Profit is made when you buy stock

There is an old saying used by shopkeepers that goes something like “You’re profit is determined at the price you buy in your stock”. As you all know, I love a saying 🙂

So what has this got to do with trading on Betfair? Well more than you would imagine. Something that is debated at length and many seems obsessed with when looking for an entry point is ‘which way is the market going to go”. This is easy to get swept up with. After all if you can predict the direction of a odds move if it pretty much a licence to print money. But it isn’t that easy as many of you know. As odds move they take many twists and turns along they way, it’s easy to bottle it and be over cautious or be too “hung ho” by which time the old “well I might as week wait to see if it comes back now as I am up to my neck in shit here” thoughts start to creep in.

There are many signals that show a price may be about to move, depending on the volume and odds coupled with fill rate, these are sometimes more subtle that others. But there are simpler ways of making money than the almost impossible “which way will it go” game. Which brings me back to my shopkeeping adage.

When the Greengrocer is knocking out his bananas at less than half price as they reach the end of their shelf life do you suppose he is making a loss? Unlikely, He was smart when he bought them, he knew when he ordered that extra 6 boxes he was taking some risk, but the weather has been nice, and when that happens he usually sells more. Shame the weather changed mid week ! But they were a great price and he got a good discount for the extra volume he bought. He factored in that he may be stuck with some if the weather turned, that at some point he may have to discount some stock.. But the discount he got when he bought them will offset this potential risk. If he doesn’t sell the extra boxes, he will be able to sell them at just below cost price for sure, but he may sell them all at full price and make a handsome profit. Realistically he will be some where in between.

So why can’t we do the same?  When we open a position, should we not factor in what happens if we get stuck? i.e The odds turn against us. But if we enter at a price that has an exit point “just below cost price” – I am not talking purely about a tight stop loss position, I am taking about a position where something needs to force the odds somewhere it doesn’t naturally want to go. Then it’s completely likely if we judge our position well then we can make some if not considerable profit if the odds move in our favour.

This is what this video is about. Not a banana in sight. 🙂

Breakdown:

My opening position is based on 2 factors. 1) I have a good exit plan. There is a step in volume just below at 3.75 – This isn’t rock solid, but it’s a long way from the start of race. I judged it enough though. 2) There was pressure on it from the favourite.

You may be asking “Why didn’t you just back the favourite”? – Well there are a couple of reasons. Firstly I have the possibility of my lay bet going over the cross over in odds at 4. This will have the effect of doubling my profit per tick for no extra risk. So it is basically leveraging your investment. The other factor is, that if I am backing a runner, in a market like this I am relying on no other runner being supported. By Laying Satanic Beat, I have a chance of back up if the odds move on Gabriel The Great reversing. As proves the case. Although there are lots of mistakes in this trade. The point of me showing you it is hopefully make my point. If you entry potion is sound, there is room for some error. This wasn’t too difficult to spot., but it had control and the exits well covered. The added safety of enhanced profit for no extra risk too. I didn’t make the best of it towards the end, but the methodology is basically sound.

As always I welcome your comments and questions

Cheers Steve

13 thoughts on “Profit is made when you buy stock

  1. If anyone has found this site by accident or chance as I did or as Steve told me recently maybe some sort of karma maybe I was meant to find it. Either way, read everything watch all the videos work hard and learn. After 30 years of gambling( I started young lol) and 10 years of playing about on Betfair, I wont call it trading. Steve and his blogs seem to have turned the light switch on Steve the Sparkie. I spent a week reading and watching everything and have traded all this week, with a profit everyday, small profit but a profit and from a £100 bank today traded on 14 races, no losses and £28.19 profit. I know very small pathetic amount but got to start somewhere. and have got more confidence from that than losing £500 which I have done thousands of times. Thanks for all the time and hard work you put in your blogs and videos, I for one am very grateful and cant wait till September. Thanks again your a star have a great weekend. Not going to trade tonight going to have a beer and watch the football.
    PS If you need some inspiration Check out the inspiration page Its amazing.
    Andrew

  2. Hi Steve

    You might want to look at your recording software settings, as the resolution wasn’t great on this one and I found it hard to make our what you were saying. 🙂

    Jeff

    • Thanks Jeff, I’ll recheck them. I made a minor change, obviously it had affected something.thanks for the heads Up -Steve

  3. I didn’t mention the only downside I have found. I do now find myself talking talking out loud or to the laptop and can be heard sat at my desk saying out loud ” the fav is at the bottom of its range the 2nd and 3rd favs are approaching xos, if 1 of them breaks through this fav is going to fly out” Have a good day
    Andrew

    • hi mate,i really struggled today,every time i went in it went oppisite directions i wanted it to,i think ill rewatch your videos.

      • terry – some days are like that. take it steady. Maybe re look at making sure you have your exit covered before you enter. You wouldn’t run into a burning building if you know there wasn’t another way our would you 🙂
        let me know what I can do to help mate – cheers MG

  4. Hi Steve

    Thanks for another great vid.
    I noticed on an earlier video that you were using the geeks toy, and now you have
    reverted back to betangel, I was just wondering your thoughts on the 2.
    I have been using geeks for a while and although a very versatile piece of software
    it does not have the coloured last traded amount which is very useful. i noticed though
    you managed to change the colour to green on your geeks traded amount column.
    How did you manage this?
    Once again steve i would like to say thanks for the great content in this blog. The one were
    you were swearing like a trooper was my fav not only did it make me p*ss myself but i
    can very much relate to this in my day to day trading.

    Ian

    • Thanks for you comment Ian – Glad you enjoyed the fruity language – The old lady next door who is subjected to it daily when she is in her garden isn’t so keen 🙂 Cheers Steve

  5. Hi steve,im takeing a break for a few days,too scared to enter any market today,ive just lost total condfidence after yesterday,im going to try and find time and re watch your videos again,you make it look so easy,hopefully one day ill get to that level.
    cheers
    terry.

  6. Hiya Steve

    Thanks mate. I’m sure I`ll get somewhere not sure where but there are men circling the house with white coats as we speak lol. I’m up to 3 f..ks and 1 sh.ts per trade at the moment. What’s your record? and what was the race/event and did Barney Curley have a runner in the race I’ve analysed the data and got my entry point at 15 and exit point at 20 but thinking I could be way out lol. Hope you’ve had a good day Keep smiling
    Andrew

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