Betfair trading – Trading Order Flow – explained

What is trading order flow?

When I first started Betfair trading, I worked in markets I was familiar with. Football, Financials and Golf. I felt comfortable in these markets and traded them well. This was because I understood what the price should be and how the market would react to changing news.

I kept looking at horse racing markets though. They were massive compared to the markets I was trading, so I felt I should get involved. As I didn’t know much about horse racing I decided to trade sports markets like you trade the stock market.

On financial markets you can trade many ‘instruments’ without knowledge of their underlying value, you just trade the activity what you see in the market. That’s what I intended to do on horse racing, trade the ‘flow’ of the market. If I thought people liked a horse I’d back at a higher price and trade out when it was lower and vice versa.

Racing markets are typically the best market to trade order flow. In financial markets you have market makers, buyers and sellers putting orders into an order book and a market price. When sports trading you have bookmakers, backers and layers, the betting exchange and odds. They are not too dissimilar.

In the past, I have talked about its effectiveness in terms of a trading strategy, but a few people have said to me whether I could elaborate, specifically what you’re looking for with order flow when trading. So here is the Betfair trading strategy I use the vast majority of the time when trading horse racing on Betfair. Trading order flow, fullly explained!

You can read on via the blog post, or watch the video if you prefer.

Early stages

Kempton Race course parade ring

When we arrive at a market, the most important thing to realise is that horses have to get saddled up before they go into the parade route and taken to post.

Until that happens, a lot of people won’t place a bet on a market because they can’t see how the horse is behaving. It’s a bit like trying to buy a second hand car without looking at it, you don’t part with the cash until you can see the goods!

So when you look at the market, the same thing is happening. The most important thing when you trade order flow is to wait for the money to arrive.

Here is an example of a market at Sedgefield, with about three and a half minutes to go.

Understanding order flow in Bet Angel

blue box highlights how money has been traded so far

You will need to have some trading software when you attempt to trade order flow. Here, obviously, we are using Bet Angel.

When looking at the image above can see that there’s plenty of money coming through the market. When you look at the top of the Bet Angel screen, you’ll see how much money has been traded so far and how quickly that is increasing. If you don’t see this, you can adjust and bring this up in the settings.

Your first objective is to start looking at the market to understand what’s going on. When my screen first appeared, all of the runners were level in terms of the odds, to see this I basically centralised the ladder by pressing the ‘enter key.’ By centralising it it allows you to understand where the current price activity in the market is and where most of the backing is.

highlighted in blue is the second favourite of this race

So if we look at this market, we can see from the picture above that the price on the second favourite has been moving in and therefore you can see that that has been backed.

highlighted in blue is the first favourite of this race

In comparison, we can see that the price in the favourite has been drifting out gently. So even from a base level, that gives you a clue as to what’s going on.

Image showing the top four favourites on this particular market

You can see they don’t like the favourite as much as they like the second favourite as well as the fourth favourite a little bit as well.

So if we use both the second and fourth favourite being popular in the market as an example, then that’s probably going to put pressure on the second and the first to start drifting out.

How to read the order flow

The bigger and darker the colours in the ladder are shows that at these points a lot of money is being traded. The darker colour ,which you can use it to define if you wish, is how much money has been traded in the last 60 seconds.

So you can see there’s been quite a bit of money traded, but what we want to look at the shape of that money. There are varying amounts of activity throughout this section of ladder, some with more money and same with less, these are then getting matched.

So this is what we’re talking about when looking specifically about order flow, we can see that he’s being backed here which is pulling the price in. But as a consequence, you can see it’s pushing the other prices out on this particular occasion.

Blue highlights the most activity in the market on the first favourite

If we look at the favourite (pictured above on the left), you can see that most of the money was matched around 4.6, but it’s gradually been drifting towards 5.3 where there is now more money.

The interesting thing, as you can see, this has sort of stalled. It doesn’t have the same shape that you can see on the second favourite is now about to disappear off the bottom of the ladder which you can see in the image above to the right of the favourite.

What can we take from these readings?

