Build position or hedge ?

[whodareswinsall]

Maybe a silly question but what would you suggest when trading / scalping horse racing pre off?
If trying to make a few trades in and out, what’s better to hedge after each trade or build up a position and then hedge just before the off ? Obviously build a position if the odds are going your way would be the best but more looking to see if any advantage of either way Over the longer term ?

[sa7med]

Both are viable strategies depending on the market. Scalping is more suited to stable markets where as swing trading is more viable in volatile markets.

[spreadbetting]

Maybe a silly question but what would you suggest when trading / scalping horse racing pre off?
If trying to make a few trades in and out, what’s better to hedge after each trade or build up a position and then hedge just before the off ? Obviously build a position if the odds are going your way would be the best but more looking to see if any advantage of either way Over the longer term ?

If the odds are 'going your way' you'd be much better off swing trading those bets rather than scalping a tick or two.

Generally with scalping you're not looking at predicting the overall direction, so in reality building a position and closing in one will end up being swings and roundabouts as to whether you'll benefit for individual trades but over time it's likely to be no difference. Both have advantages ad disadvantages and you should choose which suits you're mindset best because there's unlikely to be any real monetary benefit of one over the other when scalping. With taking a profit after each trade you may feel reluctant to give away 'profit' if the next scalp is looking red and may possibly hold onto trades too long, if so cashing out at the end of your scalping may be the best way forward.

[whodareswinsall]

Thank you for your replies. I understand about the difference between scalping and swing trading. I was trying to establish if it was better to keep greening after every single scalp or build up a profit before scalping just before the off . I noticed in Peters videos he mainly hedges just before the off not after every scalp . I could not see if there would be any long term advantage to either .

[spreadbetting]

I think Peter is more swing trading rather than scalping so he'll be continually assessing the market as to whether he needs to move/cancel offset trades etc It's much easier to do that with level stakes rather than moving around offset bets with adjusted stakes which may no longer level out when the odds have been changed. For most scalpers they simply have the offset triggered by the original bet and have that stake auto set to level out the profit. If you're also tinkering with offset bets you'd also be better off simply using level stakes and hedge once you've finished trading the race.

[Emmson]

Fairly sure Peter has explained in a video a few years ago why its best to hedge after all your trading is completed.

[ShaunWhite]

Fairly sure Peter has explained in a video a few years ago why its best to hedge after all your trading is completed.

I don't see how it makes a difference. Unless you're fortunate enough to be able to choose whether it's going to be at a higher or lower price.

The only other consideration I can think of is outages, hedging at the end very slightly increases the chance of it being a free bet/lay vs being hedged if you didn't manage to get your hedge transaction in.

[rik]

pretty sure its best to evaluate each bet separately doesnt matter if your opening or closing a trade. if you dont think your closing bet is a good bet because your expecting the price to move further wait until right before the start of the race to close your trade, cant advise to close a trade in running if you dont have a good reason to

[eightbo]

no reason why you can't scalp with a bias, dip in and out and catch the occasional 10+ tick move. direction or distance doesn't instantly mean swing.

back to the topic:
- lower price = more profit hedged
- 1 hedge is more efficient than multiple if you're taking the offered price
- easier on the brain for some to close things up after each scalp
- you can use liability staking to reduce the ££ you're having to hedge, alternatively tweak your exit stake based on the figures in the P&L column if you're using traditional staking (lay exit profit = original stake + hedged profit ; back exit profit = original stake - hedged profit ; reverse is true for losses)

so if price is steaming and you think it's 51% or higher likelihood to continue then your hedge would be most effective once at the end and if it was 51% or higher likelihood drifting you should hedge sooner rather than later. It's all small amounts compared to 1 tick of your actual trade though

[jamesg46]

Just to have my 2 pence, personally I think it's good practice to leave the hedge until the end. If you're scalping, then I would assume that best execution is to have orders waiting in favourable positions across multiple runners, if you're not that advanced, i'm sure at some point you will be, then hedging after each trade would only cancel all orders sitting waiting. Start as you mean to go on imo... having said that, i'm shit at it so dont take my advice. Peter has done some good videos on scalping & I've noticed Peter always hedges after his trade(s) are complete in that market.

[Hunter84]

Is it ever beneficial to NOT hedge?

Say you are sitting on a profit on two clear favourites and you feel like one of those is going to win?

[ShaunWhite]

Is it ever beneficial to NOT hedge?

Say you are sitting on a profit on two clear favourites and you feel like one of those is going to win?

Winning or not on one race doesn't really matter in the long run, what's more important is their chance of winning being better than BSP.
If it's a value bet then you wouldn't necessarily hedge all of it, otherwise you would. The problem is never knowing if you have a value bet unless you monitor your actions over 100s of runners. But as BSP is 'correct' over a large sample then hedging is the sensible option if you don't want unnecessarily large variations in your PL caused by straight winners & losers.

It also wouldn't be usual for you let all of your trading stake run as those are usually much bigger than your 'normal' bet stake, because trading is about leveraging your money, ie putting far more down than you might actually expect to lose.

[Hunter84]

Thanks.

[ShaunWhite]

Edit of above "It also wouldn't be usual...." should be "It also would be usual...."

[Diacritical Quark]

If the odds are 'going your way' you'd be much better off swing trading those bets rather than scalping a tick or two.

Generally with scalping you're not looking at predicting the overall direction, so in reality building a position and closing in one will end up being swings and roundabouts as to whether you'll benefit for individual trades but over time it's likely to be no difference. Both have advantages ad disadvantages and you should choose which suits you're mindset best because there's unlikely to be any real monetary benefit of one over the other when scalping. With taking a profit after each trade you may feel reluctant to give away 'profit' if the next scalp is looking red and may possibly hold onto trades too long, if so cashing out at the end of your scalping may be the best way forward.

I already know I cannot scalp, I don't have the mindset for it. I decided today to have a little go at swing trading as it's not something I've really explored before. I've actually posted some great returns, to the point it would be close to outperforming my bot with a bit of honing, only issue is I've been taking what I perceive to be value bets anywhere from 25-15mins before the off. Now with £2 stakes this isn't an issue, however do the pros who swing trade for a living wait until the volume picks up a little and is usually done in the same timeframe as scalping?