Scalping on Betfair is the most common way for beginner traders to get their feet wet when trading the pre-race horse markets.
Finding a simple scalping system/technique can be tricky because there are a lot of indicators in a market which determines when you should enter, why you enter a trade and when you exit a trade.
You may have a market which has a very low amount of matched bets, in which case it is likely to be erratic and not suitable for scalping at all.
On the other hand, if you are too cautious, you may miss an opportunity to scalp out multiple profitable trades.
So how do you know which scalping technique is worth learning?
Let’s delve into this right away…
WHAT IS SCALPING?
Horse trading has been a way for betting enthusiasts worldwide to make big-time profits. The hardest thing about horse trading races is having to predict which direction a horse’s odds will move.
The majority of strategies are going to require a trader that is willing to take the time, and effort into learning as much as possible about the trading software, market indicators, race courses, trainers, horses, and jockeys.
Scalping can be best described as when you profit from small price movements in a market between two price points, such as 2.0 and 2.1.
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Factors To Consider
When it comes to scalping a horse market, there are a variety of factors to consider.
Generally speaking, scalping horse race markets right before the race starts (in the last 10 minutes) is an easy way to start making small profits off of a small move. This is due to the increased volume of matched bets which solidifies the market and makes it more stable.
The great thing about this strategy, and the large reason why it is so appealing to beginners, is that you don’t necessarily have to understand the market perfectly in order to make a profit. It’s without a doubt the most simplistic strategy, as essentially you are just offering bets into an active market, and waiting for an opportunistic match, at which point you then look to sell the bet back to the market by placing an opposing lay or back bet..
This way you are limiting your risk and exposure to the market, improving your overall chances of making some serious profit over time.
One of the problems that people tend to face with scalping is that you could get a 1 tick profit, and then suddenly the market fights against you, and all of the sudden you have a 20 tick loss.
This could potentially mean that you are going to have to do 20 positive trades in a row without fail, just to be able to recover your loss. And so even though it is a very popular model, and (if used correctly) can most certainly reap great rewards, there are still a good, and bad way to go about doing it.
SCALPING AROUND RESISTANCE POINTS
One of the most essential parts of horse trading you must learn to understand is how to find levels of support, and resistance. When it comes to how using these tactics can improve your general profits, it is paramount that you first understand the difference between the two.
Support and resistance is a stock market concept which gained serious traction in the 1800’s, and early 1900’s. It illustrates the idea that a support level is a price level in which buyers are more aggressive than sellers.
It is this level of aggressiveness that then pushes the price up, away from the increased demand, and so in a sense there is an imbalance in supply/demand (with more demand than supply), so the price has to go up to meet the demand.
Resistance on the other hand, is when traders analyze which price levels are repeatedly defended by buyers, or rejected by sellers.
While it is one of the simpler ways to learn how to profit off horse trading, it can become complicated at times trying to differentiate between random price levels, and actual support and resistance levels.
They are primarily useful for deciding on the direction of the trade, for example if betting odds are approaching the support level the trader should look to lay the bet, however if they may want to back the selection if the resistance level approaches.
Essentially, support is in favor of a price shift, resistance is working against it.
The Human Element
The majority of betting exchange that takes place is performed by a small portion of people, in fact it is believed, according to Caan Berry, that 70% of the money matched on the exchange is done by traders. So, in a way, all of this excess money floating around can’t be of too much value, and so there must be a plethora of over-reactions, under-reactions, ego, emotion, and indecision playing a significant role.
The fact that there is more money than value means there will likely be extreme reactions, and it is these points of indecision in the market that we call “breaking points”.
Pressure builds in the market (as support battles resistance), when one side of the equation is overwhelmed, the price then shifts.
With that being said, there’s less resistance if the market has traded there previously, and sometimes the market can naturally form additional resistance.
By taking the time with the information, this strategy can really help you get a deeper understanding of not just the market, but also how market psychology works.
Predicting support can be one of the more difficult things when it comes to scalping, however resistance points are far more noticeable, and generally appear very often.
In most cases, they’re a completely made up notion, created entirely by human perception, greed and fear of what could possibly happen, and so being on the wrong side of a resistance point can become painful pretty quickly.
However, being on the right side can substantially enhance profit, in fact some of the most reliable resistances are found when the price increments change, such as: 2.0, 3.0, 4.0, 6.0, 10.0 & 20.0. Generally speaking, the 4.0, 6.0 and 10.0 crossovers present stronger support and resistance than anywhere else.
