Understanding value of a trade

[jamesedwards]

Hello everyone,

Can someone explain if I am on a good start here? I am new to trading, reading about it for a few months and only have experience in matched betting.
When trading for example over/under 0.5 goals inplay, opening a trade at 20th minute of a match with score 0-0 , lay over 0.5 goals at 1.12 looking for a no goal in lets say next 15 minutes. Then 35th minute score still 0-0 and available back price for over 0.5 is 1.19. My trade was succesfull and I am in profit 7 ticks.

If my stake was 100 units on 1.12 lay my liability was 12 units
Back bet 94.12 on 1.19 according to calculator with profit being 5.76 after 2% comission.

When I tranlate this to odds it is 17.76/12 = 1.48 and in probability it is 67.5%. If I assumed that the probability of no goal is 80% in this time window this should be a good trade since the risk/reward ratio is on my side.

Is this the correct approach?

Welcome to the forum. This is a fantastic place to bounce ideas and learn how to use Bet Angel to trade.

How do you know the probably of no goal is 80%? Betfair markets are usually very accurate. To win long term you need achieved odds to outperform expected outcome, or a reason to believe the odds available offer value in that specific moment, price and circumstances. Otherwise in the long run you will simply lose by the average value of the spread + your Betfair commission rate.

Long term winners on the exchange will have an edge over the market. Examples of an edge could include; faster pictures, inside info, expert knowledge, expert market reading. What's your edge?

[arbitrage16]

Consider that value is related to probability at the moment of entry.

[ShaunWhite]

All trading is about buying something if its undervalued and selling if it's overvalued, with the expectation that the market will return to mean (neutral value) and you can secure a profit. Any prior position you've built isn't known by the market so therefore should feature in your thinking either except in limitting your overall exposure.

[arbitrage16]

All trading is about buying something if its undervalued and selling if it's overvalued,

Hi Shaun. Is it really? What about pattern recognition in trading? That doesn't seem so contingent on the notion of value.

[ShaunWhite]

All trading is about buying something if its undervalued and selling if it's overvalued,

Hi Shaun. Is it really? What about pattern recognition in trading? That doesn't seem so contingent on the notion of value.

Pattern recognition or order flow or anything else is about guessing where a price will be at some point in the furure. Ie you're stating that you feel the price now is wrong vs where it will/should be (be it in a few seconds or hours) It's overvalued or undervalued now. And with all markets tending towards being more 'correct' then that earlier bet is inherently a value bet.

If you picture bet A being at - 1min and bet B being at BSP then it's probably easier to grasp. Being able to green at bsp is undoubtedly saying you have value. But any times for A and B follow the same principal.

Generally trading movement of any kind is about saying you feel the price now isn't where it will be later, and if later means more correct, then earlier is less correct, ie more value.

[ShaunWhite]

Is this a value trade when looking back at the BSP for first half goals under 0.5 which was 2.94?

You can't look back to test value, only forward. Otherwise you'd just sample all prices and then back or lay when anything was above or below.

Value is where the risk/reward doesn't correspond with the likelihood of that situation happening. Say you stand to gain 10 ticks or lose 100 ticks if there's a goal or not in the next 15 mins. You'd take a position if you felt that goal happening wasn't a 10/1 shot. Same logic as if you saw team A was 2.0 to win and you didn't feel it was a 50% chance.

Tbh the ou0.5 market is more like a straight bet than a trade at 0-0. If there's a goal you've lost it all rather than trading out or at least reconsidering your position.