Can you make a full-time income from trading the sports markets? Of course, you can! That is a very clear and realistic goal.
The problem is that the average person is not cut out for it because they fail to plan and take the process seriously.
In this post, I will discuss what factors you need to consider before becoming a full-time trader in the UK using the betting exchanges such as Betfair, Matchbook and Betdaq.
Many beginner traders think you can deposit a bankroll on Betfair, do a bit of scalping for 30 minutes every day and walk away with a nice tax-free income, but that is not the case.
There is a great deal more to consider, such as time vs rewards, the Betfair premium charges and a few practical aspects of life, such as mortgages and sacrificing your social life.
This applies to all sporting events, such as horse racing, football and even the less popular handball and table tennis.
Let’s dive into these topics so you can answer the question, “Can I become a full-time trader on Betfair?”
If you want to join the UK's No.1 Betfair Horse Trading Course, click here to learn more and secure bonuses.
Exchanging Time For Money
When considering making a living by trading full-time, it's vital to comprehend that it is not just an investment of money but also a significant investment of your time.
In a nutshell, you have to sit on your computer all day long!
Unlike traditional 9-to-5 jobs, scalping and swing trades are not limited to a fixed schedule. It aligns with the pace of the markets and follows the rhythm of the sporting events you choose to trade.
The number of hours needed for successful scalping can vary greatly, but most successful traders spend at least six to eight hours a day in front of their computer screens.
Remember, the concept of trading revolves around capitalizing on small price changes which happen frequently but randomly throughout the day.
Being there, at your computer, to seize these opportunities when they occur is crucial.
During large sporting events or peak betting times, you may find yourself working late into the night and definitely over weekends.
It's a commitment that requires flexibility and the understanding that your "office hours" might stretch beyond traditional boundaries.
- Are you willing to give up your weekends to practise trading?
- Will your friends understand when you stay inside for the horse racing on a hot summer's day while they go to the park to have a BBQ?
Moreover, it's important to keep in mind that the profits on any given day might be small.
Sports trading is a strategy built on making many trades to accumulate profits over time, not getting rich from a single bet.
There will be days where despite your best efforts and time investment, the returns might seem insignificant.
However, when viewed as part of a broader strategy, these smaller profits add up over time, contributing to your overall earnings.
The essence is consistency.
Just as the stock market favours regular investments over time, sports trading favours those who stick with it, embracing both the days of small gains and the days of more significant wins.
In the long run, consistent, disciplined scalping can lead to a sustainable income, but it requires patience and resilience.
Thus, the mantra "exchanging time for money" is especially apt for scalping on Betfair Exchange.
It's an approach that requires a strong commitment, both in terms of the hours spent actively trading and the patience required to see the fruits of your labour.
So, if you want to trade on Betfair full-time and spend your days scapling out easy profits, be prepared to put in the time and give up a large chunk of your social life.
Limited By Bank Roll
Remember that your trading potential is often limited by your bankroll.
Let's consider a scenario where you're trading on a horse race, looking to secure a profit by scalping the market between 8.0 and 8.2 odds. You're not just focusing on one horse, but on multiple horses, hoping to exploit minor fluctuations in their odds before the race starts.
For each horse you trade, you place a lay bet at 8.0 with a stake of £100.
This creates a liability of £700 per horse. If you are trading on four horses simultaneously, you have a temporary total liability of £2,800.
After placing your lay bets, the odds lengthen to 8.2, and you back each horse at the new odds, each time with a stake of approximately £97.56, which balances out your liability and locks in a profit of around £2.44 per horse, regardless of the race outcome.
However, while this strategy might sound appealing, the challenge lies in the temporary liability you've created.
Even though your objective is to balance it out by backing at the longer odds, there's a period where your full liability of £2,800 is at risk.
If the odds do not move in the desired direction or if there's a sudden market swing, you could potentially incur a loss.
