Finding Definitive Value in Betfair Sports Betting and Trading Part 1 of 2
Betfair trading has been established for many many years now and continues to thrive. Traders like myself, Ryan and Adam have thrived from the markets for years, some like Richard Futter have been making a good living from them for around a decade and a half!
So why is it that the good to great traders are able to keep making money trading sports on Betfair? Why do so many others struggle to do so?
There are more reasons than I can list here but here are a few of the key ones.
- Lack of knowledge
- Lack of talent
- Lack of discipline
- Lack of research
- Lack of software
- Not using some simple maths
Fortunately, not everyone wants to make money or a living on Betfair, most people who use the exchange are punters and not looking for edges on the markets. As you are here at BetfairTradingCommunity.com you are already well ahead of those people in terms of ability.
There are a lot of 'lacks' in this list and the reason for this is that Betfair trading is a career and lifestyle rather than something people are born with. I see trading on Betfair as an education for new traders, much like a college or university course, you will probably end up paying for your lessons to begin with by not making a profit but if you stick with it and really put the effort to learn it you could potentially have a career for life.
I want to talk about 'Value' today and a very simple way to start to learn how to find it. There are many ways but today I will just give you a really easy one to start off with and if you take it in and practice it, I will be surprised if your trading on Betfair does not improve in the long run.
This Betting and Trading strategy has worked well for me for many years and dates back to when the first Professional gambler I ever knew told me 'Before you look at the odds, think about what odds you would price the market up at. If the odds are bigger in real life that yours then back it, if they are shorter lay it.'
I have developed this idea and will explain it now: (Value is not an ambiguous term in betting to me. It simply means a price that is bigger than it should be. This is the mental approach I use when talking about value.)
How to find value in sports betting markets:
- Knowledge and talent (talent is just applying knowledge correctly here) - the most important thing here is that you have a fair idea of probability in the market you are looking at, what I mean by this is that you have a rough idea of what to expect the odds to be. For instance I know that if Roger Federer played Rafael Nadal whilst both were in peak form on hard court, they would both be close to evens, perhaps 1.8 Federer slight favourite. So in this example if Federer was priced at 1.5 or less on the Betfair betting exchange I would lay him, if Federer was priced at 2.2+ I would back him. Some people struggle mightily with this idea, the idea you would back or lay the same person based on odds but actually it makes a lot of sense when you think about it. Luck is a factor in trading and as a result we do not know for certain what will happen in the match, however, we do have a good idea about the chances of each player winning as a result we have to back whoever is priced way above our expectations. If I tossed a coin and you gave me 2.1+ odds on tails I would take it all day. Would you? If not you need to look at yourself because this is mathematical value. This is similar to what we are doing with the back and lay based on our opinion that the odds are wrong.
- Use some simple maths to get you started - Look at odds as a percentage! I am astounded how many traders do not even know the percentage of odds being offered. For me it is the most vital thing to know. If I am backing something I want to know if the difference if a market is offering me a 50% win chance (2.0 odds) or a 25% chance (4.0 odds). How can I determine value without that knowledge? One really good way to think about an outcome is to think 'how many times out of X would it win?' If it wins more often in your opinion than the odds being offered suggest then back it. If it loses more often than the odds suggest then lay it. I would happily back a 10.0 (9/1) chance if I thought it would win 1 out of 5 times. Sure that is only 10% but there is value in the 10.0 (9/1) as the market is offering me odds saying it has only a 10% chance of winning, whereas I think it has 20% chance. Trust your judgement until proven otherwise and if after a long series of bets you have found yourself losing money then you need to work on your judgement and where it is going wrong and becoming innacurate.
- Use software as your starting point - As a member of Betfair Trading Community you have access to two pieces of unique software for Football and Tennis trading. These are statistical prediction models and serve as a great starting point to your daily research. Make sure you use them everyday and take a bit of time to learn their potential, Adam has worked so hard to give us this starting point to find an edge and we are so grateful to him for that but if you don't use it you are wasting the value of your membership. It is also important to use trading software if you trade rather than let bets run, there are many trading softwares out there as you all know and they are very cheap.
Ok that's it for this blog post will get part 2 up in the next few weeks!