How to Catch a Falling Knife

Learn sports betting strategies and discuss key factors to consider when placing a bet.
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abgespaced
Posts: 176
Joined: Sun Aug 23, 2020 2:25 am
Location: Australia

So there's this situation that often develops in-play in sports. It's when a team dominates play and scores multiple times in a row, making the price either tumble or spike massively away from the previously settled price.

If you take up an early position outside of the previously established price and get matched, you might think you are in a good place, since you were sitting multiple ticks away. But before you can close out your position for a profit, it goes against you. This happens multiple times, until you are staring at a nasty column of red.

This has tripped me up multiple times and is the number one way that I lose my money.

My questions are:

1. How do you prevent this from happening in the first place? The majority of the time, sitting outside the LTP and catching a spike is profitable, since the price often returns. But it's those times that it doesn't return that's killer.

2. What do you do when you end up deep in the red? Closing out after a massive drop or spike can either be sensible play if the odds are going in only one direction, eg. in the final minutes of the game with hardly any chance of return. Or it can be a terrible play to close out if it's only early days and the odds have a very good chance of returning over the course of the game.

Any input on this matter is deeply appreciated. I feel like solving this issue will be one giant step in the right direction.

Many thanks.
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Derek27
Posts: 23477
Joined: Wed Aug 30, 2017 11:44 am
Location: UK

I can certainly relate to that, as most traders will. The two big mistakes I kept making in the early days are not inherently realising that I'm not likely to catch the very bottom of the swing and it's bound to go against me to a degree, and failing to make a proper assessment of how volatile the market is, how much it could go against me and choosing a sensible stake. I'd often see a potential swing and let greed get the better of me but the more you stake the fewer ticks there are between your opening point and a big red.

I now have a clearer agenda of what I'm expecting or aiming at and I'm more decisive about when the plan hasn't materialised. It's quite frustrating when a trade goes against you, you close and it bounces into profit but if I wasn't expecting it to go so far into the red I have to accept that I got it wrong and misjudged the market.
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abgespaced
Posts: 176
Joined: Sun Aug 23, 2020 2:25 am
Location: Australia

Thanks Derek. Interesting point about realising when you have misjudged the market. I've done this a lot. For some reason I got into tunnel vision where I thought that from every spike there will be a turnaround. For many games this isn't the case and that's what gets me in trouble.
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