1. On the exchanges
Peter Webb picks up where he left off last month and looks at
even more ways of locking in a profit from betting exchanges
It don’t mean a
thing if you ain’t
got that swing!
L
ast month we looked at around the market and com- should expect to see lots of
how important it is to ing for or against a selection small gains and the odd larger
put a basic framework and your objective is to nip in loss but the total of gains
around your trading. and out of the market quickly should significantly outweigh
We showed an example where and make a little amount of your losses.
we pulled £45 out of thin air by money, doing so at the least ‘Scalping’ is typically trading
using a small stake and turn- risk possible. for individually small gains
ing it repeatedly through the Scalping, as with any other by looking to profit from
market. gambling strategy, does carry small price movements in the
This month we look at anoth- risk; the upside though, is it market.
er way to achieve the similar that doesn’t require that much Swing trading however,
thing but with bigger results thought because your focus looks at much broader price
and using a different style. is on very small price move- movements. While scalpers
Last month we were ments. are terrified of very large price
‘Scalping’. Form or knowledge of the movements because of the
‘Scalping’ is the name market shouldn’t greatly influ- potential for loss that they
given to the process of trading ence you. When you scalp, could bring, swing traders
money through a market for you are not looking to make love volatile markets and large
small gains per turn. a judgement on the broader price movements.
direction of the odds, which These traders are not picking
Scalping typically involves
horse is being favoured or lack up pennies in front of steam-
establishing and liquidating
rollers they
a position in the market very
quickly on very short times-
“It’s just like picking have usu-
ally decided
cales.
Your time in the market is
up pennies in front which steam
roller is going
usually measured in seconds
and your profit is generally of a steam-roller” where, and
try to choose
small on each turn.
one to hitch
While the individual profits favouritism, but you will make a ride on.
are small you can still reach enough of a judgement to ment the entry and exit at the
large profits overall by ‘recy- The problem is, choosing the end of a trade requires more
ensure you can get in and out
cling’ your money through the steam roller! The approach of thought.
without it moving significantly
market many times over ef- against you. a swing trader therefore, in In short, you need a reason
fectively multiplying the small terms of setting up a posi- to enter and exit a swing trade.
Getting the smallest risk
amounts to much larger ones. tion, is more in-depth than a Let’s look at a swing trade.
possible is clearly your biggest
scalper. In the first illustration you
The best, non technical, objective when scalping, if you
definition I have found for lose sight of that objective that They need to identify why a can see we have already at-
scalping is: ‘Picking up pen- steam roller heading toward movement of odds will occur tempted to catch a decent
nies from in front of a steam you may crush you! and over what time. Entry price move on Royal Dignitary
roller!” Profits are always limited and exit points are much more at Musselburgh, we failed.
This definition clearly cap- but your downside potential subjective to a swing trader We were expecting a drift in
tures your objective when you isn’t if you maintain discipline. and while they will always try the price of this selection so
are scalping. Money is rushing With effective scalping, you to get in at an optimal mo- we laid at 1.79. When nothing
50

2. occurrence if you are trying It’s also well known that big
to get a nice move in either gambles occur frequently on
direction. certain types of races and if
Not put off by these early you watch for a big gamble
set backs we lay again at 1.77, or know where it is likely to
soon after the price does in- occur you can benefit from the
deed start to drift a little and money that is going for that
go forward a couple of minutes horse.
later and you can see that the Both scalping and swing
price has drifted much further
trading are effective but it’s
from our entry point of 1.77,
important to note the differ-
out to nearly evens.
Illustration one ences between scalping and
As we are just before the
swing trading.
start of the race at this point
we need to close out our When swing trading your set
position. You can see that the up can be more or less similar
trade calculator shows us that to scalping but your approach
we have earned £130 for our to risk and losses is completely
efforts. Not bad for a couple of different.
minutes work! Your objective should be to
Of course not all swing get out with the lowest mon-
trades end up the same, but as etary loss as possible if your
long as you manage your posi- set up does not work.
tion when it looks like it is not This is because it is likely
going your way you only need that even if you call the market
a few decent winning trades to correctly it may take more
be on the right side of things. than one attempt to catch that
Swing trading without expos- all important large move. Even
ing yourself to adverse risk is then it’s quite possible that
really only applicable on the
you could still miss an oppor-
horse racing market.
tunity quite often.
This is because you can trade
in and out of positions with no You must accept that you will
risk on the underlying event, face a lot of small losses when
as it wouldn’t have started yet. swing trading in order to catch
It works well on horse racing the big moves. Swing trad-
because there is a lot of price ers actually face the opposing
volatility before a race starts. situation to a scalper from a
You can swing trade in other money management perspec-
sports markets as well, but tive.
Illustration two the only way to achieve this is Scalpers make small amounts
to be active and in the market and turn there money through
while it is in-play. the market quickly but oc-
If the market is in-play it can casionally lose larger amounts.
move against you and you will Swing traders though, typically
have to take risk on the under- lose small amounts often but
lying event. While it’s possible make very large, less frequent
little, as this wasn’t what we to be successful at this, it is a gains, in return.
happened we ‘scratched’ our
expected we immediately set- much tougher ride. Scalping and swing trading
position by backing it at the
tled for a £30 loss. Swing trading on horse rac- are two very different disci-
same price for no gain. ing is where form students
On our second attempt we Two attempts and two plines, if you can master both
can benefit from their betting then you will doing very well
laid at 1.77 but instead of failures isn’t a great start, but knowledge in combination
but typically most people pre-
drifting the price came in a this is actually quite a common with a trading strategy. If a
fer one style or another, either
horse looks fractious, recalci-
trant or there is a change in from a psychological or risk
Bet Angel is the premier trading the going, it’s likely to affect management perspective.
software for Betfair. For more details, the odds of a horse. People who have no opin-
Form students are likely to ion tend to scalp, those with
click the Bet Angel link at Racing be able work out how this will an opinion can swing trade.
Whichever you use both are
Ahead website www.racingahead.net affect the odds for a particular
selection. very viable strategies.
Racing Ahead 51