directly before a race it is very difficult to predict in advance which favourite will win or lose a race.
If your chosen horse wins after placing a lay to lose bet you have to pay the entire liability for the rest of the field.
As I detailed earlier when laying to lose you are technically setting up a Dutch that backs to win every other horse in the race with wagers designed to return an equal amount independent of the actual winner.
Should the horse that you exclude from the Dutch win then essentially you are paying for every other horse in the race.
There is also one point which i personally consider highly significant with respect to Betfair, and that is that a great deal of the initial attraction of Betfair is that the odds that it offers the average punter in terms of bet to win are significantly higher than those available in the betting shops.
The problem here is that on closer inspection you will see that as the odds for back to win are higher, and we then have the market spread to consider before we reach the lay prices, the lay prices offered are in fact quite poor and statistically worse than would be offered if a betting shop offered lay to lose options.
In Part 2 of this article I examine more closely why a pure lay to lose strategy can be poor value for the average punter.

Betfair Horse Racing Fundamentals and Bet Angel Technical Analysis. Part 2

Lets start with a close examination of some official statistics relating to Betfair.
1. On average, starting prices are between 10 and 15 % higher than with traditional bookmakers.
2. Ten times more people make a profit from gambling on Betfair than they do from gambling with traditional bookmakers.
3. People who do lose overall from gambling on Betfair lose less than they do with traditional bookmakers.
4. Around 90% of people with a registered Betfair account still lose money overall.
Fact 4 will of course have left you feeling rather disappointed, but personally I deal with reality rather than hype. If you take the opposite view then you will learn the hard way.
So there it is. For all the extensive marketing, for all the plethora of systems, marketing and hype selling you the gold at the end of the Betfair rainbow story, the reality is that 90% of people with a Betfair user account are in overall deficit.
So that the bad news, but only the beginning of the story.
The truth about your chance on Betfair lies in the detail, somewhere in between the 4 facts above as stated.
Lets pause for a minute and examine the 4 brave statistics in greater detail in the context below.
* How many of those 90% of punters are serious players?
* How many of the 90% are just fun punters backing the national?
* How many have just placed a few bets then never gone back?
* Almost every punter will be in deficit for some time before they crack the Betfair code.
* No punter has ever opened a Betfair account and simply started winning.
* Within traditional bookmaker settings, 99% of punters lose money.
As i stated in the initial 4 statements, you are in fact ten times more likely to make a long term profit via Betfair rather than betting in shops.
Also, lets address liquidity.
The massive marketing and hype surrounding the platform is extremely good for Betfair, the more short and medium term fun punters entering and joining the ecosystem for the first time, the better for everyone.
The Betfair platform is groundbreaking, powerful and highly addictive.
The technology is state of the art, highly innovative and reliable.
The concept of generating a single figure price to lay horses to lose, is truly unique and original.
Betfair does generate enormous and ever increasing liquidity.
The extent of this liquidity is such that traditional bookmakers quickly cottoned on that they themselves could hedge against large losses while still on course if their own books start to drift out of balance.
On the bigger races you will see a lot of serious action coming onto the exchange in the last minute of trading when the really big players and on course bookies are placing their bets or balancing their books.
This is a really dangerous time to have trades open in the market.
Many basic trading manuals will try to persuade you that trading is somehow risk free. That it is somehow not gambling, obviously this is untrue.
While you are not strictly gambling in the same sense that you would gamble on the winner or the loser of a horse race, you are still gambling that your predictions about the future movement of a horse’s SP is going to move in the direction that you require.
It stands to reason that if your prediction is incorrect the only possibility will be that you will lock in a loss instead of the profit you wanted.
As oppose to having „won” before the race has started, you will have „lost” before the race has started.
All experienced traders will tell you of the misery experienced when trades move against you in this way.
Trying to move onto the next race knowing that whatever the outcome of the previous race you can only lose money, is a challenging scenario to say the least.
What can often happen to untrained or first time traders is that in the heat of the moment they will make rash decisions and turn to „pure gambling” in an attempt to rectify losses and mistakes.
All I will say is of course, naturally, just don’t do it.
Never chase losses.
If you have a problem accepting short or medium term financial loss then this is the wrong career path for you, you should go back to fun punting and where possible keep your money in a secure bank account (difficult to find these days).
Once you start making poor decisions that are not based on rules, experience, fundamentals or technical analysis then you are gambling.
You will lose money and the attractions offered by Betfair will soon wear thin.
So who exactly are the mystical 10% of regular Betfair account holders who are taking everyone else’s money.
Well what we do know is that they are:
1. Full and part time professionals
2. Experienced gamblers who adopt a variety of different trading approaches dependent on circumstance.
3. Vary their strategies and use a host of information resources on and offline.
4. Use all the tips and tricks available to their advantage.
5. Have huge resource in terms of hardware, software, use large pots and recycle large trades through the market.
6. They employ Bet Angel’s custom designed technical analysis software to give them the edge over the market.
7. They use SIS and high speed feeds to take advantage of up-to-date news and inplay action.
8. Practice, hone and develop their skills and learn from their own mistakes.
9. Practice a „series” of rigid systems that DO NOT ALLOW FUN BETS.
10. Perfect their skills on one system and one sport, before moving onto another.
In my next article I will outline the various betting mechanisms available through Betfair.
Why they are so exciting and innovative, and why a lot of punters looking for long term profitability often start with Trading.
There are also punters making consistent profits making books and my personal favourite, Dutching with Field Reduction.
I examine basic gambling strategies, backing or laying single selections to win or lose.
They are an innately higher risk, higher reward, type of strategy that can work, but only if a professional system-based approach with extreme specialization is adopted.