New blog post by Ryan Carruthers! Horse Racing Trading - The Ultimate Trading Start Guide
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Have you ever had a dream that you could trade on horses full time and make your living from it?
Have you just started using the Betfair Exchange and want to learn how to make money from the horse trading markets?
Do you dream of working from home, being your own boss and working whenever you want to?
If you answered yes to any of those questions then this is the start guide for you!
Horse racing is one of the most popular sports to trade on Betfair. One of the reasons is that there are so many races each day that there will nearly always be daily opportunities to trade.
What time of the day is it on?
Horse racing in the UK is mainly on from 1pm onwards pretty much every day of the year. A lot of horse traders like to do their research in the morning before the racing. This means that they will often start work early and finish early or work between 9am-5pm like a regular job.
In the summer there is evening racing so if you want to trade outside of your usual job this can be a great time to learn. Races go on up until 10pm in the UK.
There is also Australian, South African and American racing on Betfair, the markets are not liquid all the time but there is some decent money in them close to the off. So they can be another option, although unless you live in those countries, it may be best to stick to the UK stuff while learning.
How much time do I need to spend trading on Betfair?
Horse traders will usually spend 4-8 hours a day working. This can vary depending on the quality of the meetings that day. Monday and Tuesday can be a quieter day for good quality horse racing so many professional horse traders take those days off.
When are the big events on?
Horse racing is an all year round sport, which means we can trade it practically every day. However, there are some major events scheduled each year that are worth keeping tabs on. You have probably heard of Cheltenham and the Grand National even if you have never followed horse racing.
British horse racing lists the top events them here: https://www.britishhorseracing.com/racing/major-events/
There are two main types of horse races, those raced on flat ground and those that include hurdles/jumps (called National Hunt).
The flat season starts in late April/early May and ends in late October.
The National Hunt jumps season starts in October and ends in late April.
However, there will be jumps and flat meetings on the same day throughout the year, there are just a lot more of the specific type of race during the times above.
What are the key rules to be aware of?
Horse racing is fairly simple in terms of results, like any race the quickest horse to get to the finish line (or post as it is referred to in horse racing) is the winner.
The place market is similar in that if three horses will win in the place market then the first three horses to reach the finishing post will win in that market.
When two horses finish at the same time and they are both declared the winners it is called a ‘Dead heat’. The Betfair Exchange rules on this are:
‘A Dead Heat is calculated by dividing the stake proportionally between the number of winners in the event. So, in a two-way Dead Heat (2 winners) for example, your return will be half of what it could have been. This can be referred to as half-face value of the bet, or a bet for half the original stake.’
You can read more in detail about the rules of the sport on Betfair here: https://www.betfair.com/aboutUs/Sportsbook.Rules.And.Regulations/#Horseracing
Key Terminology:
It is really important to know what the key words in a sport mean and I think horse racing is the kind of sport where this is even more vital than usual. Here is a great link to all of the crucial terminology that will help you with your horse racing trading.
https://www.racingpost.com/guide-to-racing/horse-racing-terms/
What are the most popular trading markets for horse racing?
The two main markets for horse racing trading are the ‘win market’ and the ‘place market’. Horse racing traders rarely have the need to trade any other markets and as such these are the two markets all new traders should focus on.
Win Market - The win market is simply the market for betting or trading on who you think will win, conversely you can of course bet against who you think will win (laying the horse to win). The majority of the money put into a race will be on this market, therefore a trader has little problem getting their trades matched even if trading serious volumes of money. The market tends to ‘liven up’ around 10 minutes before the off, so often this will be the time people who ‘scalp’ the markets and trade small movements in price will get involved.
Place Market - A good option if you want the insurance of having more of a chance to win a bet, the place market is another very popular market in horse racing, for this reason. Remember that there is more than one winner in this market and so the market overround will not be anywhere near 100%. You can often have 3 odds on favourites in this market as a result.
What are the popular styles of trading for horse racing market on the Betfair Exchange?
There are a few various styles of trading the horses, I am going to talk here about the three most popular and worthwhile ones, scalping, automated trading and swing trading. I will also discuss the advantages and disadvantages of each trading style.
Scalping:
Scalping is the simple idea of placing a trade with a view to trade out as soon as there is a small bit of movement in the market. So for example, I might back Kauto Star to win the Gold Cup at odds of 2.0 a few minutes before the off. Within a minute the odds come into 1.95 so I hedge and ‘green up’ (cash out for a profit). This is done pre-race in general so as not to incur the huge risk of taking it in play, where the odds can move all over the place, in a matter of seconds.
