A guide to trading

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Archi
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A guide to trading
« on: February 19, 2016, 01:57:45 PM »

As more and more interest is shown in the forum about this subject I decided to write some articles about it. I trade tennis for a living for the past 5 years so I think I am in a position to share something from my experience. This post is intended for arbers with limited experience in trading. A more detail post will follow about tennis trading.

First let me tell you how I got into arbing and how I found this forum. Unlike most of you guys I discovered trading before arbing. At that time I was enjoying success in my trading but wanted to give arbing a go and see what it’s all about. Having already had plenty of trading knowledge it was very easy for me to figure out what I have to do: live tennis arbing (mainly between bet365, marathonbet and betfair). It was mind blowing: easy, fast, risk free profits. Why would anyone want to risk his money in trading when you can make easy profits in arbing ? I was thrilled to have found arbing. It only took me a couple of weeks until limits started to come. I tried a couple of friends accounts but limits came even faster. So I quickly understood that arbing comes with a price and I am not willing to pay it. I don’t want to be bookie dependent I want to make my profits in the long run without being worried about limits and suspended accounts so I got back to trading.

Once you grow tired of being limited and opening accounts the next logic step is to start trading. The big advantage in trading is that you can do this under one ID. It is possible (but not recommended) to do it under one single Betfair account. Another big advantage in trading is:  you don’t have to be right at the end of the outcome, you have to be right only for a selected part of the match. So concepts like backing a loosing team and making profits, or laying a player trailed by 4-1 in the first set and be in a profitable position even if he lost that set by 6-3 are possible in trading.

There’s three important aspects to work on: money management, trading strategies/systems and trading psychology. The last part is often under rated so I’m going to share a story from my first year as a professional sport trader to see what can happen when approaching the markets with a wrong state of mind. After about two years of part time trading I took the big decision to go full time. It all started great, I was on a roll with five consecutive very profitable months, French Open was coming and I had high expectations. I approached the tournament way too excited.  In the first round I made 15 consecutive losing trades (short priced favorites, outsiders, players serving for the match, even money trades etc.) it all went against me. It was the biggest loosing streak I have ever had (it’s actually pretty hard to make 15 consecutive loosing trades, even if you flip a coin you get some right :) )  I blew a big chunk of my bank that day. We all know the best thing to do when facing a heavy loss is to take a few days off but how could I stop when the French Open was in full swing ? I went on and it was a complete disaster. I’m talking about months of profits blown in a few days. Trading for recovery and don’t set the expectations properly can lead to disaster. Don’t make the mistake to underrate psychology.

Trading can be done both prematch and inplay. Prematch trading is safer and easier, you can take your time to make decisions, market moves much slower, it’s great to be used in the beginning but the opportunities and rewards are limited. Eventually you’ll want to move your focus to inplay trading, that’s where the real fun is.

I made a Q & A for any Arber that wants to give trading a shot. If you have any other questions feel free to ask.

1.   Where do I start ?

Select a niche (market/sport). We’ve all seen P/L from users that trade 5-6-7 sports. If you have limited experience with trading it’s a mistake. Focus on one sport. The markets behave different from one sport to another and the last thing you need is to get confuse. Once you’ve mastered one sport move on to another.

2.   What are the best sports for trading

Horse racing:  best sport for prematch trading. Tens of races every day high liquidity high volume this sport offers a lot of trading opportunities, arguably the sport with the most opportunities. However if you are living in a country where the information about horse racing is limited you might give it a second thought.

Football: Plenty of markets to trade here as well: match odds, under over, correct score, half time etc. You can combine certain markets here ex: back the home team to win, cover it with correct score 0-0, 0-1 etc. Scalp the under/over goals market: whenever you see an injury it’s a great time to make a few ticks. Lay the draw, back the draw etc. A downside to football is that most of the matches are played during the weekend some in the same time, whilst in the middle of the week is pretty quiet.

Cricket: I have limited experience here but I saw plenty of markets hitting 20 millions traded on Betfair so there are definitely plenty of opportunities here as well.

Basketball: there isn’t as much liquidity on this sport but definitely doable. 
   
Since my focus is mainly on tennis I will leave this sport for another more detailed post.

