Strategies

Trading – The Simple Approach

(Last Updated On: February 8, 2015)

There’s no doubt about it that if you’re averse to risk and want to make money from your betting… trading is almost certainly the best route for you to take.

Over the years I’ve read pretty much every guide that’s been released and they all follow similar approaches.

I know some very high-turnover traders who work in different ways to each other from swing trading to scalp trading and even cross-market trading.

But, for the newbie, trading can be incredibly frustrating.

Why?

Because you keep jumping on trades that move the wrong way.

If there’s anything you’re going to need to be a successful trader, it’s patience. And if you have patience and have at least one day a week where you can trade, then… you can learn to be a successful trader.

And I’m going to show you how right now.

The approach I’m about to share is so simple that you’ll find it hard to believe it works. But it does. You don’t need hundreds of graphs and charts and highly complex software. You will need some software in order to place your bets fast enough, but I’m going to show you the principles using the Betfair graphs.

Open up a race at 15 minutes before the off. This is a rule I have in place as some software doesn’t collect data until you’re connected to a race and it makes sure that you’re starting to gather data in time.

You need to follow three very strict rules:

  1. Only trade on the favourite
  2. Only trade between 10 minutes and 5 minutes before the off
  3. Only place one trade per race

These rules are key to making this process work. Scalping, which is the type of trading you’re about to do, requires patience. If you don’t have this then you will place more losing trades than winning trades.

By only allowing yourself to place one trade a race you are forcing yourself to learn patience and discipline.

So you’ve opened up a race which will look like this:

Screen Shot 2015-02-08 at 21.35.42

The favourite is the horse with the lowest odds, in this case Cornelius.

Next to the horses name is the icon of a graph…

Screen Shot 2015-02-08 at 21.36.36

Click this icon and you’ll be brought up with a chart that looks like this:

Screen Shot 2015-02-08 at 21.37.15

This is what we’re going to use to determine the entry and exit points for our trade.

Focus on the Traded column and follow it up and down to see the lowest odds that the horse has been traded at.

It has every odd possible, so you may need to scroll some way before anything starts to appear in the traded column. As you can see below the Traded column started filling in at odds of 2.42.

Screen Shot 2015-02-08 at 21.41.11

In this case the lowest odds the horse had traded at was 2.42. Scrolling further down to see the highest odds that the horse had been traded at, you can see that in this case it’s 3.95.

There is a condition. If the horse hasn’t had more than £1000 traded at an odds level, then we don’t consider that odds level as having significant trading and is excluded from our calculations.

That would mean the highest odds the horse had traded at was 3.15. I would still keep the lowest at 2.42 because although it’s less than £1000, it’s only be £25 and the next odds level has over £8000 traded on it.

Doing this you will find two possible situations. Most of the time you will see something that resembles this:

Screen Shot 2015-02-08 at 21.41.47

The majority of the money traded on the horse will be at odds in the top middle of the graph. Either side of these odds the amount of money traded gradually decreases.

But sometimes, as in this example, you may see something like this:

Screen Shot 2015-02-08 at 21.42.38

Now these are both obviously representative examples, if you made graphs from real figures they wouldn’t be this uniformed.

What has happened here is that there are two odds which have had similar amounts traded in them. This normally occurs when a horse has had a lot of early activity at a certain level and then just before the race starts the market then sits at another level producing two high points.

Races with two clear high points like this should be passed. Focus ONLY on races which have one high point.

What you can see in the example above is that the majority of trading happened between odds of 2.42 and 2.80. There was a bit of a wobble at some point where a small amount was traded between 2.90 and 3.15, but compared to the amount traded between 2.42 and 2.80 this is negligible.

That means for this runner we would be using 2.42 and 2.80 as our low and high points.

Do this between 15 minutes and 10 minutes before the off. By the time it gets to 10 minutes before the off for the favourite horse you should have:

  • The lowest traded odds (with at least £1000 traded on it)
  • The highest trade odds (with at least £1000 traded on it)

Now we need to wait for the perfect moment to allow us to trade. You are only going to be doing one trade per race, so you need to wait for the right moment.

