Becoming a full time Betfair trader – Part 2

Welcome to part two of my Betfair trading journey. You can read part one by clicking on this link.

Over the course of these blogs, I will tell how I started from zero when betting exchanges were unheard of. How I quit my day job, started Betfair trading for a living. Then set up a trading platform to became a pioneer of a completely new method of betting and one of the very first full-time professional Betfair traders.

It was my dream job and I always feel lucky to be doing something I love. More or less watching sports for a living!

The jump to financial markets

My early forays into the gambling world had taught me two important things, people very often don’t make rational decisions and that making money by gambling was incredibly hard!

(1) The first point was a revelation, you could tell people what did and didn’t work but instead of following your hard-won, battle scared wisdom, people would construct a narrative as you why you were wrong, then do the thing you just told them not to do anyway. This perplexing problem would be something that would give me a breakthrough moment, years later.

(2) The latter thing, difficulty making Gambling pay, was obvious. But I thought it was worth a try. It was a dream that maybe somehow, someday, I could find a way to overcome all the issues and achieve the impossible of making gambling pay. Never would I have dreamed back then of being a professional Betfair trader, it didn’t exist anyhow. I just looked up to and took inspiration from, and wanted to be Ed Thorp!

After moonlighting, by doing some IT training, for a financial advisor. I decided I should get a little more familiar with financial markets. I could see the potential, but I just wasn’t sure what I was doing. As I drifted away from gambling markets I drifted into financial markets. I had no background in financials so I just had to pick up some books and learn, this was in the days before the Internet of course!

Trading financial markets

The first book I bought was ‘the bluffer’s guide to finance’. This taught me some of the terms used in financial markets. I then started reading the Investors chronicle, but couldn’t understand a word of it. Back then, never in my wildest dreams did I think I would actually end up with a weekly column in a financial journal! But life is strange like that isn’t it?

Thanks to my interest in the online world, I was one of the first people ever to place an electronic trade as a retail broker. I bought some US stocks via E-trade on Compuserve. When the first trading bulletin boards popped up, I was there discussing those early trading opportunities with other traders. But it was nothing like you see in the modern markets. It was a niche, of a niche, of a niche, that nobody had even heard of.

While holding down the day job (a conventional job) I slowly progressed my financial trading career and started investing in financial markets, buying and selling UK and US equities. Initially, this was short term and speculative. But I’ll admit to you, I wasn’t very good at it. I kept buying when I should have been selling and vice versa. Technical analysis didn’t really seem to offer much guidance. I’d learn years later why my approach was flawed. So I started looking for alternative ways to participating in financial markets.

My epiphany came, when on a trip to the US, I picked up a book about Warren Buffet and I was transfixed by the content. By the time I had arrived back in the UK, I’d read it from front to back and was on the phone to try and buy shares in Berkshire Hathaway. To cut a long story short, this eventually ended up attending the AGM and the opportunity to meet the great man himself. I did a video on this which you can watch below: –

My investing really started to take shape and, despite a few job moves and holding down a senior position in the technology industry. It felt like I would end up with investing becoming my primary career. I had a real passion for it and could read companies like a book. I also yearned to leave a normal job and work for myself.

However, it was my love of technology and investing that led me to start attending First Tuesday meetings and it was there that I first heard of betting exchanges and trading platforms.

First Tuesday & The Dot Com boom

First Tuesday meetings were like an early version of the Dragons Den. Basically, people would gather around as either investors or entrepreneurs and people would make a pitch to each other for funding or assistance in starting a business.

It was a really interesting time in the industry, the ‘dot-com boom’. I met a whole host of people that I never would have met if it were not for this period in time. It was during one of these meetings that somebody explained the concept of betting exchange. ‘Disintermediation’ was the keyword at this moment in time, cutting out the middleman. Based on my experiences in gambling markets cutting out the bookmaker sounded like a brilliant idea!

12 to 18 months later betting exchanges started to come on the scene. Because I was familiar with the concept I signed up immediately and became one of the first-ever customers of ‘Flutter’ and ‘Betfair’.

But I was still in a ‘normal’ job at that point. It would take quite a leap to go from my well-travelled and well-paid job to sticking a few quid on an exchange. That’s what I will talk about in the next post. Doing something useful on Betfair and realising that this could actually be a viable way to make a living.

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