Trading on Betfair for a living

[Iron]

Hi Steve

Some excellent pieces of advice IMHO!

Before you make every trade you need to set a point that you will exit, don't set this too tight. A 2 or 3 tick's is no good. But you need an escape route.

With trending markets, exits aren't too hard IMHO, as you can use moving average crossovers, 'exit when the highest/lowest point of the last x bars is breached' rules, or wom averages. The main thing is to let profits run and cut losses quickly.

But what I find challenging is to know when to exit right away in ranging markets, and when to wait for the market come back to me. I find that, when I don't exit right away, the range quickly often turns into a trend, and I lose several ticks! So perhaps the best option is for me to place a conservative game, and scratch my trade right away.

Jeff

[mugsgame]

I was trying to put it in the simplest possible terms.

moving average crossovers, 'exit when the highest/lowest point of the last x bars is breached' rules, or wom averages

WTF does that mean? LOL, You are a lot cleverer than me my friend.

This stuff has no place whatsoever in racing markets. IMHO. Horses are living, breathing and unpredictable beings. Things that trigger market moves in racing do not exists in stock markets. The stock market doesn't create a 100% book either. I suppose if those tools work all well and good, but for most they won't, although they can give back up to what you already know is happening. If you read the market well you will know what is potentially going to happen before the graph shows it. But then does everyone else.
The point I was trying to make (I find things I want to say difficult to write coherently as you can see ) was learn how the price move in 1 runner has an effect on the other runners. You don't need that stuff, Honest. It complicates things that are already complicated.

If you are scalping then taking a 2 tick loss is fine, but it's rare you win more than 2 ticks. I'm talking about making 30 ticks and £500 -£600 a trade potentially. If you watch how a swing manifests you will see what I mean. The graph is like a dinosaur's back (zig zag) so taking a 2 tick loss will get you nowhere.

It's good to debate these things, I'm sure everyone has their own thing that works for them. There is no right or wrong I guess.

[freddy]

I agree, I use nothing to trade other than the info on the ladders.

when i first started i was obsesed with high tech charting options and all that stuff ,
turns out i didn't need them.

It just over complicated things for me.
Not saying these things are not useful to some people,
just my opinion .

[oddstrader]

I must give credit to the original poster (trader1978) for this thread as its presented trading in a much more postive light than we normally do, i must admit i am the first to whinge on here when the day is slow or BF is acting up but when its flying im off enjoying the rest of evening and i think many of us are similar and the negativity can often put prospective traders off, so well done to trader1978 for getting us to offer up our side of the trading story.

[Iron]

moving average crossovers, 'exit when the highest/lowest point of the last x bars is breached' rules, or wom averages

WTF does that mean?

What it means is that if the market moves significantly against you, you get out sharpish, and if it doesn't, you stay in! This is basic trend following!

Take the attached chart.

Had you used moving average crossovers (ie entering and exiting when the moving averages intersected), you'd have caught some nice trends.

Had you exited your trades on the highest point of the last 3-5 bars in a downtrend (vice versa in an uptrend), you'd have also done nicely out of the trend. That's what I'm referred to by a high/low point breach.

By 'wom averages', what I mean is to exit when the average wom shifts below the line, to avoid being knocked out of the market by very short-term wom shifts.

LOL, You are a lot cleverer than me my friend.

I don't know about that! And intelligence isn't always an advantage in trading - I once read that, as a group, traders are in the top 10% of the population intelligence-wise, yet most lose money consistently!

IMHO, the best traders are often the guys who find something simple that works, and stick to it to the letter, without trying to be clever and out-think the market!

Horses are living, breathing and unpredictable beings.

So are central bankers, and they've been known to move markets...

Things that trigger market moves in racing do not exists in stock markets.

As with horses, the financial markets are driven by people's opinions of what's going to happen, by traders and speculators making emotion-based decisions, by news, and by traders trying to trick each other. So they aren't that dissimilar...

The stock market doesn't create a 100% book either.

True, but I just don't see that difference as significant.

