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What separates the winnings traders from the losing ones?

If you ask me what the number one thing that defines a good trader is (apart from discipline and bankroll management) I would say choosing good entry and exit points. It is almost an art form because hitting the perfect entry and exit point is near impossible. However, hitting ‘good’ and profitable ones is very achievable if you know what to look out for.

I think this is easier to do in swing trade sports such as Tennis, Cricket and American Football. The reason being that the odds are ever moving, point by point, ball by ball or per possession of the football.

Below is a typical cricket match:

What you are looking for as a trader is a situation where the market is wrong and has over-reacted to an event. The best situation is when the market is acting as if the game has finished in terms of offering a very short price on the favourite (sub 1.1) when there is still a long way to go.

I do 90% of my trading in-play because I find it easier to spot these points where the market is over-reacting. However, this can happen pre-match, it is just rarer because the market is a lot more static and ‘panic mode’ does not hit people.

Learn the sport you want to trade, watch the teams/players, notice how the market reacts to certain events and study any patterns that develop. When you have done this and learnt a sport well and know the teams/players involved you should spot prices that surprise you. If a price shocks you pre-match then this is a good entry point, especially if you think the underdog’s price should be shorter. I think a mistake traders make is that when they are shocked by a price pre-match they often assume that they are the one who is wrong not the market. It is very hard to go against a crowd but that is often the best way to make money trading. If an underdog is a bigger price than expected then by all means lay the favourite, this is a good entry point.

Missing an entry point

If you miss a good clear entry point do not try to correct it by making the bet anyway at worse odds, this is one of the biggest errors traders make and can quickly lead to the poor house. This is because the entry point is where the value should be, if you miss it the value is likely gone. Just move on and remember the entry point for next time, there are many markets to trade per day so don’t beat yourself up about missing one good opportunity.

As a rule of thumb here are some good entry and exit points (these are not hard and fast rules and you need to have a feel for this yourself when trading).

Tennis

Entry:

• At start if the player you like is big underdog
• At the end of first set if the favourite loses it and is now odds against
• When a player on ATP tour is a double break up serving for the set – if they win the game their odds will not drop much further, esp if pre-match fav, however a point or two against them and a few ticks can be gained. This is virtually risk free because at the end of the set price on fav often rises as layers look to enter, so even if they win the game to love you may get scratch or one or two tick profit. Works especially well with weak server (Simon, Seppi etc).
• When a favourite pre-match is a set and a break down and you know they are a fighter!
• When market thinks a match is over – sub 1.1 or less with plenty of the match left (works better with closely matched players or when underdog hits sub 1.1)
• In WTA when a player you want to lay is serving first, don’t lay if she is recieving first wait until your player holds!

Exit:

• End of a set – new set often means new motivations
• When your player gets a break
• When your player breaks and holds
• Often I will get some liability out every time the odds swing in my favour drip backing my lay back (more about that later!)

Cricket

Entry:

• At start if underdog is big odds and being underrated
• If team you want to back has just lost a wicket – often ticks can be gained before the next ball is bowled, or one boundary will shoot price in your favour (this works well with underdog as if two quick wickets you will not get too damaged laying at heavy odds on)
• At the start of second innings (ODIs) when market has written off either side completely (works better with evenly matched sides and below 1.1 price)
• In a test match when draw is heavy odds on after only one day (check weather but as my old man has always said no-one ever got poor laying the draw in test cricket!)

Exit:

• When market has gone too far in your favour
• I exit quickly a lot of the time as cricket can swing the other way quickly
• Drip backing your lay back bit by bit works very well

American Football

Entry:

• When heavy fav scores first – market often thinks game is done
• When fav is a couple of TD’s behind and now big odds with plenty of game time left
• At start if fav is very short and dog usually starts well

Exit:

• If backed dog pre, if they get up early or price goes your way significantly
• When scores are level and there is only a couple of drives left, time is running out so this is more like a lottery
• When your team has come back to parity from being behind or is close to it

These are just a few examples of great entry and exit points, which if you can execute them, will lead to big profits. That being said knowledge of the market you bet in and teams/players is paramount as game selection will also define your success as a trader. For example, in tennis the key players to study and learn about are the ones who like a good comeback. Fabio Fognini and Alize Cornet are famous in the trading world for doing this! When you study the game you start to see that certain players almost seem to have obligatory three set matches regardless of who they are playing (Andy Murray of old and Gilles Simon instantly spring to mind). So make notes on this, it means that even if you miss a trade whilst watching a match the time is not wasted you have learned about the players in front of you.

Taking a loss/Redding out

As I mainly lay at short odds I only really red out if I am convinced I made the wrong bet or if a match totally goes the wrong way and I can still get around 50% of my stake back. When laying at low odds you can usually get 50% of your stake back even if it goes heavily against you. For instance if the player you lay wins the first set.

So give it a go, start with paper trading or small stakes and see if you can regularly hit some of these entry and exit points. If you want more information on this topic just ask me on the Facebook page, I am always there to help!