How to Guide – How to open and close a trade

Many of us take for granted some the things we do on a daily basis. But for many of the new (very welcome) visitors I have, trading, Betting exchanges, back2lay, green book and the endless jargon we use are completely alien to them.
I want to change that. So some of my content will concentrate on helping “newbies” (btw I hate that term) kick start their betting by learning some new techniques. On this page I am going to run though one of my back2lay trades as an example.From the start to the end. As you can see it includes a video. I recommend you read the text first before you watch the video.

I advised this trade around 10:15 on !6th February. My Back2Lay and Lay2Backs go up around that time most days (except Sunday). The whole idea of this type of trade is to back the horse at the price advised as I think the price will shorten enabling us to LAY the horse later in the day, usually in the last few minutes before the race begins to lock in any profit the drop in odds has produced. The technique I show works exactly the same for any profit OR loss that may have been incurred.

The format used is as follows
2:30 Wincanton Old Tricks 9.0 Stop Loss will be 10.5

To break this down, I am recommending a BACK bet of Old Tricks in the 2:30 Wincanton. The price I advise is 9.0.
What I do not recommend is you “chase” the price down. Very often at this time of the day, especially mid week there is not a huge amount of “liquidity”
JARGON ALERT:
Chase: Take a much lower price because thats the best price you can get.
Liquidity: The amount of money that is available to be matched.
In the screen shot you can see that in each box there are 2 numbers. The top, bigger number is the price. The smaller number underneath is the amount of money that is available to take. If your bet exceeds this amount the price will change to pink and move to the lay side. It will then be offered to other users as a LAY bet. If they take that bet your money gets matched.

prices explain

 

 

 

 

Execute the bet and come back if you can in 5 minutes. Most of the time the bet has been taken. If you have a portion of it matched and it’s moved down 3 ticks, unlucky. If you take the 3 tick reduction in odds, that may be the difference between a winning and losing trade. It is important to make some distinction between odds. I the price is 2.6. 3 or 4 ticks is an acceptable movement to get matched. If it is 12 the 3 ticks gives you 10.5 or 8.75% of the price. 3 ticks off 2.6 is less than 1%. This is important.
JARGON ALERT:
Tick: A “tick” is not a parasitic arachnid. Neither is it a the sound the big old clock makes in your Granny’s front room. It is the increment between each price point.

If something ugly is happening and an exit is required I usually tweet that news.
The next part of the advice message is regarding the Stop loss.
JARGON ALERT:
Stop Loss: The stop loss is an mechanism we need to have in place to protect ourselves form a loss that is heavier than the potential reward of the trade. In this case a LAY bet to close the trade for a loss that does not exceed 15% of the stake used.

I have calculated the stop loss to ensure that we do not loss more than 15% of our stake. It is inevitable that from time to time this will be needed. If it were possible to get every trade right I wouldn’t be writing about it at 10:30 on a Sunday night. I’d be in a strip club somewhere.

So the trade is on, our money is matched. I am fortunate enough to be able to keep a close eye on my trades all day. If your sticking any serious money on them it would be foolish not to. It is possible to use software package such as Gruss or Bet Angel or the Geeks Toy to do this for you. But the nature of the markets mean that quite often there are gaps in the market that trigger the stop loss. You end up losing when the price didn’t drift out that far.

We then come to the point when you want to either take your profit or cut your losses. The technique is the same. I use software to do this. it takes 1 click of the button, all the calculations are done for you. For the purposes of this video and the target audience who will not have any software I wanted to show the old fashioned way. The new Betfair interface (which i hate with a passion) has a feature called “Cash Out”. This is ok when the market is static, but win the last minutes before a race it is useless.
Btw: If any of you have seen the Betfair tv advert showing this feature on the Man Utd v Everton 4-4 game when he took 1.14 at 4-3. After dithering at 4-0, 4-1. and 4-2 all at 1.01 to take a poxy £28 something. If you have a chance to lock in any profit at 1.01 you would be an fool not to. :-)

This trade had the added complication of a non runner. This happens frequently. So it needed to be shown anyway.
Betfair have a version of the bookmakers Rule 4 called reduction factor. It is a mechanism that reduces the odds by a predetermined percentage to take into account the reduction of the book percentage. More jargon, but it’s not that important at this stage.
To find out any non runners and their reduction factors you need to click on the rules tab. This shows the information you need. It makes no difference to any calculations. It just means your price will be smaller, The whole market will be reduced so it’s all relative.

There are a couple of options now. You can take the profit or loss equalised across all the runners in the race. So that you get the same no matter what the result. This is known as “Greening up” this is because all the runners have a nice green number next to them, green = profit. red is loss. Redding up is a term used if every runner has a loss. Another option, if you are in profit. is to Lay the horse at the lower price for the same amount of stake that you initially used. This will give what is basically a free bet. No loss if it loses, but a very handsome return if it wins. The back2lays have a long term winning strike rate of over 20%, and are in profit over the long term. However, this is a not what I am interested in. I always lock in my profit before the race, across all runners.