What happens if your computer freezes or there is a power-cut at that exact moment? Have you got a backup system to trade out of a live trade to protect your bankroll?
That's why a significant bankroll and management is crucial when scalping, especially in the volatile pre-race markets. It ensures that you can cover these temporary liabilities and withstand any unexpected market movements.
Remember, your bankroll is not just a tool for placing bets, it's your buffer against the inherent risks in exchange trading.
Having a strong bankroll management strategy is key to successful and sustainable scalping on Betfair Exchange.
This is even more important when placing longer swing trades.
Let’s say you place a lay bet 48 hours before the kick-off time on a football game. This means your bankroll is tied up in the liability until your green up that position for a profit or a loss.
This is fine if you have a large bank, but hinders you if you need that money to trade in the meantime.
This also limits your potential profits as you may have to miss out on profitable trades as you cannot afford to lock away your bank roll for 48 hours in a trade.
If you want to become a full-time trader, you must be willing and able to depost at least £5,000 bank roll so you can give yourself the best chance of making bigger trades.
- A bigger bankroll means you can place larger trades.
- Larger trades means you can make larger profits.
- Larger profts per trade means you can perform fewer trades per day to make a good living.
- Fewer trades per day means lower exposure to mistakes.
Also, you need a staking percentage system to avoid overstaking while trading.
Emotional Control
Emotional control is arguably one of the most essential traits required for trading on the Betfair Exchange.
The very nature of scalping – its pace, its unpredictability, and the constant decision-making – can be a fertile breeding ground for stress and heightened emotions.
How you manage these emotions can make the difference between success and failure.
Let's consider a situation where, after meticulously monitoring the market for six hours, you've managed to secure a modest profit for the day.
However, towards the end of your trading session, you make an ill-considered bet based on an impulsive decision, perhaps driven by the desire to close the day with a larger profit.
Unfortunately, the bet does not go in your favour, and the loss wipes out your hard-earned gains for the day.
Such situations can invoke a myriad of emotions - frustration, disappointment, and even anger. It might be tempting to immediately try and "win back" the lost money, leading to further risky decisions and potentially greater losses.
This is where emotional control comes into play.
Emotional resilience is about accepting that losses are a part of the process. Bad days will happen, and they do not necessarily reflect on your overall strategy or abilities.
The critical thing is to be able to leave the losses of the previous day behind and start the next day with a fresh mindset.
In the scenario above, the key to resilience would be to assess what led to the ill-considered bet - was it fatigue after a long trading session? Or perhaps the lure of a quick win?
Understanding the triggers helps prevent similar situations in the future.
Keeping the bigger picture in mind is vital. Scalping and swing trading is a long-term strategy, not a get-rich-quick scheme.
Every day, every trade, whether a win or a loss, is a part of your journey as a sports trader. Success is measured not by individual profitable days but by the ability to maintain overall profitability over time.
Therefore, emotional control is about managing the highs and lows, learning from each day, and having the resilience to stick to your long-term strategy, irrespective of the short-term outcomes.
The ability to come back to the market with a fresh mind and the same disciplined approach, even after a tough day, is what defines successful traders.
Do you feel you can maintain a cool head and withstand significant losses?
Learning Curve & Time
Next up, you must develop a deep understanding that there's a steep learning curve involved. You cannot become a full-time trader on Betfair without putting in significant time to learn the market movements.
Each market has its unique patterns and behaviours that are influenced by a multitude of factors, including the weight of money, matched bets, and public sentiment.
Learning to interpret these patterns and anticipate market movements is key to successful scalping.
However, this is not a skill that can be acquired overnight. It requires time, patience, and a considerable amount of practice.
A beginner trader must spend hundreds of hours observing markets, backtesting strategies, and practicing trades before starting to see consistent profits.
Furthermore, there's a direct link between this learning curve and your bankroll.
Mistakes are a natural part of the learning process, but in the world of scalping, every mistake has a financial implication.
