After writing an article like the last one, the question inevitably arises – why bother doing anything else?
I am not joking.
You’ve heard me talk about the dangers of systems hopping.
Well, writing a series of articles like the 7 Pillars inevitably carries the risk of creating precisely this kind of effect on my readers…. ‘ooh, that sounds so interesting, gee, I could make a lot of money with that… So, what else have you got?!’.
There is something about the endless abundance of choice that the Internet promises that runs, in my view, utterly counter to two of our profoundest needs – which are the requirements to focus and persevere.
So before moving on, I would like to ask you to reflect on your betting goals……
If you simply wish to make lots of money on the Internet, with the smallest possible amount of hassle, why are you reading past Pillar 3?
I am of course obliged to answer my own question, so I shall attempt to do so.
There are five possible reasons I can think of for continuing, only two of which are acceptable from the perspective of a serious sports market investor.
- Betting is a hobby of mine and I can think of nothing more boring than just using a banker system and doing nothing else.
- It’s good to have a portfolio of systems and I don’t want to over-rely on any one method.
- I’m too impatient to wait 28 years to become a millionaire!
- I don’t like systems that depend on predicting the future, even if the tipster concerned has an exemplary record in doing so.
- Systems are so interesting; so I’m keen to find out if you have anything better than the last one.
I hope you agree with me that only points 2 and 4 are valid reasons.
You may argue that the first one is all very well, and of course we live in a country where people are free to do what they like, but these articles are about making serious cash from betting.
Mug punting may be a hobby for some, but it is not what this website is about.
(And of course, if you find yourself seriously drawn to punting with money that really should be going on stuff that matters, please refer to Gamble Aware’s website and stop reading now).
If you answered 3, I really have nothing to say! Maybe you should check out the poverty rates currently offered by your local building society. Then kindly send a copy of your personal wealth-building strategy to email@example.com. I shall look forward to reading it.
If you answered 5, the answer is almost certainly No, I haven’t, and neither has anyone else!
I thought I explained…. A killer Banker system, with a sensible staking plan, is the Holy Grail of betting.
It combines a very attractive rate of return, simplicity bordering on effortlessness, and a comfortable ride courtesy of the strike rate.
It is a classic example of the Pareto principle, an “80/20″ solution (or indeed, more like a “95/5″ one!) whereby 80% of the value of an activity can be derived from just 20% of the effort.
What a Banker system cannot do is squeeze the last drop of value from the markets…….
So, for those of you who answered my question with answers 2 or 4, and who wish to scale the very peak of the Profit Mountain, we shall proceed, at last, to…
Pillar 4 – Trading…..
But first a little revision..
Betfair singlehandedly created the sports trading industry when it burst onto the betting scene in June 2000.
It had of course been possible to play the bookies off against each other beforehand, but Betfair was the first betting company to promote this type of approach via a single platform designed to resemble financial trading screens.
Betfair was a complete revelation to me, as no doubt it was to so many others.
To this day, I find myself seduced by the beautiful simplicity of its design.
Blue to back, pink to lay, and all those neat columns of numbers clicking up and down hypnotically as the weight of money moves prices around.
I remember reading Peter Lynch in Beating the Street reminding his readers they weren’t buying lottery tickets when they purchased a share, but investing in real world companies with staff and warehouses and plant and HR departments.
In short, don’t let the easy, sleek design of online trading platforms numb you to the brutal truth that it all still comes down to investing your cold hard cash in a real enterprise, with all its attendant opportunities and risks.
I personally despair at weight of money schemes, or analysis of resistance points and candlesticks a la Forex, or other ethereal methods.
If we are betting on a horse race, we are risking our hard-earned shopping vouchers on the likelihood of a particular wild animal galloping more rapidly across a field than a whole lot of other wild animals, and we should never forget it.
If at all possible, make time to watch the race after you have traded.
Keep it real.
Contrary to a million sales pages, I therefore do not believe there is a Betfair code to crack. It is the easy seductiveness of the Betfair interface that lures us into believing otherwise.
