Tactics Are More Important Than Strategy When Trading On Betfair
Randomness is a massive part of Betfair market price action.
The JuiceStorm team built TradeHost for profitable automated trading and betting on Betfair in the UK, IE, AU and US horse racing markets. TradeHost Lite started in 2013 and is free forever.
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One of the greatest books on trading contains no practical advice about the markets whatsoever but still describes price action very well. The Drunkard’s Walk by Leonard Mlodinow details how nearly all aspects of life are ruled by randomness.
Randomness is a massive part of Betfair market price action. It’s one of the principal reasons that almost every backtest fails under real market conditions. Didn’t know you could backtest a trading strategy with Betfair data, huh? I’ll let you in on that one next week.
I consider tactics to be much more important than strategy when it comes to making money trading the Betfair market.
My favourite tactic is where I will enter a trade at one level and if it goes against me I will add to the position allowing me to exit the trade at the original entry rather than the original take profit.
I know. I know. The horror! I am breaking one of the sacrosanct rules of people who never-actually-trade-betfair-with-real-money-but-like-to-peddle-trite-theories-of-risk-and-reward. Yes, I am increasing my risk and limiting my reward. Yes, such tactics require a much higher win percentage to be profitable. And yes, they can lead to disaster if you don’t properly balance the ratios. But instead of having a religious argument about risk and reward just do the following.
Set up BfBotManager in simulation mode. Write a strategy to place 50 random trading trades with 5 pip stop and 10 pip take profit and then place another 50 trades with 10 pip stop and 10 pip profit, then another 50 trades with 20 pip stop and 10 pip profit. You’ll notice something interesting – the win/loss ratios are not proportional. At 5TP/10 stop, you could lose 90% of the time but at 20st/10tp you may win 55% maybe even 60% of the time. You will still lose, but much less and it will take much longer than through the “traditional” way of trading.
Why? Because of something called path dependence. In the la-la world of trading gurus where trend spotting is easy (once it’s already happened) and price moves linearly from point A to point B, using 2-1 risk reward ratios is…obvious! But in the real world where every Betfair price tick is subject to random variables the path is never smooth nor linear. Add to that the fact that the market, like a skilled poker player, is almost always trying to trick you into the wrong move and your accuracy at any given price is actually more like 25% for to 75% against versus the 50%/50% that is commonly assumed.
That’s why single entry tactics are the height of arrogance, especially in Betfair trading where the stops are small and the margin for error is tiny. Random trading as a Betfair trading tactic is designed for maximum success in a real market environment.
In 2021 TradeHost traded 7,937 Betfair UK, IE, US & AU horse racing and greyhound markets.
2022 saw TradeHost become even more profitable with 22,698 Betfair markets traded.
2023 less markets were traded – 17,459 – but a with a similar profit to 2022.
All trades and bets were streamed live on JuiceStorm TV which was was watched by 124,209 traders in 2022.
All results for the 48,094 Betfair markets traded are here and the charts are here.
Top 100 Comments on JuiceStorm.com
Successful Betfair Traders have the simplest Betfair Trading systems. The difference is their selection process, experience and execution level. Get that difference for yourself with automated trading by TradeHost.
U smashed it today guys. Well done. U advised Aramis Grey 19:00 at 7. BSP 5.7. TA