The Basic Guide to Betfair Sports Trading

 

 1. What Is Betfair Sports Trading?

In simple terms, Sports Trading is the matching of your own bets through the medium of a betting exchange in order to secure a guaranteed profit no matter the outcome of the event you are trading.

Sports Traders are typically more concerned with how the odds change before or during an event rather than what the actual outcome of the market they’re trading on is.

Perhaps an easy example to visualise is one on football.

Let’s say that before their match has started you have backed Man Utd to win the game on the Betfair Exchange at odds of 1.80 (or 4/5 in fractional odds).

Fast forward to 60 minutes into the game and Man Utd are leading 1-0 and their decimal odds to win are now 1.20 (1/5 in fractional odds).

Well, instead of waiting for the match to finish up and therefore awaiting the outcome of your back bet on a Man Utd win to come true you could lay Man Utd to win at odds of 1.20 (1/5) – that is to say, that you are now betting that Man Utd won’t win the match.

The difference in odds of 1.80 (4/5) and the drop to 1.20 (1/5) due to Man Utd now being 1-0 up provides the opportunity to profit from the game by hedging our bets, no matter whether Man Utd go on to win, draw or lose the match.

You would be taking a smaller profit than if you were to wait for the match to end and Man Utd did actually win, however we all know football isn’t always as simple as that. By trading out we are eliminating any risk we had with the stake placed on Man Utd to win.

So, if the game finished and Man Utd actually ended up drawing 1-1 (as so often happened in the 2016/17 season) then you wouldn’t be concerned as you’d have already secured your profit.

This is the beauty of trading.

2. What Sports Trading Books Are There to Read?

Yes, there are two that are specifically written with the goal of teaching complete newcomers to sports trading the very basics of it.

These are:

Mastering Betfair: How to Make Serious Money Trading Betting Exchanges – Pete Nordsted

Essential reading for anyone serious about making money from Sports Trading. Taking you through low-risk strategies that can be used by anyone to profit from the markets, Pete Nordsted also teaches about the discipline needed to be a successful trader.

Mastering Betfair- How to Make Serious Money Trading Betting Exchanges - Pete Nordsted

Sports Trading on Betfair: Profitable Betting Exchange Systems for Trading on Betfair and Betdaq – Wayne Bailey

Perfect for those new to Sports Trading, Wayne Bailey provides the reader with an overview of the dynamics of a Betting Exchange such as odds movement and how and why the prices move. Included are some strategies Wayne uses to profit from the Football and Horse Racing markets himself.

Sports Trading on Betfair- Profitable Betting Exchange Systems for Trading on Betfair and Betdaq - Wayne Bailey

3. Why Does Sports Trading Use Decimal Odds?

Quite simply, for two reasons:

  • They’re easier to read
  • Decimal odds are more exact

For more information, check out the 40 second video from Betfair below:

You can expand the accordion below to find our Fractional Odds to Decimal Odds conversion table.

FractionDecimalFractionDecimalFractionDecimal
1/101.101/1 (Evens)2.005/16.00
1/91.1111/102.1011/26.50
1/81.126/52.206/17.00
1/71.145/42.2513/27.50
1/61.1711/82.387/18.00
1/51.206/42.5015/28.50
2/91.2213/82.638/19.00
1/41.257/42.7517/29.50
2/71.299/52.809/110.00
3/101.3015/82.8610/111.00
1/31.332/13.0011/112.00
4/111.3685/403.1212/113.00
2/51.4011/53.2014/115.00
4/91.449/43.2515/116.00
1/21.5012/53.4016/117.00
8/151.535/23.5018/119.00
4/71.5713/53.6020/121.00
8/131.6211/43.7525/126.00
4/61.673/14.0033/134.00
8/111.7310/34.3340/141.00
4/51.807/24.5050/151.00
5/61.834/15.0066/167.00
10/111.919/25.50100/1101.00

4. Backing and Laying

Just as you would expect if you were betting with a bookmaker, when you back on a betting exchange you are saying that a particular outcome will occur.

However, with a betting exchange you also have the choice to say that an outcome will not occur – this is called laying.

Backing = we are saying the outcome will occur.

