When you first start on your trading journey you’ll keep hearing the pro-traders saying stuff like ‘you need an edge in the markets’, ‘find your edge’, ‘determine your edge and you will become profitable in the markets’. I’m sure, like me, when you first started out you were confused as to where you could find this edge and just wanted someone to just tell you what and ‘edge’ was!
I remember googling to find the definition of what an edge was – it frustrated me to find there was no simple answer! After a year of trading I now know exactly what someone is talking about when they’re talking about an ‘edge’.
Put simply your ‘edge’ is a piece (or multiple pieces) of information which gives you more knowledge about a market situation than other market participants.
An edge can also come in the form of skill level or a psychological trait. For example, having the ability to stop yourself from overtrading.
But the real edge of a trader comes from their mental capacity to control their emotions, feelings and ability to execute their trading plans.
Here are some sport-specific examples of edges:
Examples of an Edge in Horse Racing Trading
TV Pictures Example
In Horse Racing an edge may be that you have TV pictures. Say you’ve subscribed to RacingUK and you’re watching the horses mill about at the start before a jumps race and you can see that one horse is playing up badly. Many of the market participants may not know this information because they’re not watching TV pictures, but you do, and as such you lay the horse and as the price drifts you back it at higher odds in order to hedge up.
L2B (Lay to Back) Example
You’ve done your morning research on potential L2Bs on the day’s horse racing using Proform’s BetFinder and spot that an opportunity has come up with a certain horse having been backed in way below what Proform’s BetFinder tool would consider value. You also know that the horse is not an angle for pace and decide to lay it just before the off. The horse does as you expected and the odds rise in-play, you hedge up for your profit – winning no matter the outcome.
Everyone’s expecting goals galore in the big match this weekend and this is reflected in the price, but because you researched the game on Football Form Labs you believe that statistically there is actually a higher probability of the game having Under 2.5 goals. You back Under 2.5 goals at the start of the match and hedge when the odds have reached your target or pre-defined profit level.
Other Examples of an Edge:
- Taking your losses before they get too big
- Having done prior research
- Shorter delay in ‘live’ TV pictures
- Controlling your emotions
- Having the control to not overtrade
- Well controlled bank/stake management
- Using trading software
- Being selective about the type of markets or horse races you’re going to trade and having a deep understanding of the market dynamics – ie, specialising in one race type such as maidens only, focusing on the unders/overs markets specifically
- Being a courtsider
See? An edge can be as simple as that. An example of those without an ‘edge’ would be punters sticking a bet on a match outcome or a horse because that’s their ‘gut feeling’.
The most important thing with an edge is that is applied consistently and proves to bring you profits in the long term. This is where the real edge of a trader comes from.
Lastly, to define your edge you’ll initially want to focus on one or two markets and become aware of that market’s dynamics. For example, if you wanted to focus on trading the Overs/Unders or Correct Score markets in-play then you would need to be fully aware of how ‘Time Decay’ influences the odds movement in this market.
The more you specialise in something the more you will have an edge over that market. Thankfully there are lots of tools on SportsTradingTools.co.uk that have an in-built edge that you can tap into and use to help you develop your own edge so you begin to profit from the markets.
There are many ways to define an edge, be it information over the market, your trading style, your research process.
What would you consider to be your edge? (No need to give away any specifics!) Comment below.