3.   I know what sport I want to trade, what next.

Get as much experience as you can. Watch matches, trade markets, get the feel of how markets behave in certain conditions. Follow experience traders in your selected sport. There are plenty of videos on youtube with trading and strategies.

4.   What does it take to be successful in sports trading ?

An edge ! Whether is knowledge, experience, information, statistics, mathematics, automatic betting, modeling etc. You’ll be competing against other traders; what looks like a good entry point to you might look as a valuable exit point for somebody else. Since you are at the beginning you obviously have no edge or clue what you edge might be but in time with enough experience you’ll figure something out. This things go hand in hand.
 
5.   What is the biggest challenge I will face ?

Facing losses. As an arber you are probably used with slow steady income, with some occasional losses (when you can’t cover your bets, bookies void you winning bets etc.). When trading you will inevitably face some ugly loosing streaks. You need to look at the bigger picture, what you are looking for is longer term profit.

6.   How long before enjoying success in trading?

Depending on your experience might take you a few months or a few years to start making regular income. An advice here: use small stakes at the beginning, if you are to loose money, might as well loose small. But I wouldn’t look at it as lost money, more like money used to learn the markets. The best way to go here is to mix your arbing with trading. This way you will keep your profits and slowly starting to learn new ways of making profits.

7.   Betfair premium charge?

Once you hit a net profit on you betfair account of 250k, you will have to face a 50 to 60% premium charge. It is inevitably a concern for any aspiring trader. You don't want to spend so much time and effort to learn the markets only to be stopped by betfair premium charge when you are successful. Two things I want to mentions here: First, 250k is more then a decent amount. If you can make it, go for it. Second: there are ways to avoid it, this forum offers great solutions. Plus other exchanges are getting better at inplay trading, I've started to move some of my tennis trading to Matchbook. 


to be continued ...
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GrayFox
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GrayFox

Re: A guide to trading
« Reply #1 on: February 19, 2016, 02:45:08 PM »

Great post Archi.
We will wait for your next post as well.

i only disagree on matchbook trading.
covering bets there is great. trading there sucks.
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kapetan1122
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kapetan1122

Re: A guide to trading
« Reply #2 on: February 19, 2016, 02:46:53 PM »

Great post,we are waiting for new part.
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GrayFox
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Re: A guide to trading
« Reply #3 on: February 19, 2016, 10:15:24 PM »

my point is that the SAME trade in betfair or smarkets has a huge advantage over matchbook when it comes to comm.
same trade, different comm, more profit on another exchange even if has a higher comm.
a comm should be applied on the profit of a trade. simple as that.
so on 59e profit having 31e in comm is more than 50% comm to me.
imagine this kind of trades & multiply them by a month. then compare the same trades if you were making them on another exchange on 2% or even 5% comm.
You will find out a huge difference.

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qbet
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Re: A guide to trading
« Reply #4 on: February 19, 2016, 10:23:17 PM »

Both MB and BF have pending times and you won't get arbs between them so effortlessly ...
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GrayFox
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Re: A guide to trading
« Reply #5 on: February 20, 2016, 08:29:24 AM »

Both MB and BF have pending times and you won't get arbs between them so effortlessly ...
yes thats true. but we are talking for the differences between trading to one exchange & another
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whitesnake
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Re: A guide to trading
« Reply #6 on: February 20, 2016, 07:21:52 PM »

the post provides good advice, but it is missing the most important aspect: a wining strategy .
Maybe you can point to some yt videos  which are useful or at least a good starting point. Of course not one of the misleading ones, which show only winning trades and not how to trade out when it goes against you, which in my opinion are most of the ones present on yt.
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GrayFox
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Re: A guide to trading
« Reply #7 on: February 20, 2016, 07:50:49 PM »

the post provides good advice, but it is missing the most important aspect: a wining strategy .
Maybe you can point to some yt videos  which are useful or at least a good starting point. Of course not one of the misleading ones, which show only winning trades and not how to trade out when it goes against you, which in my opinion are most of the ones present on yt.

he already said that another post will follow with more details.
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davidelliott52
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Re: A guide to trading
« Reply #8 on: February 21, 2016, 03:14:50 PM »

when is the second part coming
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Archi
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Archi

Re: A guide to trading
« Reply #9 on: February 22, 2016, 01:04:31 PM »

the post provides good advice, but it is missing the most important aspect: a wining strategy .