Laying =  we are saying the outcome will not occur.

5. Hedging/Greening Up

When hedging we are closing our position and equalising our profit or loss on the outcome we have traded on. This means no matter what the outcome is of the event we will stand to profit or lose the exact same figure that we closed the trade at.

Greening up is when you are hedging up a profitable trade as we are ‘in the green’.

6. The Two Main Styles of Trading – Scalping and Swing Trading

Scalping is a method of trading whereby the trader looks to get in and out of the market very quickly over a number of times.

  • Scalpers are generally only looking to trade one tick at a time so are therefore more concerned with small but consistent profitable trades. (A tick being one increment in the odds – for example, 2.12 to 2.14 – in this case a scalper would look to lay at 2.12 and back at 2.14 to hedge up a one tick profit).

Swing Trading is when a trader looks to take advantage of a bigger movement of the odds in the market and will likely be in active in the market for longer periods of time than a scalper.

  • Swing traders look to secure bigger profits but are likely to be less active in the markets than a scalper. (For example, laying at 2.12 and backing at 2.48 to hedge up a 17 tick profit).

The following is an example of a swing trade by Mug’s Game (also known as Steve Howe).

The point of this video is two fold:

  • It will show new traders that not every swing trade is £100-£200+ (this is a level that only the professionals who are at the top of their game can achieve)
  • It keeps your initial expectations realistic

If you wish to find out more about Mug’s Game’s Horse Racing Workshop then you can read my review of the one I attended, by clicking here.

Alternatively, head straight to his website to view forthcoming Workshop dates.

7. What Is a Scratch Trade?

Scratching a trade is when:

  • You cancel a trade by stopping your order from becoming active in the market, or
  • By entering and exiting at the exact same odds for no profit or loss

8. The Difference Between Sports Trading and Sports Betting

In sports betting there is only one part to the process. You back a selection and hope that it wins the event.

In sports trading there are two parts to the process. In the first part, you either back or lay a selection and then hope the odds go in your favour for a period of time where, in the second part of the process, you hedge up your trade so that you will profit no matter what the outcome of the event is.

So in sports trading, you are just looking to profit from the movement of the odds in an event whereas with sports betting you are looking to profit with your selection actually winning the event.

If you were backing Over 2.5 Goals in a game you’d have to wait until there were at least 3 goals for your bet to win or for the game to finish with 2 or less goals for your bet to lose.

With trading, if you backed Over 2.5 goals at the start of the game and there was a goal within the first 10 minutes the possibility of the game finishing with Over 2.5 goals would become much greater and thus the odds would drop to reflect this probability.

For example, you back Over 2.5 goals at odds of 2.12 before the match begins. There is an early goal in the 9th minute. The odds settle at 1.42, you now have the opportunity to LAY (that is to say it WON’T happen) Over 2.5 goals at the lower odds and guarantee a profit no matter what the outcome is – whether there’s 3 goals or less.

Interested in Trading Football?

Then check out Goal Profits, our recommended service for Betfair football trading newcomers.

9. The Difference Between Sports Trading and Matched Betting

Many people move into sports trading having had a matched betting background, I did, and I think it’s quite a good introduction as you learn everything about how exchanges work and the concept of obtaining value long-term.

Here are 4 main differences:

Sports TradingMatched Betting
Doesn’t use bookmakers. Uses a betting exchangeUses bookmakers as it uses their regular promotions and offers in order to extract long-term value
In their first year, most people consistently lose at tradingMatched betting guarantees users profits right from the start
Psychologically, sports trading can be a tough nut to crack. There are many mental hurdles a trader needs to get over before they start to make consistent profitsPsychologically, matched betting is much easier to handle as it is a basic process of following step by step instructions provided by service providers and believing in the maths
Relies on an ability to read a market’s movement and/or to have a statistical edge that implies there is value to be taken in the proposed trade Relies on just following and repeating standard processes through time and again

And 3 main similarities:

  • Both are concerned with taking value
  • Both involve investing in resources or software for learning and profiting purposes
  • Tracking results is a key part of the process

I do not want to put anyone off attempting to learn sports trading, but it is important people are aware of how the journey from beginner trader to pro trader can be a difficult one.