That ill-timed trade or misread indicator can lead to a loss that eats into your bankroll.
Consider this as part of your tuition fees in the school of scalping.
Every loss should be seen as a learning opportunity, a chance to refine your strategy and improve your skills. It's crucial to start with a bankroll that not only can withstand these early losses but also allows you the room to learn and grow as a trader.
Remember, patience is crucial. Rushing the process can lead to unnecessary losses.
A disciplined, methodical approach, combined with continuous learning and analysis, will help you navigate the learning curve and become a successful trader.
Difficulty Getting Mortgages
An important aspect to consider when making a living through scalping on Betfair Exchange is the impact this lifestyle might have on your ability to secure a mortgage.
Lenders tend to see gambling as a risky financial behavior.
Although scalping is a strategy based on analysis and experience rather than luck, it might still be classified as gambling by financial institutions.
According to the Online Mortgage Advisor, banks can deny mortgage applications if they see regular betting activity on bank statements, as it can indicate a riskier borrower.
Paying Premium Charges
Another significant consideration is Betfair's premium charges because this can heavily limit your earning potential. Planning your cash flow as a full-time trader becomes essential when adding the potential for another running cost, such as the premium charge.
While Betfair Exchange is a platform that has enabled many to profit, it's important to note that successful, high-earning traders can be subject to these charges.
According to Betfair's terms and conditions, if your account is in profit, and a part of this profit comes from bet winnings, then you could be liable for premium charges.
The charges are designed to affect only a small number of the most successful bettors and start at a rate of 20%, potentially rising up to 60% depending on the number of bets placed, the duration of your account, and the overall profit.
They are only levied on accounts that are in profit and meet certain criteria. The specifics of the Premium Charges are complex and they are updated from time to time.
- 20% Premium Charge - This is the starting level of the Premium Charges. It applies if, over the lifetime of your account, your account is in profit, your total charges generated are less than 20% of gross profits, and you have bet in at least 250 markets. This charge is applied to the difference between 20% of the previous week's gross profits and the total charges generated during the week.
- 30% to 60% Premium Charge - For the most successful and active customers, the Premium Charge can rise. Betfair applies a sliding scale based on the number of bets you have placed. It starts at 40% for those who have bet in 1,000 markets, 50% for those who have bet in 5,000 markets, and up to 60% for those who have bet in 10,000 markets.
- Premium Charge Discounts - If you have incurred the Premium Charge in three or fewer weeks out of the previous 20, then you are entitled to a discount. The discount ranges from 10% to 50% off the standard rate and depends on the number of weeks you were charged.
It's important to note that the vast majority of customers on the Betfair Exchange are not subject to Premium Charges.
According to Betfair, less than 0.5% of customers are affected by these charges. It's also worth remembering that the specifics of the Premium Charges could change, and Betfair's terms and conditions should always be consulted for the most up-to-date information.
Please note that the specifics of the Betfair Premium Charges and their application can be complex and nuanced. Always refer to the latest official guidelines or consult a professional advisor to fully understand the implications for your specific situation.
Conclusion: Can You Become A Full-Time Trader?
Yes, you can easily quit your regular job and become a full-time trader on exchanges like Betfair, but it requires a unique blend of skills, patience, and financial planning.
The journey involves a serious investment of time and effort, learning to interpret market dynamics and managing your bankroll efficiently. Emotional control plays a pivotal role, helping traders recover from losses and stick to their long-term strategy.
If you want to join the UK's No.1 Betfair Horse Trading Course, click here to learn more and secure bonuses.
Practical challenges, such as securing a mortgage as a professional trader and understanding Betfair's premium charges, need to be carefully considered as they could impact your financial security.
Remember, successful trading is not merely about understanding the market; it's equally about understanding and managing yourself.
Scalping is the easiest way to get started, so I recommend you continue your learning process by reading this post about what scalping is on Betfair.