So let’s explore this particular market further, where do we think this is going to go? One possibility of what could happen is whether we think the second favourite will stall.

Current status of the second favourite

If you look at the image above of the second market we can see that it has reached the price at 4 with reasonable amounts of money, then it charged down to about 3.5.

But can you see that their money sort of drying up around 3.55? So if I was looking at trading this, I would start looking for confirmation that maybe nobody is willing to back it below this current point within the market. Therefore, the price is going to start going up.

Overview of the market at this current stage

If the price is going to start going up, then you’ve probably seen support for the favourite on the favourite’s ladder.

You can also see that when I re-centred the ladder, there’s been a bit of support for the third favourite which you can see in the image above. So if we get two of them that are obviously receiving backing activity, then that will help push the price of the second favourite up in the other direction.

When people see something go from fours down to lower levels, where there was a big chunk of money went in the market, then there’s a natural tendency to try and jump on that which you can will make it lower. In this example there seems to be a bit of late backing on this second favourite.

Second favourite

You can see that when the price on the second favourite reached around the 3.50 level, that we became a little bit more cautious. We may have got lucky on this particular occasion if we backed it at this particular price. However, my instinct when we’re down at this level is to look at the other runners, look at where the orders are going in and then not trade the continuation of that backing, but to oppose it.

On this occasion, there was some late money and things like that are going to happen. When we look at the market we’re trying to make a general judgement on where the price activity is. You have to remember that you can’t guarantee that you’re actually going to nail this every time.

Which markets are suitable for this strategy?

Horse racing markets pre race are perfect for trading order flow as they are driven by opinion. There is also a lot of variabilty in price and this creates the trading opportunity. This also creates the risk fo a loss as well so it’s important to have a trading plan and money management.

You can take advantage of any pre-off market in reality as they are all driven by opinion. In a football match the market moves very little unless there is team news but some pre-off markets are very quiet. So know your market before you dive in!

Understanding this Betfair trading strategy

Trading order flow is this manner is all about being generally right, winning more than lose and making judgements on what you see. This is why some people find it hard trading in this manner.

I’ve seen people pigeon hole strategies with this stye. Is it scalping, swing trading? In reality you don’t care, you are buying and selling like a market market. Whether you are going for long term bigger profits or short term small profits, the most important thing is to anticipate what the market is going to do an adjust your risk accordingly.

People have an instinctive need to win and to be right. But when trading in this manner you will also lose quite frequently. But that’s OK as long as you are consistent and keep to a trading plan. After two decades in the markets I still regularly lose 2/3 races out of ten, but I always win more than I lose in monetary terms over those ten races. Over the course of the day and week, that ends up with me almost being assured of a profit if I trade enough races.

But when we’re talking about trading order flow, this is the sort of thing that we’re looking at. When you’re trading order flow, you’re not just looking at the flow of money. You’re also looking at how that’s influencing prices and how movement across the book is likely to influence the position that you’re in.

There’s a lot of depth in the understanding of order flow. You should be looking at charts as well which I would have done alongside the ladders, if I was actively trading this market. If you’re trading order flow, you should be looking at where the backing money is going, where that’s influencing price and how that, and the other positions that you can see across the market are going to influence your particular trade.

When you put that all together you will end up become a more compentant Betfair trader, but that takes a bit of time. Read some of the other blog posts I’ve done and also watch some more videos to listen to what I am looking at when I do any one particular trade.

At the Bet Angel Academy, we have nearly three hours of videos for you to watch and understand what I am seeing register and view them on this link: –

I hope that gave you a better understanding of what order flow is and what to look out for when in a market.

Trading order flow
  1. ian 4 years ago

    You say you can see the backing money is drying up on the ladder. Do you mean the orders waiting to get matched our the money that has been matched and the volume on the side E.g. 5.6k matched at 3.55

    • Peter Webb 4 years ago

      Thanks for your comment, Ian. I tend to watch how much money is backing and laying specific selections and how much that is ‘eating’ into the money waiting. That way I get a feel for if the pressure is building or weakening for a runner. Of course, new money can arrive or be removed, so you have to glance at how much has been matched also to get an overall picture.

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