Seasonality when trading Horse Racing

We are currently in a slightly dull part of the season. The amount I earn rises and falls over the course of the year and more or less follows the sports cycle. This is one of the ways I know if I am performing at a good level. As the opportunity rises, so should my P&L. As it wanes, so should my P&L. It’s currently waning.

From a broader perspective, there is no point in firing up your trading software for some markets. There is no high-level Tennis on at the moment, but still plenty of football. Limited over cricket is about to return, though I traditionally don’t do that much, though it’s of note. You can easily tell that all sports follow a seasonal pattern.

But my seasonality is slightly starker than most as most of the trading I do is in racing markets. This is simply a factor of the number of markets available in the underlying sport and on the betting exchange.

Seasonality in horse racing

At this time of the year, it’s easy to slip into some gloom. Like the weather, the markets can be cold damp and featureless and it can feel at times like it’s all changed. However, is just the natural cycle in the market. See the video and below and the later graphic for a full explanation.

Horse racing has three codes

The racing market tends to shift and change over the year between the three main codes. In Spring you have new horses out for the flat turf season, in Autumn you get the same for the jumps. All weather rather racing continues all year round but declines significantly in the summer.

The impact of new horses in a market with little or no form, means trends are often more pronounced. Price movements and much stronger. This is because people don’t know how the horse is going to run and if money comes for it, it can really come for it. If the horse doesn’t look ‘good’ then expect a very quick re-rating as people start to doubt if this is the next great thing.

As the season progresses then the form becomes more established and the market starts to settle into a pattern again. Price moves are more predictable and normality is resumed. The key to these changes in behaviour is to go on the front foot and exploit these characteristics rather than sit there and wonder what happened.

Weather and timings can disrupt your trading patterns

The weather can play a bit of havoc as well. Cancelled meetings, delayed start times, fog, frost, rain. Everything can get thrown at racing at this time of the year and it all has an impact. If a meeting is delayed then the market arriving in the market can be a little erratic. If it’s cancelled it can leave huge gaps between races and it’s difficult to get into a decent flow.

I am speaking a little from personal preference. But I find nothing more exciting that one race after another in regular time. After a couple of cycles of the card, I get a really good feel for the markets and can easily get into my zone and high gear. A distinct contrast from not really knowing when the next race is due off or when the money will arrive. Everybody is different, but that’s my preference.

As a result, I always do much better on the flat turf season. You also get more markets in the summer as the evening cards bulk out the number of races you can trade in a day. Never has make hay while the sun shines been so apt.

How to adjust your trading during the winter

While the markets shift, you also need to shift your mindset. You simply can’t earn as much in the winter as you can during the summer. The first year I came across this shift, I tried to make up for it with a great deal of effort by trying to squeeze every penny out of the market, but it didn’t really work. It took until next year to work out why. Really I should have seasonally adjusted my results to get a fairer view of my performance in any part of the year.

It’s better to come to terms with new trading conditions and use that to your advantage. You will notice I am quieter on weaker days and much more active around key meetings. It’s the Pareto principle, 20% of the races will produce 80% of the profit. So I’ll work hard on those. So I would recommend you pick on key meetings and days and focus some energy on it. On the quieter or disrupted days, take some time out to do some research. Play around with some ideas, try a new sport, or maybe just have the day off and do something else that is ‘well-being’ oriented.

Look at the quieter days as an opportunity to do something else, you are going to be really busy in the summer and will need the energy and structure to achieve that. Build that now while you have the opportunity, you won’t have it in the summer.

Key markets drive key activity

I tend to view the Racing season as heading from one major meeting to the next. In March, we have Cheltenham. Then April is Aintree, we skip to the Guineas, Oaks, Derby, Royal Ascot and so on. So through the early part of the Winter, I’m waiting for the King George VI at Kempton and that higher-quality over Christmas week and the New year. Back in 2010, this didn’t happen due to snow and ice. I always have fingers crossed for no-repeat!

Of course, the Aussie racing is distinctly different. But the period after New Year’s day is more or less waiting for Cheltenham. While it’ seems a bit bleak, I’ll trade it, manually, automatically, or both! There is always money there, you just have to accept that there is less and it can feel a little bit different.

But there is no need to panic, just set expectations lower and don’t set targets that are unrealistic. For me, weaker spells in racing are an opportunity for me to me work on new stuff, trade different sports or recharge the batteries. As a consequence, I’ll often holiday in the winter. I have to travel further afield, but its cheaper to get a really good adventure and the financial impact on my year, from a Betfair trading perspective, is low.

You should always bear in mind that there are always plenty of higher quality opportunities just around the corner. Of course, you may prefer some of the opposite characteristics to me. But being a bit of an all-rounder. I’d take note of the seasonality of trading, it will most likely affect everything you do.

Fixture list graphic

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