Risk to Reward in sports trading?

[Brovashift]

Hi all, might be an obvious question this one but I'll ask it anyway, in case Im missing something.

Coming from a financial trading background experience, trading financials is very heavily focused on positive Risk/Reward.

E.g. risk 100 to make 300 (3/1)

This is to not only makes those individual trades worth taking, but also helps to achieve profitability over time by allowing a 'flexible' win rate.

I am very new to sports trading and the BA software, but I see from placing trades in practice mode, a £10 stake might net me 20-30p. And greening, a fraction of that. I dont need to do the maths to know thats not a positive risk to reward.

However, the difference here is that once greened up its a guaranteed profit, whatever the outcome of the event.
Something similar can be done with financials, albeit a lot more expensive to hedge a position using Futures and Options, but ultimately an advanced method of risk free trading.

Prior to greening, the £10 stake in this example is still in a position of risk... to make at best £1, assuming the correct generous odds.

So I am just curious to know, is the generally negative risk/reward in sports trading I have witnessed... just the way it is? Or is there some other benefits that counters the negative R/R... hedging maybe?
Or is it just my currently inexperienced knowledge of sports trading, and there actually is a way to achieve positive risk to reward i.e. bet 10 to make 20?

Im just breaking everything apart at the moment trying to understand how it all works. I promise I'll put it back together when Im done

Thanks

[ShaunWhite]

I am very new to sports trading and the BA software, but I see from placing trades in practice mode, a £10 stake might net me 20-30p. And greening, a fraction of that. I dont need to do the maths to know thats not a positive risk to reward.

£10 stake isn't £10 risk. You stake £10 with the expectation of making or losing (for instance) +50p or -50p and with skill and judgement if you're positive >50% of the time you're making money.

Exactly the same as finacials, you don't buy £1m of XYZ Plc stock expecting to make £2m or zero, you do it to make or lose £50k. The only time you risk all of your stake is if you let the horse run, eg wait to see if XYZ Plc goes bust or ballistic. The difference with sports betting of course is that if you let the conclusion play out your upside is limited by the odds on offer whereas XYZ Plc could go anywhere.

Sports betting is just buying (laying) and selling (backing). And if you do that profitably then you either buy/sell for the same cash amount each side and end up a free asset (eg a bet on the horse you traded) or by hedging (an opposing bet on the horse you've bet, or the same bet type on all the rest) you assure a profit regardless.

[ShaunWhite]

Or is it just my currently inexperienced knowledge of sports trading, and there actually is a way to achieve positive risk to reward i.e. bet 10 to make 20?

"bet 10 to make 20" ... see above, -10 is your max downside, +20 is your target exit. Stake is irrelevent and could be £10 or £10,000 because you get that back when you hedge.

Or you could just stick £10 on at 3.0 and let it run, ie you'd don't get your tenner back because you haven't hedged and your upside becomes the odds you've taken.

[mcgoo]

If I make 10% on stake I am doing bloody well. From what I have seen of Euler over the years 20-30% is not uncommon for him. On certain tracks if I scalp 25 times I can make anywhere from $3-$20 per race on $50 stakes but I am no expert trader.My 10c -hope that helps

[Brovashift]

I am very new to sports trading and the BA software, but I see from placing trades in practice mode, a £10 stake might net me 20-30p. And greening, a fraction of that. I dont need to do the maths to know thats not a positive risk to reward.

£10 stake isn't £10 risk. You stake £10 with the expectation of making or losing (for instance) +50p or -50p and with skill and judgement if you're positive >50% of the time you're making money.

Exactly the same as finacials, you don't buy £1m of XYZ Plc stock expecting to make £2m or zero, you do it to make or lose £50k. The only time you risk all of your stake is if you let the horse run, eg wait to see if XYZ Plc goes bust or ballistic. The difference with sports betting of course is that if you let the conclusion play out your upside is limited by the odds on offer whereas XYZ Plc could go anywhere.

Sports betting is just buying (laying) and selling (backing). And if you do that profitably then you either buy/sell for the same cash amount each side and end up a free asset (eg a bet on the horse you traded) or by hedging (an opposing bet on the horse you've bet, or the same bet type on all the rest) you assure a profit regardless.

Thanks for this

I can see I am looking at it all wrong, mixing the lines between trading and gambling.
I think my £10 stake can be compared to margin requirement with financials, i.e. the price you pay to participate. But you never risk this full amount.

I can see now why Greening is part of the process.
I just learnt as well that if I find myself at post with an unmatched closing bet always take the SP, so that I am managing any loss of my inital stake... and not gambling it.

What I am also missing that would help add weight to my decisions would be the equivalent of fundamental analysis, but thats me trying to run before I can walk, and I expect to come gradually over time.

I tell you one thing, sports trading is the only thing that makes me want to get up in the mornings