Some of the skills and concepts learned in matched betting are good entry points to sports trading and, because of this, I feel it would be beneficial that complete newcomers to either of these went with the matched betting option first.

There’s also the major plus that you will not lose money while you’re learning and could even put the money earned from matched betting into learning sports trading.

10. How Does a Betting Exchange Work and Which One Should I Use?

A betting exchange is a platform that allows peer-to-peer betting. This means that when you place a back or a lay bet then there will be someone on the other side accepting the odds you’ve placed your bet at.

For example, if you back a horse that you think will win a race then there is someone on the other side who has matched your bet with a lay bet to say that the horse you’ve chosen won’t win the race.

Betting Exchanges are popular for the following important reasons:

  • As it’s peer-to-peer betting the odds are usually much better than bookmakers
  • Bookmakers have a reputation for restricting or banning winning punters – they don’t want people straight up betting and winning money. With a betting exchange, you will never get banned for winning

Betfair is the most popular betting exchange as it has the biggest user base, and most importantly, the most money being traded.

Aspect/Betting ExchangeBetfairBetdaqSmarketsMatchbook
Year Formed2000200020082004
Software Available ForGeeks Toy, Bet Angel, BetTrader, Gruss, Cymatic. Pretty much every software on the marketGeeks Toy, Bet Angel, GrussNoneGeeks Toy
Main Positive/Unique Selling PointMost liquid markets – has the most money flowing through themIs the second biggest Betting Exchange in the UK. Does not have a premium charge for winning members2% Commission and has no Premium Charge. Often used by matched bettors due to the extra savings made in commission throughout the yearLower commission than its rivals
Main NegativeThere is a level called Premium Charge in which Betfair take 60% of all winnings from highly successful players. This gave Betfair the nickname of ’BetUnfair’With 5% commission and no USP over its rivals it’s easy to see why users are flooding to its competitors insteadNot associated with any software which allows you to trade it. However, can be used for straight backs and straight lays if you wish. The user interface is not quite as intuitive as BetfairTheir commission structure is not as easy to get your head ahead as it is taken from both winning and losing bets
Commission Structure5% on winning bets (up to 60% for highly successful players making profits of over £250,000 – not something you need to worry about unless you’re a professional sports trader)5% on winning bets2% on winning bets1.15% on both winning and losing bets

11. Football Trading Backing and Laying Example

You back Chelsea to win their match vs Arsenal – you will win your back bet if Chelsea win the match.

Alternatively, you could lay Chelsea to win their match vs Arsenal – now you will only win your bet if Chelsea do not win the match, ie if they draw or Arsenal win the match.

For the best football learning tools and resources, click here for Step 5 of our Sports Trading: 8 Steps to Discovering Your Edge Email Course.

Want to get the free email course delivered straight to your inbox? Just subscribe using the button below:

12. Horse Racing Backing and Laying Example (Pre-Race)

Say you back Thistlecrack to win the race – you will only win your back bet if Thistlecrack comes first in the race.

If you lay Thistlecrack to win the race then you will win your bet if Thistlecrack does not win the race – no matter if he places 2nd, 3rd, 4th,  5th (you get the idea) or last.

On a betting exchange the current back price will always be lower than the current lay price – otherwise this would create endless opportunities for arbitrage.

13. How Do Odds Move on a Betting Exchange?

There is no simple answer to this one as it really depends on the sport and the market. We’ll use the two examples of football and horse racing again though.

For football, let’s take the Over 2.5 market this time. Whilst the game is in-play the movement of the odds will be dependent on whether goals are scored or not.

If there is not a goal then the back price of Over 2.5 goals will get bigger throughout the match as the probability of Over 2.5 goals occurring becomes less and less as the time wears on. This is known as Time Decay.

If there is a goal then the odds (depending on the timing of the goal) will plummet dramatically. For example, if the back odds before the match on Over 2.5 goals were 2.00 (Evens, 1/1) and there was a goal in the first 15 minutes of the game then the back price on Over 2.5 goals may plummet to somewhere around 1.40 (2/5).