If the right moment doesn’t appear in a race, that’s no problem. Hold off and wait for the next race. Most importantly…

Never force a trade.

The moment you are waiting for is when the odds drop to the lowest traded odds level or rise to the highest traded odds level.

At this point you very quickly perform a couple of checks:

  1. Make sure the odds haven’t ploughed through the previous odds level, it should be hovering at it and bouncing about a bit.
  2. Make sure that there is similar money waiting to be matched on either side of the market.

If both of those are true then you can place your trade. If the odds have hit the lowest traded odds level then you want to place:

A lay bet at those odds and look to back the horse one tick higher

If the odds have hit the highest traded odds level then you want to place:

A back bet at those odds and look to lay the horse one tick lower

Now we need to put in our stop-loss. We are only looking to make one tick profit in these trades. But occasionally the market will move in the wrong direction. To prevent us from losing a huge amount we are going to place a stop-loss at 4 ticks.

If you’re using software then it can do this for your automatically.

So we’re after a 1 tick profit or a 4 tick loss.

Using this approach you should be able to get well over 90% of your trades correct and will make a good profit.

If it gets to 5 minutes before the off and there hasn’t been a possibility for a trade, then move on to the next race.

But you must manage your expectations.

  • This will ONLY work if you follow all the steps and only place one trade in a race.
  • You will ONLY make a small amount of profit when you start to small stakes.
  • You will LOSE more than 10% of your trades when you first start.

What you’re doing by following this process is learning the most important market indicators and patience.

Do this for thirty days, it can be one day a week or every day. It doesn’t matter. All that matters is you follow this process for thirty days.

After thirty days you will have the process completely ingrained. At this point you can consider allowing yourself to do two trades per race.

Build up slowly and you will not only learn how the markets move, but you will also make a small profit while doing so and avoid the frustration of always feeling like you’re on a losing trade.

Michael Wilding

Michael started the Race Advisor in 2009 to help bettors become long-term profitable. After writing hundreds of articles I started to build software that contained my personal ratings. The Race Advisor has more factors for UK horse racing than any other site, and we pride ourselves on creating tools and strategies that are unique, and allow you to make a long-term profit without the need for tipsters. You can also check out my personal blog or my personal Instagram account.

31 Comments

  1. Hi Michael, I have been seriously practicing trading on bet trader using the training mode for a few weeks now and have been able to do some high learning curve experiences without losing money. Trading- the simple approach is very interesting and one i will be learning with, Thanks for all your insight and knowledge, Bernd

  2. Excellent intro thanks Michael.
    I’ve been keen for a while to give trading a go, but realise I must be disciplined about it.
    My question is, do you have any recommendations on the type of software that could be used and do they need to operate on a PC or are there versions available for iPad for example?
    Many thanks
    Chris

  3. Thankyou, Michael, for a clear and concise article which opens up the secrets of trading. I’ve found that a lot of people are happy say WHAT should be done (Back High, Lay Low, etc) but very few will explain HOW that point is selected. You have and I’m grateful to you.

    1. Hi Luke, thank you for the message. A tick is the difference in odds. For example if the odds go from 1.91 to 1.92 then 0.01 is one tick in that odds range. As the odds get higher a tick becomes bigger, for example odds of 3.70 would move to 3.75 which means a tick in this odds range is 0.05. A tick is the difference between odds at different odds ranges. I hope that clears it up.

  4. Nice article Michael and thanks. I am not sure about the simple graph you show though. Are you meant to plot it yourself or will it display somewhere in betfair?

  5. Hello Micheal,

    I just read your post about the very clear an detailed review of “The Racing Trader” Glenn Edmondson did in July 2014 but when I tried to use your link to eventually buy it it dit work.

    I already watched some of Tony Hargraves Youtube videos (The Badger) and would like to kown more about both his pre racing and in play trading strategies.