Just as one favourite might (or might not) steam because the other drifts, gold might rise because people are transferring their money away from government bonds. But as a technical trader, you don't need to know that - all you need to do is recognise what the market you're trading is telling you, and respond accordingly.

I suppose if those tools work all well and good,

They do (at least in the financial markets!). BTW, although the majority of people in this forum seem to be scalpers, I do know a successful technical trend-following Betfair trader, so it can be done.

If you are scalping then taking a 2 tick loss is fine, but it's rare you win more than 2 ticks. I'm talking about making 30 ticks and £500 -£600 a trade potentially.

So am I (although my profit wouldn't be that high - yet!).

As an aside, one thing I've toyed with it just trading horses under about 4.0. Whilst I'd have fewer trades, lower-priced market do seem less volatile and easier to read.

Jeff

[mugsgame]

Thanks for that Jeff.
Too rich for my blood lol.

There is one thing i'd strongly disagree with.
I said the stock market doesn't have a 100% book, you don't think that is significant?

I think the majority of traders fail because they think they need to master the type of stuff you have mastered. That really isn't the case.

I enjoyed reading your post though Jeff.

[Iron]

Thanks Steve.

I agree that people over-complicate trading (although I would argue that the techniques I'm referring to are straightforward). I wouldn't say I've mastered those techniques, btw - if I had, I'd be a pro trader myself!

All I want to be able to do is to trade successfully. I'm not too hung up on which techniques I'm using, as long as they work. I'd ditch the charts and just use the ladder if I knew how to make it pay!

As regards the book percentage, although I don't look at it myself, many traders (including Adam Heathcote) do. So I would have to concede it can be used as an indicator. That said, I'm not sure it tells you anything that the other indicators don't tell you. Correct me if I'm wrong, but all a tightening book percentage says is that 'the market is at an impasse', which is also reflected in the price action.

Jeff

Thanks for that Jeff.
Too rich for my blood lol.

There is one thing i'd strongly disagree with.
I said the stock market doesn't have a 100% book, you don't think that is significant?

I think the majority of traders fail because they think they need to master the type of stuff you have mastered. That really isn't the case.

I enjoyed reading your post though Jeff.

[Iron]

Hi Freddy

Do you not even use the graph produced by Betfair, so you can see whether the market is steaming, drifting, ranging, etc?

Jeff

I agree, I use nothing to trade other than the info on the ladders.

when i first started i was obsesed with high tech charting options and all that stuff ,
turns out i didn't need them.

It just over complicated things for me.
Not saying these things are not useful to some people,
just my opinion .

[mugsgame]

As regards the book percentage, although I don't look at it myself, many traders (including Adam Heathcote) do. So I would have to concede it can be used as an indicator. That said, I'm not sure it tells you anything that the other indicators don't tell you. Correct me if I'm wrong, but all a tightening book percentage says is that 'the market is at an impasse', which is also reflected in the price action.

I don't use it as an indicator, You can take it as gospel that 99% of UK racing markets (the more liquidity the more efficient) are 100% books, give or take 0.5%.

The reason I make reference to it is to try to make the point that the market runners have to maintain that 100%. Going back to the race I mention, if you can isolate a race to 2 runners, then 1 moves in and the other out. It is impossible to miss this. If you have a market where 4 runners are all priced at 4, the waters are muddied. It is likely that to get a profitable trade is more difficult.

I probably think I was wasting my time trying to explain the method. I doubt there are many with the discipline to wait for the opportunity to present itself.

Take soccer as another example. I spent a while showing a friend how to take advantage of the certain points in a match where the time decay moves odds very quickly. With modest stakes and very little risk it is possible to make in 3 minutes what he earned in a week. He couldn't do it. That is because he used the method I showed him indiscriminately throughout the match, he blew his bank in 3 matches, then said the method was shit. He didn't have the discipline to wait for the opportunity to arise, he wanted to force an opening that just wasn't there........Tosser lol.

[Iron]

The reason I make reference to it is to try to make the point that the market runners have to maintain that 100%.