Of course, the movement of odds in horse racing is wildly different. If we look at the pre-race trading of horse racing (one of the most popular markets for beginners) then the movement of odds is dependent on a lot of factors, but here are a few examples:

  • Which horse/s is receiving money or continually being backed
  • How horses are behaving (for example, if one is playing up or sweating heavily then the odds are more likely to drift)
  • What the commentators/pundits are saying

14. Which Sport, Strategy or Market is Best for Me to Start With?

That’s something you will have to find out for yourself. However, three of the most popular sports people end up starting with are:

  • Horse racing, mainly pre-race
  • Football, mainly pre-match and in-play
  • Tennis, mainly pre-match and in-play
  • Cricket, mainly pre-match and in-play

There are lots of other sports and markets anyone can trade on Betfair but these are 4 of the most prominent for a number of reasons, including:

  • They are popular sports and, as such, people know a lot about them and there is a lot of money traded in the markets
  • There are traders out there who specialise in them and are willing to teach others, whether that be through online platforms, e-books or group courses

In the first 9 months of my journey I wasted a tonne of money, effort and time finding out which products, learning resources and services suited my trading style. So, when setting up Sports Trading Tools I created an email course in the hope it would cut out this hassle for all aspiring sports traders.

Sports Trading: 8 Steps To Discovering Your Edge

In the free Sports Trading Tools email course I’ll take you on the 8 Steps to Discovering Your Betfair Trading Edge. In this email course, I’ll cover:

  • Where’s the best place to get started
  • How not to waste money during the learning process
  • The best learning resources, specialist tools and what they offer
  • …and how to build a risk-free bank roll

Just click the button below and enter your email to receive the free Sports Trading: 8 Steps to Discovering Your Edge Email Course

Sign up now as these answers aren’t to be found in this guide.

15. The Three Best Resources for Learning Pre-Race Horse Racing Trading

Caan Berry’s Advanced Video Pack

Brief Overview: A pack with 22 modules and 96 videos – Caan’s online trading resource takes you through each step on the path to becoming a profitable horse racing trader.

Read the full review.

Caan Berry’s Pre-Race Trading Guide

Brief Overview: A lot of the information contained in this guide is essential knowledge if you are to make a success of trading the markets. If you are completely new to trading this will be a real eye opener as to why the markets move in the way they do.

Read the full review.

Image of Caan Berry's Pre-Race Trading Guide cover
Caan Berry's Pre-Race Trading Guide

Who Is Caan Berry?

Caan Berry has been a professional trader since 2011 and uses the Geeks Toy Software.

Mug’s Game (Steve Howe) Horse Racing Workshop

Brief Overview: The best one-day trading course workshop for any newbie trader to learn one successful strategy to help them profit from the pre-race horse racing markets.

Read the full review.

You can check availability of Steve’s courses on this page on his website: Mug’s Game Horse Racing Workshop.

16. Trading Football Pre-Match and In-Play

As one of the biggest sports in the world it’s no surprise that football is one of the most popular sports to trade. Whereas many people who trade pre-race horse racing may not have a deep knowledge about the sport, many people who trade football are knowledgeable about it.

Football can be traded both Pre-Match and In-Play and is popular for the following reasons:

  • It attracts a lot of attention and therefore a large amounts of money fill the markets. Big matches which are played live on TV can often see anywhere between £2 million to £10 million traded on them. Major international tournaments can have double this amount traded on them
  • People understand the sport and the teams they are trading
  • There are hundreds of football matches that are tradeable on Betfair every week

When it comes to learning football trading it’s undoubted that the place to begin is GoalProfits.com (explained more about below). Not only is this the best place to start out, but it’s also the best place to learn every aspect of football trading and will certainly help those who stick with it in their efforts to become professional traders.

17. The Number 1 Resource for Learning Football Trading

Goals Profits

Brief Overview: This community has won awards time and time again since opening in 2011, and it’s easy to see why. There is a reason why Goal Profits has helped so many people become profitable football traders and that’s down to a combination of the exceptional training service it provides and the uniquely powerful Team Stats software.

Read the full review.

Goal Profits - Launchpad Member's Area Descriptions
Launchpad Member's Area Descriptions

18. Why Trading Horse Racing Pre-Race Is Where Most Traders Start Out

One of the most popular sports to trade is Horse Racing. The most common way to trade it is pre-race due to the large movement of odds that can occur, there are also traders who specialise on trading it in-play too.