Any strategy can be profitable as long as it's used properly. Match selection is very important.

Quote
not how to trade out when it goes against you

I'll will cover this part in the next article.

Quote
when is the second part coming

Working on it. Hopefully it will be ready in a few days.
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davidelliott52
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Re: A guide to trading
« Reply #10 on: February 23, 2016, 10:57:01 AM »

awesome, im excited for it archi
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Archi
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Re: A guide to trading
« Reply #11 on: February 24, 2016, 05:29:35 PM »

Trading tennis.

Why tennis ?

11 months of regular season, matches are spread throughout the day so you can focus on each match individually. Markets are very volatile, plenty of liquidity and volume traded on this markets. There is no time limit, the players need to close out the match and this presents opportunities.
A downside to this sport: tennis is played throughout all continents meaning that you will be working a lot of unsocial hours when the tournaments are played in USA and Australian (provided you live in Europe)

The first thing you need to learn when trading tennis is to understand how the odds move. Every point will bring odds movement obviously the break points will bring the highest rewards. Understanding where the price will be after a point is played is vital for spotting value in the markets, and for particular strategies such as scalping. Betangel has a feature called Tennis Trader that will help you in predicting odds movement, it’s a great tool to have if you are a novice.

In order to start trading all you need is a laptop with a decent internet connection and a betfair account. Let me give you some other tools to improve your trading potential:
Accounts in other exchanges/sharp bookies/soft bookie. We are on an arbing forum, this is an area where we should excel. If the odds you want to back are higher somewhere else, take them, maximize your profits. Pinnacle, matchbook, sbobet are ok for tennis. Plus there are a couple of soft books that will leave you a decent stake even after you are limited.

A trading software: there are plenty available on the market some of them are free, I won’t go into details but an API is essential for trading.

A trading plan: Ideally before the match you have done your research. Which player is susceptible to loosing a lead, which player might choke in a favorable position, which player might have a slow start, who’s better in the deciding set, in tie breaks etc. What are the possible entry points, exit points, what will you do if the market goes against you. You don’t have to trade every market, be selective, trade where you might have an edge.

A trading diary – yeah  :) I remember my first reaction when I’ve heard about this. What am I a 15 year old girl ? I haven’t used a trading diary in my first three years of professional trading. Until I reached a point where I stalled, my profits where the same I didn’t knew what can I do to evolve so I gave the diary a shot. Made a big difference. I also record my screen and review my trades, both winning and loosing trades and establish what went wrong and what I could have done better.

A stop loss to your trades. It’s been a while since I’ve used a stop loss. I have enough experience to understand my trades and control my emotions. And in time you will quit your stop loss as well. But if you are a novice in trading it’s a good tool to use. People struggle with emotions during training – it’s human nature. Having a stop loss will prevent you from having negative emotions.
What I use though is a daily stop loss – when I reach it I’m done for the day. Obviously something is not clicking, better enjoy other things than do something that I might regret.

Like I said in the previous post there are three aspects of trading you need to work on: money management, strategies and psychology. I will try to give you a few advices on each of them.

Stacking:  you need to identify the level of loss (per trade and per day) that would put you in an anxious position and set your risk well within that level. When staking to much panic occurs and that’s where you are vulnerable. If you are trying to recover a loss take it piece by piece, you don’t have to get it back all at once.

Use progressive stacking both for entry positions and for exit positions. Nobody can predict what will be the highest/lowest point of the market. You don’t want to go full stakes only to see that 20 minutes later the odds have doubled. Gradually enter the market and if it’s the case add more.   

One of the most common rookie mistakes in trading is you tend to close the winning trades too soon reducing your potential profit while the loosing trades that are supposed to be hedged are left to run hoping for a comeback. This way you might need two or three winning trades for one loosing trade just to break even.