An important note about this technique is that technical traders identify both the resistance and support levels so that they can time their back bets and lay bets in order to capitalize on any breakouts, or trend changes. In addition to identifying these important points in the bet, resistance can also be used as a risk management tool.
At the end of the day, support and resistance are complementary to each other, as resistance establishes the current price ceiling, and support forms the floor. When the price action breaches either support or resistance, this is considered to be a prime trading opportunity where you can find value bets.
TWO SIMPLE SCALPING TECHNIQUES
It’s always refreshing when you are presented with another option when it comes to trading horses, and learning the variety of different scalping techniques can prove to be extremely rewarding for any trader.
There are a variety of techniques professional traders use, some of which carry more complexities than others.
Regardless of the direction you choose to go, it is essential that you commit to it, and put in the adequate amount of time to learn all the ins and outs.
We have researched, and laid out some other popular Betfair scalping strategies/techniques below.
Don't forget to also read Betfair's offical sacalping guide as well.
No.1 - Range Scalp Trading
With range scalp trading you are not entering the market to follow a range. You are anticipating the market moving towards the end of a range and have a bet waiting to be filled that that price point.
If the range in a market is between 4.5 and 6.5, with no bets being matched outside this range.
You can then place a bet at 4.5 or 6.5 and wait for it to be matched, if the market moves in that direction. If the bet is matched then you are ahead of the queue and you can scalp out a quick tick profit.
This strategy requires patience but it works really well.
During one single race, the traded price often goes up and down multiple times within one single traded range making is easy to scalp out profits on both sides of the short term traded range.
As with any method, you have to look out for other indicators to justify your entry into the market.
If you have been waiting for your position to fill, but a massive stake is matched right before your price point, pushing the price fast down to your waiting bet, you should consider the possibility of a new trend forming.
The price may shoot past your position and force you to take a big loss.
No. 2 - Trend Scalp Trading
Trend scalp trading is implemented in the same way as range scalp trading, the only difference being you don’t take into account the current trade range.
With this technique you would place your trades far outside the current price point and wait for a new trend to form, ignoring the current range traded.
Ideally you want a sudden shift in the market direction, either a drift or a steam, as this would capitalize on this strategy.
The big advantage of both these techniques is that you are waiting for the price to come to you, which gives you more time to watch the market for other indicators, or warning signs.
It gives you time to emotionally prepare for your bets being matched.
If the price is trading around 6.5, you could place your bets between 7 and 10 ticks outside of that position and wait.
You are waiting for a sudden price move, or a large matched bet which swallows up many price points in one. Often bookmakers will dump large liabilities in a market and cause temporary price movements.
When this new trend starts, and the price moves far beyond any precious traded range, you capitalize.
This is because the chances are your bet will be matched at, let’s say 7.2, and then immediately scalped out at 7 while the market fluctuates up and down.
The key here is that your bet is “ahead of the queue” which means your bet will be filled very fast and matched again on the lay side again at 7, ensuring your scalping profit.
Knowing when to exit trades
How many times in a trade have you asked yourself “Should I get out of this trade? Or “Did the trend shift?”.
When it comes to knowing when to exit a trade, it can certainly be difficult as many traders struggle either exiting too late, taking profits too soon or letting big unrealized profits dissipate.
In order to gain an understanding of when to get out of a trade, you have to take the time to truly comprehend how markets trend.
If you are able to understand technical analysis, you can understand why market move around at the rate they do. Many inexperienced traders see price action as random, and will back a horse at major resistance, which can result in a massive loss.
Understanding the support and resistance points play a huge role even when it comes to deciding when to exit a trade. In general, you want to have a solid reason to enter a trade and when those indicators disappear, you have to exit. No excuses.
Trading emotionally will always end in a losing position. The longer a trade remains open, especially when you are scalping and waiting for a bet to be matched, the more vulnerable you are because the reason you entered the trade may no longer be relevant.
For you to develop the ultimate horse race scalping technique, and become a full time trader on Betfair, you have to be willing to practice and give 100s of hours of trading time to learn the subtle nuances of a market. Scalping in Betfair is serious business and can make you a lot of profit, so it is worth the time and effort to learn to read the markets.
I have also written a more complete and in-depth guide to Scalping Horse Racing that you can check out now.