There is less risk to trading horse racing pre-race as there are less dramatic occurrences that can happen, ie you could back a horse in-play and it could fall, meaning you have no chance of recovery. With pre-race, you don’t have a risk like this.

Horse Racing is popular for the following three reasons:

1. Multiple Opportunities to Profit Daily

With racing on 363 days out of the 365 days in a year and with an average of 3 meetings per day you can see the appeal. There are also plenty of evening races throughout the year meaning those who work during the day still have an opportunity to practice their skills.

2. Volume and Liquidity

With each race averaging between £400k-700k that means professional traders can often get large stakes in and out of the markets multiple times – creating large profits.

3. It’s Often Considered the True Art of Sports Trading

Trading Pre-Race Horse Racing is like trading no other sport because you can trade it purely by reading what is happening in the markets and why – whereas other sports rely heavily on statistical analysis. Essentially, it teaches you a lot of the fundamental skills that come with being a profitable trader.

19. Betfair Trading Software and Why You Need It

Sports trading software gives traders significant benefits:

  • It automates complex calculations so traders don’t have to
  • It allows a trader to see the full market depth through a ladder interface
  • It visualises important information that can be used to make trading decisions through the use of charts and graphs

If you are not using trading software then you will be at a serious advantage against everyone you are competing against in the market. A trader cannot trade using the Betfair website as it does not display enough information and would mean you must calculate your own figures when hedging. This is simply not realistic and will lose you vital seconds.

Using software is an edge within itself.

There are two main market leaders:

Geeks Toy

A fully customisable software that’s the cheapest on the market. This is often popular with trader’s just starting out.

Read the full review.

Geeks Toy Ladder - Europa League Trade, Fully Hedged
An example trade using the Geeks Toy software

Bet Angel

A superb software that has all the bells and whistles a trader could want. This software is more for those who have reached a level of consistent profitability and want to enhance their skills.

Read the full review.

Bet Angel Ladder Interface
The Bet Angel Ladder Interface

For newcomers, I recommend Geeks Toy as it does everything a new trader needs and is the lowest price amongst its competitors.

However, neither of these two market leaders work on Apple Mac straight off the bat. If you’re looking for a software that works seamlessly on Mac then you’re best off looking at BetTrader.

For more information about Betfair Trading Software and the 3 software mentioned above then please read our Betfair Trading Software Overview, here.

20. Betfair Software Ladder Display Explained

This is the most popular way to visualise the information available in a Betfair market. The ladder is a vertical display of odds and lets a trader see the amount of money available to be matched at the odds displayed, whilst also seeing how much has already been matched at each of the odds. This is highly valuable information.

The video below from Caan Berry explains more about the the Ladder Display on his Geeks Toy Software:

21. Setting Expectations

Do not go into the world of trading thinking it will be easy and within a year you will make a vast amount of money. This is a key fault of any beginner and one, I’ll admit, I made too.

If there is one key thing you do when you’re starting out trading it should be to remind yourself of is this:

At first, focus on not losing money rather than making money.

22. How Long Does It Take to Learn Sports Trading?

The learning of sports trading is not the most difficult part for many people. It’s the controlling of the mental side of the game that is the major hurdle for most. A pro trader could give you a tried and tested strategy that has shown to be profitable time and time again, but if you’re unable to control your emotions when performing the trade then that will be the major downfall that ensures you consistency lose – at least for a period of time until you kick out the bad habits.

It often takes traders at least a year to master the art of trading – that is to learn how to trade and how to approach the mental side of it.

If you want to learn more about the topic of Trading Psychology then take a peak at our blog: Trading Psychology: 5 of the Best Books

 23. 5 Top Tips to Give Yourself the Best Chance to Succeed

  1. When starting out and learning do not have any financial pressure or need to make money from sports trading. You will more than likely lose consistently for the first year
  2. It sounds counter-intuitive, but at the start you should focus on not losing money rather than making money
  3. Don’t trade when your emotions or mental state isn’t right. Ie, don’t trade when you’re upset, sad, angry, tired or drunk
  4. Start off with small trading banks, you will most likely lose all of the first two or three
  5. Invest in learning resources – it will save you a lot of time, money and hassle by following the paths of people who are already successful at it (you can find our Overview Guide of all the sports trading tools listed on this site, here)

To help newcomers to overcome some of the hurdles that can be involved when learning Sports Trading i’ve created an 8 Step email course that will cut out all of the beginner hassle for you.