Advantages -
Your money is not in the market for long, so there is a low risk of a big price move against you.
You can use a higher bankroll percentage per trade as you know you are never really risking much of that stake.
You can watch and learn the markets while doing this with very small stakes to see if it suits you.
Disadvantages -
You will not likely ever get a big price move in your favour, rather setting for small gains per trade.
Sometimes prices can move in these small amounts due to one trader lumping a big bet into the market, this can hit your stop loss (a predetermined exit point if the price moves in the wrong direction) very quickly.
2. Automated Trading:
Automated trading is simply trading using software that automatically places trades for you. This eliminates the human error factor and also any emotion that a person may have during a trade as the trading is set up before the event and carried out without you having to enact it. This form of trading is becoming increasingly popular due to the time and emotional advantages it can provide.
Advantages -
As already mentioned this style of trading can save you a lot of time not having to be sat in front of your screen the whole time during an event.
Your emotional state will not negatively impact your trading as it is automatic.
Human error during a trade will no longer be possible as you are not physically entering and exiting the trades yourself.
Disadvantages -
There is a heavy reliance on your software and ‘bots’ to place the trades correctly.
Trades need to be programmed to trigger which does take some time initially.
You will need to buy trading software and maybe also a trading ‘bot’ to place the trades.
If you are a member learn more about trading bots on our exclusive members forum: http://forum.betfairtradingcommunity.com/topic/458/bf-bot-manager
3. Swing Trading:
Swing trading is simply looking for bigger price movements and taking advantage of these market swings to make money. So for example, I might see that a horse is being backed and decide to follow the market move. I back it myself at 10.0 as the morning moves on the horse comes into 6.0, I green up for a sizeable profit.
Advantages -
You can use smaller stakes to make a bigger profit per trade.
If you strongly believe the price is wrong, you can take it and let it ride longer again leading to a good profit if you are correct.
You can take a bit longer with your trades and not have to rush in and out of the market as quickly.
Disadvantages -
If the market goes heavily against you, you will make a bigger stake loss.
Unless you have a set plan it can be difficult to know when to trade out.
You will need a very strong mentality to let your money be at risk for a longer period of time.
Set and forget:
As a conclusion to this section on styles of trading I will briefly mention ‘set and forget’. This is simply backing or laying a selection and letting it run. Essentially, this is the same as old fashioned betting, when people would place a bet and not be able to cash out. This can be useful on horse racing systems, where trading in or out in play is risky due to the fast nature of the sport.
What do I need in order to start to trade the horses then?
We recommend a few things:
A diary or online notepad to make your daily plan - this is essential for research work and planning your trades for the day ahead.
Trading software like - https://racingtraders.co.uk/ This will enable you to get in and out of your trades efficiently and quickly. There are lots of these softwares out there so try a few and see which you like.
A laptop or PC with at least 2 screens - it makes a world of difference being able to view more on two screens and work with them both. You can often purchase second screens for a laptop or PC cheap from ebay for around £20 locally.
A social network of traders - https://betfairtradingcommunity.com/en - It can be lonely to do this alone and working together to make money like we do is an advantage in this game.
To be willing to learn, it does take time to master but remember the journey is so worth it in the end.
We interviewed one of our most successful horse traders John and he told us how he prepares to trade the horses each day. This is well worth a read: https://betfairtradingcommunity.com/en/blog/preparing-trade-part-1-horse-racing-john-folan
What popular strategies can I use to get started?
OK so hopefully you feel ready to give trading the horses a go now. As with anything that you are learning we advise baby steps. Practice trading without money or very low stakes to start with and test how you would get on. I will leave you with some links to strategies we have had success with and tested thoroughly.
We have a great two part guide on pre-race trading here:
https://betfairtradingcommunity.com/en/blog/pre-race-trading and
https://betfairtradingcommunity.com/en/blog/pre-race-trading-part-ii
We have a free back to lay strategy video here: https://betfairtradingcommunity.com/en/blog/live-back-lay-and-selection-process-part-1
For members we have other great strategies here: https://betfairtradingcommunity.com/en/trading-strategies
Again, for members we have the forum which is full of great horse racing discussion: http://forum.betfairtradingcommunity.com/category/5/horse-racing
