Can you make a living betting on the exchanges? We consider the strategies that you can deploy...

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The advent of betting exchanges has revolutionised betting in the UK. It has transformed punting and bookmaking. To give an example, I was at the races the other day with a few mates and we were cheering home a couple of 20 to 1 shots winners. This wasn’t because we had backed them, but because we had layed a couple of short priced favourites to decent stakes on the exchanges in the morning. This is because the exchanges have allowed punters to become bookmakers, and turned bookmakers into punters. You can change your role from race to race or play both roles at the same time. There are simply so many more opportunities to make money from betting since the advent of the exchanges.

You do not simply have to back and lay to make money. There are plenty of people who trade prices on exchange markets to make profits regardless of which horse wins or loses a race. These traders are operating like stock market readers and are trading in and out of the market and making money on fluctuations in the odds. For example, if you see a horse plummeting in odds then you can make a trade by backing it at one price and then laying it a second later at a shorter price. You could make these trades scores of times on the same horse or you could trade other horses in the same race if their odds started moving in one direction or another.

The betting exchanges effectively encourage this form of activity because it brings increased liquidity, as large sums are constantly brought in and out of the market. For instance, BetDaq and Betfair allow computer boffins to produce programs that can access something called their API, which is jargon for basically allowing a computer a direct line into the exchange, making it possible to make scores of bets within seconds. It also allows one to play computerised betting strategies. However, you don’t need to be able to program a computer to make use of this innovation.

The opened minded policy of the exchanges has resulted in some great software that allows less computer minded types to trade in a fairly sophisticated way. There are lots of products in this area. Betting School Report provides invaluable reviews of all the main products. I’m therefore not going to recommend any particular product because it depends on what type of strategy you want to employ. However, I think the Bet Angel software is worth a mention because this company provide a free product called Bet Angel Basic that enhances the Betfair website interface. The software allows automatic refresh of odds and features a ‘green-up’ option that is a useful tool for guaranteeing that you make a profit out of race, regardless of the outcome, provided that you have a successful trade position.

Exchange trading though is just one possibility for making a profit. I know of some big punters that mainly play the in-running markets. They like to back big at very short odds on horses that look certain to win, provided that they don’t do a Devon Loch or Dayjur inside the last few yards. As the latter examples testify this form of betting isn’t for the faint hearted but if you have rapid reactions you can steal some money out of the market. But beware…

I’m certainly not going to tell you that it is easy to make money from betting on the exchanges. For the uninitiated there are plenty of ways to lose your shirt, and I for one have spent plenty of money on shirts in my time!

As I suggested earlier betting in-running is a specialised form of betting and to be honest I haven’t really made it work for me. Certainly I’ve had success. I once got into the mindset that I had discovered the key to the mint when I started to play the in-running markets. I simply bet big on what looked like near certainties and must have landed scores of successful bets. However, you only need one or two mistakes if you are backing 1 to 20, 1 to 50 or even 1 to 100 shots!

When betting in running I think the most important thing to know is to know thy self. I know that I’m a greedy fellow and so I can come unstuck when I’m winning. For instance, when I started to make what looked like easy money I couldn’t get enough of it. Thus, it simply wasn’t good enough for me to back winners or to lay near certain losers’ in-play. I had to back the winners and the placed horses in every race as well. This isn’t a good plan because the level of concentration required simply isn’t sustainable. It was only a matter of time before I made a mistake and after a few reverses I realised that this form of betting wasn’t for me.

Trading has advantages over betting in running because you can get out of a position if it starts to turn on you. This cuts your losses. Therefore one of the most important tips when trading is to know when to get out and to take it on the chin. The most successful trader will be the one who knows when to get out and quickly recovers their composure to make their next trade. The trader who attempts to chase losses should read Nick Leesons Rogue Trader and conclude that this isn’t a good idea!

In conclusion, the betting exchanges have revolutionised betting in this country and have created many more opportunities to make your betting pay. For instance, it is well known that the Betfair SP offers better value than the industry SP. I would therefore recommend opening an exchange account if you have not already done so because you can then start to play punter, bookmaker and trader all at the same time.

 

 

Want to be a trader on the betting exchanges? Then you will need the right tools for the job. Get FREE trading software.

There are a range of different trading software products that are able to link into the Betfair API, and a number of these offer free trial versions or free basic editions. One such product is BetTrader.

BetTrader

BetTrader was the first applciation to make use of the Betfair API allowing users to trade efficiently on the Betfair markets. It has undergone many revisions, continuiosly upgraded, and is now the most advanced Betfair sports API product on the market.

Betfair

Betfair is the world's largest Internet betting exchange. The company is based in Hammersmith in West London, England. Since Betfair was launched in June 2000 it has become the largest online betting company in the UK and the largest bet exchange in the world. Betfair claim to have over 2,000,000 clients and a turnover in excess of £50m/week.

A betting exchange allows punters (gamblers) to bet at odds set and requested by other punters rather than by a bookmaker. Members can make both 'Back' bets (normal bets on a selection to win) and 'Lay' bets (bets on the opposite side of the Back, against the selection), thereby eliminating the traditional bookmaker.

The Betfair interface can be seen as bearing a strong similarity to that of the Stock Exchange, with the 'back' and 'lay' options comparing to the buying and selling of derivatives. Indeed there are many professionals who play the Betfair market for profit, using purpose-designed software 'robots', in much the same way as a Stock market trader.