Betfair trading – Little and often soon adds up

30/04/2017 | By | 2 Replies More

This is a phrase I’ll often quote when advising people on how to trade.

The real objective when trading

It’s really nice to bang in some massive results now and again, but generally, that’s not what trading is about. Most of the time I’m in a market I’m just looking for an opportunity. Something I recognise as having a decent chance of a payoff, with as little downside as possible. Sometimes you just can’t see them and sometimes they are all over the place. But generally, my main focus is not on making money, just not losing it.

By that I mean I’m actively trying to reduce my chance of a loss by either not participating in a market I can’t ‘read’, by reducing my stakes when I’m less certain or waiting carefully for an opportunity. I know I will get a profitable trade, whether I am looking for it or not, so I’m just trying to reduce the risk on it going wrong. There is an impulsive tendency to do something when trading, but I’ve learnt that patience is key. Let the market be your slave and not your master. If you can’t see an opportunity it probably doesn’t exist.

Strike rate

The worst you can do over long periods of time when trading, is winning 50% of the time. If you practice you can bump up your winning trade percentage by getting better and better at spotting opportunities. Once you are in a profitable trade you then need to squeeze out of it what you can. This helps you tip the balance in your favour when the inevitable losses arrive. Avoiding a loss is often a case of realising you have been a prat and exiting quickly when your wonderful theory behind a trade has broken down. A lot of people can’t do this, as it requires humility, self-criticism and a cool head. Sometimes things just don’t work out and you may not even know why. But realising that is the key.

But there is also some focus required on the upside. Often the biggest mistake I make is hanging on too long. A wonderful trade ends up collapsing to a modicum of itself by post time. But generally you are not aiming for that massive total, you are aiming much smaller than that. The average range in a market is reasonably predictable and therefore once a move has taken place, you would typically expect it to have its limits before it starts to correct itself.

Quantity and quality

I’ll trade somewhere between 10-15,000 races in a year and that means I don’t need much per race to get a stupendous result on the year. I just need to pick up something from most races and that will do. If you have that mindset then you will end up with a more balanced approach to things. Over the course of a day, week month and year individual results will vary but if you focus on the long term goal it will help keep your primordial urges in check. When I see a good opportunity I’ll take it, but most of the time I’m just biding my time waiting for it and trying to not get into trouble.

Yesterday I didn’t feel that I got the best out of the day. The races were not lining up quite correctly and I didn’t think I did a great job of them. I did OK, but others did better; so I know there was more on the table. However, it was still a good average per race, which is the key thing. I thought it may make a good example of what I am talking about here, so I flicked through the blog to check to see if I talked about it before, I had.

The interesting thing is that the P&L I used that day was similar to my results from yesterday, that’s no coincidence. I have hundreds, if not thousands, of similar days stretching back over my career. The reason for showing yesterday and the prior ones is that I think they are a fair example of what your objective is. I could easily show something more spectacular, I picked up just short of £1k this week in one race, but those tend to be quite aggressive results. The examples I’ve listed here are much more mundane and more in line with what you should be aiming for, albeit probably on a smaller scale.

But the overall objective is similar, little and often soon adds up.

02-08-2014 - P&L Day

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Category: Trading strategies

About the Author ()

I left a good job in the consumer technology industry to go a trade on Betfair for a living way back in June 2000. I've been here ever since pushing very boundaries of what's possible on betting exchanges and loved every minute of it.

Comments (2)

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  1. Black Ice says:

    Fantastic blog Euler..thanks so much. Have printed it out and shall read it before every days trading. As a lifelong punter, I have discovered that this is a massive disadvantage when switching to trading. You are always looking for the ‘winner’- the big trade and tend to always go for a steam..when often a drift may be safer. It’s in our punters DNA and very difficult to change the mindset. But as Anthony Joshua said after the big fight: ‘I’m not perfect- but I’m trying’!!

  2. leetheref says:

    superb article 🙂

    makes so much sense

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