To take the “green up” option as I have in the video. Click on the Pink box next to your runner at the price you want. Be quick as the prices change quickly. sometimes for the better, usually for the worse. The next stage is to click on the box above where the stake is inserted It is labelled “Your Payout”. Click on the radio button that says “Payout”. You need to enter the sum of your potential profit to your stake used originally. Enter that amount in the box and click OK. The stake Betfair has calculated will automatically be in the box. Before you click the “place bet” button have a look at the “what if” figure. This is the column to the right of each runner that gives the new position if you trigger the bet and it is matched.It should be the smme all the way down. If it isn’t you have not added the numbers up correctly or the “pay out” button hasn’t been selected.

it’s then a case of placing the bet. Don’t panic if your not matched immediately. You need to judge if the price has raced out against you if you need to cancel the bet and start again. The closer to the start the more volatile things get. Start out by closing the trade 7 or 8 minutes out. It’s hard to teach you this, it comes with practice and will drive you nuts. You close the trade and then watch it move in another 5 ticks while you hold your head in your hands. hey, it happens to me often.

So that’s about it. Except a heartfelt plea from me.
PLEASE WHATEVER YOU DO, DO NOT THINK BY LETTING THE BET GO IN PLAY AND HOPING YOU CAN AVOID ANY LOSS.

Here’s the video. I am sure that many of you will exactly what your doing. This is for the other guys. Please feel free to ask any questions, however silly you think they are. i won’t judge, I want to help. if you wan to keep your question private – mention that too.

7 thoughts on “How to Guide – How to open and close a trade

  1. Max

    Hello, thanks a lot for all your efford, all these articles are very helpfor for who, like me, is just starting to getting close to trade.
    All you said was very clear, but let me ask you something:
    Can you specify wich are the key factors to individuate horses that probably gonna let us make a profit using Back2Lay?
    Watching your videos i can’t really understand, you basically look at the volume of betting and the graphs of each horse… can you just help me out understand better ?

    Cheers, and thank again

    Reply
    1. MG Post author

      Hi Max, The process is simple, but lengthy to explain in type. Hence the videos. The volume is ensure the reliability of the movement in odds. It validates the graph in effect. I am looking for horses that are supported with the volume to confirm this. The 2nd part is the bookmaker odds need to be close to Betfair odds. Why would you back a horse on Betfair at 6.2 when you can get a comm free bet with best odds guarantee at Ladbrokes at 11.5? Making money doesn’t have to be a complex process. If you watch the video everyday you will pick it up. MG

      Reply
  2. Alan

    Hello
    Nice to read your Blog, I have been using Bet Angel for about 6 months, but admittedly the first 3 months were wasted with me being totally undisciplined and stupid.
    I was trading, well that is not true, I actually Laid anything around 8.0 for £11 each race until I won £70 then stopped, worked well, but, as you well know the winners started to come and bang I would lose 3 days money in 1 hit.
    My next brainwave was using the automation on Bet Angel, settings were set to back the leader, or the winner I thought at between 1.28 and 1.32 striking hopefully at 1.3 for £100 a race, disaster, lost all confidence.

    Finally with me going out of my mind, I realized that the only way was to trade before a race and get out before in play, I practiced every day for 30 days practice mode. And I began to read the graphs and watch the resistance levels etc etc, and gradually I began to see if I wanted to earn a wage from home, this was the only way to do it, If I wanted trading the horses to work.

    I can honestly say I use £50 to £100 trades on the ladders, your videos have been a great asset to me, thank you, I am now confident with my trading using a stop loss prior to the off has been a godsend.
    I now trade each day apart from Sunday and really enjoy it, I obviously have a lot to learn, but the biggest lesson I did learn was never ever go in play and it sure does bite you on the bum that is the only certainty if you don’t get out before the in play.

    Regards
    Alan

    Reply
  3. John

    Very nice video and although I understand the concept of this type of trade its nice to see it done the old fashioned way. I have started using BetAngel and it makes things a lot easier than the video to do. I calculate my liability with an online calculator like trickybet.net but your way was a very experienced way of doing things. Shame about the older video but your newer ones are much better.
    PS your stakes put my £2 and £5 bets to shame!

    Reply
    1. MG Post author

      John, I started with £2 and £5 stakes. learn the trade before getting carried away. It’s just as easy (in fact easier!!) to lose than it is to win – Cheers MG

      Reply
  4. william

    Hello i been trading for two months now, i have been reading and watching videos for around four months, videos are ok but not many were they to help when ladder goes against you, there was a lot of what if’s from my end, i came across Badger on utube and great he tells you everything you need to know, what to look for when to trade he was a great help, i have never used the stop, how does this work, say i put a stop on after i layed or back bet 2 ticks away when it hits stop does it trade out for me at a small loss, also to red up and get out are the red down the side of the ladder same as red at top of ladder face, so this gets me out for a small loss, am i doing the right thing, put in lay bet just before start and soon as race starts just back at price 5/6/7 ticks up and let it roll, i have been doing for a few weeks and every time i get a good match, but all the help you read about tells me a big dont, i have done greeks, betangle trail period, just about to do Fairbot and racingtrader are there anymore around until am ready to up my stakes and purchase a site for a year, as now i would be out of pocket as trading with 2/3 quid am winning pennies, unless i do in play late back bet, thank you william

    Reply
    1. MG Post author

      I am a bit confused by your post. If you are asking about using a stop loss while trading Racing during live show (last 10 mins) I strongly recommend you avoid it.

      Reply

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