Find out more about it here.

FAQ

Why Has Sports Trading Become So Popular?

The past number of years has seen a rise in the number of people learning the art of Sports Trading. This is down to a number of factors:

  • People are becoming smarter about the methods they use to try and make profits from sports betting
  • With the popularity of matched betting exploding in recent times there have been many people who have the background knowledge about how Betting Exchanges work and have more nous compared to the average bettor when it comes to finding value in sports markets. They then wish to make the leap from matched betting to sports trading
  • Bookmakers have always been a law unto themselves, but online they can really do what they want – if you’re a winning punter then you’ll eventually be restricted as bookies don’t want winners. On betting exchanges it’s highly unlikely you’ll ever get restricted.
  • Technology and the rise in vendors who offer products and services to the market means that sports trading is more accessible than ever

Can’t I Just Use My Favourite Bookmaker’s Cash Out Feature?

You could, but there are three major disadvantages to this:

  • You have originally backed at poorer odds with the bookmaker than what you would have got at the exchange, putting you at a disadvantage from the get go
  • The bookmaker will offer you a cash out value for less than what you would get on the betting exchange for the same bet. This means you will make less profit long term
  • If you do end up actually consistently winning – they will restrict your account as they don’t like winning punters

Remember, the bookmaker is always looking to profit from their punters through offering them poor value at every turn – pretty much everything on a bookmaker’s website is designed to take profit from you.  There are only three main ways to ensure sure you have a profitable edge in the gambling industry long term:

The Overround (Book Percentage)

If you’re a regular punter you may not know the following bit of information – I didn’t until I started matched betting.

The prices on betting exchanges are better value in comparison to bookmakers because the overround is always close to 100%.

With bookmakers, the overround is typically anywhere between 115-130%.They do this by offering poorer value odds to punters. The extra percentage over 100% is called their ‘margin’.

In overly simplified terms – the bookmakers are giving themselves 130% probability that any outcome in an event will occur compared to the betting exchange which says that there is only 100% chance that any outcome will occur – which is obviously the true % chance.

Ticks

One tick is the minimum movement that a price or odds can make, for example from 1.80 to 1.81 or from 6.2 to 6.4.

The value of a tick differs by increment of the odds.

Odds FromOdds ToTick Increment
1.012.000.01
2.003.000.02
3.004.000.05
4.006.000.1
6.0010.000.2
10.0020.000.5
20.0030.001
30.0050.002
50.00100.005
100.001000.0010

Starting Bank Size and Using Practice Mode

How much you put in to start with will be down to you. However, I want to offer some top tips from my own experience and from hearing about other people’s experiences:

  • Only use practice mode as method to get to grips with and familiarise yourself with the software
  • If using practice mode then don’t use it for more than a couple of days. There is a major difference in how a trader reacts during practice and how well they perform using real money – even if it is just £2
  • Start off with a small trading bank (even as small as £100) and use £2 stakes to begin with. Is it pretty much a guarantee that you will blow your first few trading banks
  • When using a second trading bank, again go small. Maybe £200 this time and raise the stakes to £4 a go

Extra Info: How Did Sports Trading Come About?

With the progression of the internet in the late 1990’s someone had the smart idea of peer-to-peer betting through the medium of a betting exchange. There were lots of advantages to this medium:

  • Punters could get larger amounts of money on as the liability lay with the whole market and not with a single bookmaker
  • Odds were usually higher meaning that punters got better value for money
  • For a while there was the ability to arbitrage between sports bookmaker’s prices and those offered on the exchange if the back price at the bookmaker was higher than the lay price was on Betfair

Sports Trading was popularised from 2000 onwards after the inception of a betting exchange called Flutter, which was later acquired by the world’s current leading betting exchange Betfair.

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