So far I agree.

Going back to the race I mention, if you can isolate a race to 2 runners, then 1 moves in and the other out. It is impossible to miss this.

True, but unless you're trading both horses, I don't see how that knowing that gives you an advantage.

If I can see that Horse A is drifting, I don't see how knowing that Horse B must be steaming helps me.

Take soccer as another example. I spent a while showing a friend how to take advantage of the certain points in a match where the time decay moves odds very quickly. With modest stakes and very little risk it is possible to make in 3 minutes what he earned in a week.

Are you confident that you would have an edge over 1,000 trades with that approach?

With trading, you will only profit long-term by exploiting market inefficiencies (unless you're 1 tick scalping). And I'd have thought that the in-play football markets would be extremely accurate, given the vast number of market participants. Or are these moves irrational (for example, because people assume a team is home and dry when it isn't)?

Jeff

He couldn't do it. That is because he used the method I showed him indiscriminately throughout the match, he blew his bank in 3 matches, then said the method was shit. He didn't have the discipline to wait for the opportunity to arise, he wanted to force an opening that just wasn't there........Tosser lol.

That's a shame, but at least you tried! It sounds like he doesn't have the temperament needed to succeed in trading. As a famous trader once observed, everyone gets what they want out of the market...

Jeff

[freddy]

Hi Freddy

Do you not even use the graph produced by Betfair, so you can see whether the market is steaming, drifting, ranging, etc?

Jeff

I agree, I use nothing to trade other than the info on the ladders.

when i first started i was obsesed with high tech charting options and all that stuff ,
turns out i didn't need them.

It just over complicated things for me.
Not saying these things are not useful to some people,
just my opinion .

No not really, i might have a quick glance at it but thats it,

On the ladder you have the matched money amounts at varius odds and that plus being able to see exactly whats going on with the other horse's at the same time is all i need.

If something is streaming then something is drifting or vise versa like mug says

[mugsgame]

Are you confident that you would have an edge over 1,000 trades with that approach?

Yes, the strategy I am talking about is a guaranteed swing. The only consideration is your entry and exit points, and the expected time you are in the market. If timed right we are talking 20 ticks plus in a minute in certain conditions. It has nothing to do with anything but time decay. I don't really want to spell it out, but the simple things are the best. No graph, No cross over points, just watching the match, understanding what is happening in the match and how the market will behave given certain conditions. Like I keep saying, understanding your market is very important.

True, but unless you're trading both horses, I don't see how that knowing that gives you an advantage.

If I can see that Horse A is drifting, I don't see how knowing that Horse B must be steaming helps me.

The point is Jeff. Most cannot see when a move is happening. If they did they would all be pro's too. All I am trying to do is give a point of reference as to how a move will manifest. Think your missing the point here fella.

[Iron]

Yes, the strategy I am talking about is a guaranteed swing. The only consideration is your entry and exit points, and the expected time you are in the market.

Interesting... I'll have to get Guardian to monitor a couple of matches, and see if I can work it out!

All I am trying to do is give a point of reference as to how a move will manifest. Think your missing the point here fella.

I think we may have to agree to disagree on this one.

Jeff

[mugsgame]

I think we may have to agree to disagree on this one.

I have made a living trading for 5 years, but hey, what do I know?

[crossing_along]

Hi,

Abaut initial subject ,I think that if more and more traders go succesfully long term people will have no problem telling ''the real job'' . But when traders like Adam Heathcore quit trading for a living .this really rise some questions .Ofcoure we can assume that he is just a person who decided to switch to a real business , but after reading some of his statements we can easily get the picture of how easy/stress free can be to become a trader... In my opinion the main issue with full time traders is the fear of many losses in a row , were chase losses may occur and disaster strike ; or very long losing runs when our bank diminish and wipe the previous weeks/month profit ,etc . No edge can last forever . Now lets see how we will find a job.and what friends and family will think abaut you.. Although Betfair has changed over time only few can profit from newbies - middle traders errors.