Another common mistake is to stop/minimize your stake when you’re in a good run.  Let’s say you had 5-6 consecutive winning trades and you’re looking at a decent profit half day with 3-4 matches still to come. The mistake here would be to stop or reduce stake when you should be doing the opposite. You are in a confident mode, you are already in profit this is the time to push on and maximize your profits. This happens because of a common misconception that if you had a number of consecutive winning trades, surely a loosing one will follow; no trade is influenced by another trade. There have been researches showing that when in a good run a player has higher changes to strike positive. Whilst in a bad run when you should stop or minimize your exposure, you raise the stakes and try to make up for the losses you had.   

Recently I’ve gone through a rough period, one of those bad runs that inevitably occurs in any trader’s career. For about 1 week my strike rate was around 20% (1 winning trade for every 5 loosing trades). I remember in the early parts of my trading this were the times when I would have blown more than 50% of my bank. This time I lost around 5% of my bank. I understood what’s going on, I lowered my stakes and eventually I took a couple of days break. It’s not the first time it happens and surely won’t be the last time.

When a trade goes against you have a couple of options:

1.You hedge. If you don’t have a clear opinion of what you need to do, sometimes is better to close the trade and move on to another market. Start fresh with a new trade.

2. You add some more – just because the odds move against you for a short period doesn’t mean you are wrong. Any player can have a slow start. It might be a good idea to add more giving you better average odds. Be very careful when using this strategy, if the player you are backing is loosing 6-3 6-2 for example, you’ll be digging your own grave with every stake you add.

3. Switch your position and back the other player. It’s important to stick to the trading plan. Switching positions from one player to another can be very dangerous, especially if you are looking at a rollercoaster match and can lead to heavy losses.

However sometimes switching your positions to the other player is part of the plan. Let's take this example:





At some point I placed a lay bet on Lucas Rosol. Yuki Bhambri was leading by a set and missed three consecutive match points. This is the point where I switched my position. Bhambri is a 23 years old wild card with no victories this year, it very likely that his confidence is affected by the missed chances. If you are unsure that switching positions is a good idea then hedge and wait for another opportunity,


Strategies you can use in tennis trading:

Prematch trading: great for making profits before the match and taking this profits inplay. Best used when taking the opening odds in pinnaclesports and/or other soft books and lay when the odds drop in betfair.  A word of caution here, Pinnacle sports operate with a 2% betting margin, meaning you need to odds to go in your favor by a few percentage just to break even. Only go for the odds that you are absolutely sure will drop.
It is also possible to back/lay in betfair a day or a couple of hours before the match and hedge the profits before the start of the match. I posted two videos on youtube with some tips and advices for this strategy:    

There are a couple of situations when the odds will drop:
1.   the opening line was wrong; Marathonbet/1xbet is the first bookie to offer odds for a match and some of this odds are a joke, Very often you can find odds 15-20% higher than what should be but there have been cases when the odds where 50% higher. Huge value on some of this matches. Last time I checked my marathonbet account lasted 2 bets before I got limited but if you are in a country where marathon give you decent limits this is a good area to exploit. Doesn’t occur very often in Pinnaclesports. 

2.   the odds will drop because of an event: injury in the prior match, injury during training, the player retired from the doubles match (it is well known that most of the players also play in the doubles circuit), late arrival in the city where he plays, a player is tired because of a marathon match(most commonly happens in men’s grand slam tournament matches)

3.   The odds temporarily drop and then revert to it’s original opening line – this usually happens when too much money is match on the same player in the same time. Could be someone who think the odds will drop but failed to read the odds correctly or just someone who placed a large stake.




4.   A player gets massive support from the gamblers.


If a player is a heavy favorite (1.05-1.15) and you think his odds will drop you might consider backing the handicap/under games instead of backing him to win the match. The reward can be higher.





I plan to make another article with some inplay trading strategies in a couple of weeks. Hopefully by then I will have some videos as well.

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kapetan1122
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Re: A guide to trading
« Reply #12 on: February 24, 2016, 06:11:56 PM »

Another great article,just keep them coming.
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davidelliott52
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Re: A guide to trading
« Reply #13 on: February 25, 2016, 11:49:51 AM »

great article thankyou. im going to read both posts 3 or 4 times and then start to have a play.
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De Graaf
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De Graaf

Re: A guide to trading
« Reply #14 on: February 25, 2016, 05:05:28 PM »

Thank you Archi. Good luck on your web page endeavour .
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