In my view, there are just two ways of making money from trading:
- Technical trading – finding and exploiting wrinkles in the fabric the markets are woven from.
- Psychological trading – benefitting from human behaviour, especially herd instincts and over-reactions. I will deal with Psychological trading in Pillar 5.
Of the two, technical trading tends to surprise people more.
The idea there could be flaws inherent in the design of the markets seems almost preposterous.
After all, thousands, maybe even millions, of people are poring over them.
Could they really contain a design flaw that almost everyone else has missed?
And yet such flaws exist.
It is based on an idea so fundamentally wired into the design of sports markets it’s difficult to see how it could ever be made redundant.
Such methods are a sheer delight, as they provide consistent tax-free profit opportunities without prediction risk.
I used to believe such strategies were too good to be true, only to learn the too good to be true mantra was itself based on irrational thinking.
But to show you these opportunities are real, I’d like to expose one RIGHT NOW in Betfair’s design.
As with the idea underpinning SkewTrader Pro, it is so wired into the structure of the market it could simply never be ‘fixed’ by some theoretical betting overseer.
So without further ado, climb aboard my friend, and welcome to Betfair – the world’s biggest roulette wheel!!
(Sorry – I’ve been longing to use that picture for ages!!).
Price Boundary Trading.
OK to business!
Betfair provides a series of discrete price levels at which you are permitted to back or lay.
If you wish, for instance, to back below 2, you can bet at hundredths of a point.
If you bet between 2 and 3, you may select fiftieths.
Above 3, Betfair moves to twentieths, and above 4, we are offered only tenths.
This effect continues all the way to the long end to the book, where prices widen out to gaps of ten points. Thus the price offered immediately below by 1000 is 990.
995 doesn’t exist in the world of Betfair!
The idea that you may wish to take a price that Betfair simply doesn’t offer has quite profound implications. For it follows that, at the boundaries where the gap between prices is lengthened, there exists a technical opportunity.
Lay at (or just below) 2.0, and if the market moves against you by a single tick, you will have to trade out by backing at 1.99, and thereby risk losing one hundredth of your stake.
However, if the market moves one tick in your favour, you will be able to lock in a profit by backing at 2.02, thereby securing a potential positive return of 2/100ths.
I hope you can see the potential here.
All other things being equal, markets are just as likely to move up as down, but in this case a tick upwards pays twice as much in profits as a tick downwards does in losses.
Clearly, to make this work, we will need to play with very large stakes in very liquid markets. I have regularly made this pay with £2000 stakes on the Over/under 2.5 goals market for a number of Premier league football matches. For every tick in my favour was potentially worth £40, whereas every tick against only worth twenty, which was a pleasant position to be in.
I have even traded matches that repeatedly play up and down across the boundary, and managed to lock in a series of satisfying back-and-lay pairs either side of the 2.0 line.
A quick way of finding teams whose odds sit on or near the boundary is to go to www.bet-mate.com and select Betfair Live Coupon, and a particular day you’re interested in.
You can then sort matches into ascending prices - e.g. All odds for home teams from lowest to highest.
Then just pick out those teams with a price around the 2.0 point. (Acknowledgment – the Bet-mate idea was brought to my attention by the Ultimate Pre Kick Off Football Trading strategy, which contains no less than 23 strategies and is currently on long-term test on my site).
This trick works just as well on all the other price boundaries. Laying at 10 is a personal favourite as the next tick up is 10.5, whereas the next one down is only 9.8…. Thus you can make 50% of your stake in one direction, but only lose 20% in the other.
Now liquidity can become a problem as prices extend, so initially I’d recommend you stick to the short end of the book. But of course, it doesn’t have to be restricted to football. There are endless markets you can use this method on.
For those of you who think I have taken leave of my senses by working with stakes of £2000, be assured this sum is never really at risk – particularly in highly liquid markets where price movements can be painfully slow.
Having said that, never attempt this approach with any sum that makes you nervous, and stick to high profile sporting events. Premier league football matches fit the bill nicely.
So that about wraps it up for Pillar 4.
We shall look next at Psychological Trading in Pillar 5.