    As I know from a former post you’ve followed a live horse trading session with the autor I suppose you have surely a personnal link I can use to order this book. I already watched his Youtube videos (The Badger) and would like to kown more about both his pre racing and in play trading strategies.

    Have a nice day,

    JP

  6. Hi Micheal,

    The link works perfectly…Just a simple question remains…which book to buy first…?

    “Racing Trading” seems the most adequate one for me at this moment as learning about pre racing trades and later on in-play trading strategies (such as dobbing and others given in the book I guess) is my first goal and your detailed review gave me a good insight on what to expect.

    Now, in your opinion, as you probably know what’s in the 3 books composing the bundle, should I add another one or not ? If, you think yes, which one please, knowing that I am only interested mainly in Horse Racing, formely Football (my first in play trading option) and eventually Tennis…

    I also tried to use the Geegeez Gold rating software taking advantage on the free trial period, but even if (after reading the user manual carefully several times) I managed to understand some of the basic principles and information this software gives I feel that your Racing Dossier rating software is more acessible to a leek punter like me…
    I have no knowledge about ratings, form reading or punting but…my biggest asset is I do have the willingness and plenty of time to learn…and after several years of struggling (and losing some money in the process) to make my betting pay…betting less and winning more…as you said.

    The final idea would be to use your rating software Racing Dossier to narrow the potential selections on each race, trying then to execute some profitable pre racing trades on each selection and, if successful, place this free money as free bets and let them go in play. If one of the selctions wins, the better, if not, no harm done (to the bank at least) and onto to the next race…

    Cheers !

    JP

    1. For trading then I would recommend you don’t take any other information into account except the market. That’s my personal preference. The best approach is to start with what you’re most interested in. If that’s horse racing then start with that guide and don’t worry about the others for now.

      When you get into that book you should decide on one strategy that most suits your time available, risk levels, concentration etc… and just practice that. It can be very easy to flit between strategies with trading because you get bored while waiting for another suitable race. Don’t.

      If you can keep the discipline to stick to one strategy, not expect to earn much overnight (or even in the first few months) then once you’ve mastered one strategy and it’s working well for at least a month then you can move into learning another one.

      That would be my recommendation for trading.

    1. Hi Michael, any update on when the video might be done? I appreciate you are busy, but it would be great to see a video

  7. Hi Michael.
    Thanks for taking the time and effort to answer the above posts, I see myself doing a lot of the mistakes you have mentioned and as of tomorrow will begin with the “system.” 1 trade per race if the conditions are right sounds like a good place to start rather than blindly going from race to race with no real rules in place (and losing money) A very refreshing article.
    Keep Smiling
    ADRIAN

  8. Hi Michael, This sounds really good however why just go for a 1 tick profit, at these low odds that favourites generally are this would represent such a small profit even with a £1000 back stake, and if you are entering a trade at a point where the price will likely to move the opposite way by quite a lot would it not be better to go for a 10% profit of the back stake with a 10% SL, as long as you don’t get stooped out more then 50% of the time you are making a profit, and with such a good precise entering point the market will move in your favour a lot more often then that which makes it more worth while.

    1. The idea of one tick is to get used to trading, getting out of trades that go wrong and taking quick profits. Only doing one trade per race is about learning discipline, with this approach, once you’re making a profit on almost every race, you should start trading favourites at higher odds and also doing more than one trade in a race. Personally I always scalp and never aim for more than one tick profit because I find that I can get this almost every single time, as soon as I try for more I miss them. Obviously that’s personal and there are plenty of people who make a good profit using swing trading (going for big movements instead of small) instead of scalping. If you prefer swing trading then you should definitely use that approach.

  9. Hey, can I just clarify, for example the lowest £1000 value is 2.42 and the highest is 2.80, so you would enter a position when it’s on these odds, what would you do say 5-10 mins before the race the odds were hovering around 2.55 would you just not bother taking the position

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