On the exchanges
Peter Webb picks up where he left off last month and looks at
even more ways of locking in a profit from betting exchanges
It don t mean a
thing if you ain t
got that swing!
ast month we looked at around the market and com- should expect to see lots of
how important it is to ing for or against a selection small gains and the odd larger
put a basic framework and your objective is to nip in loss but the total of gains
L and out of the market quickly should significantly outweigh
around your trading.
and make a little amount of your losses.
We showed an example where
money, doing so at the least
we pulled Ł45 out of thin air by
 Scalping is typically trading
using a small stake and turn- risk possible.
for individually small gains
ing it repeatedly through the Scalping, as with any other by looking to profit from
market. gambling strategy, does carry
small price movements in the
risk; the upside though, is it
market.
This month we look at anoth-
that doesn t require that much
er way to achieve the similar Swing trading however,
thought because your focus
thing but with bigger results looks at much broader price
is on very small price move-
and using a different style. movements. While scalpers
ments.
are terrified of very large price
Last month we were
Form or knowledge of the
movements because of the
 Scalping .
market shouldn t greatly influ- potential for loss that they
 Scalping is the name
ence you. When you scalp,
could bring, swing traders
given to the process of trading
you are not looking to make
love volatile markets and large
money through a market for
a judgement on the broader
price movements.
small gains per turn.
direction of the odds, which
These traders are not picking
Scalping typically involves
horse is being favoured or lack
up pennies in front of steam-
establishing and liquidating
rollers they
a position in the market very
 It s just like picking
have usu-
quickly on very short times-
ally decided
cales.
up pennies in front which steam
Your time in the market is
roller is going
usually measured in seconds
where, and
of a steam-roller
and your profit is generally
try to choose
small on each turn.
one to hitch
While the individual profits
favouritism, but you will make
a ride on.
ment the entry and exit at the
are small you can still reach
enough of a judgement to
The problem is, choosing the
end of a trade requires more
large profits overall by  recy- ensure you can get in and out
steam roller! The approach of
thought.
cling your money through the without it moving significantly
a swing trader therefore, in
In short, you need a reason
market many times over ef- against you.
terms of setting up a posi-
to enter and exit a swing trade.
fectively multiplying the small
Getting the smallest risk
tion, is more in-depth than a
amounts to much larger ones. Let s look at a swing trade.
possible is clearly your biggest
scalper.
In the first illustration you
The best, non technical, objective when scalping, if you
They need to identify why a
can see we have already at-
definition I have found for lose sight of that objective that
movement of odds will occur
scalping is:  Picking up pen- steam roller heading toward tempted to catch a decent
and over what time. Entry
you may crush you! price move on Royal Dignitary
nies from in front of a steam
and exit points are much more
roller! at Musselburgh, we failed.
Profits are always limited
subjective to a swing trader
We were expecting a drift in
This definition clearly cap- but your downside potential
and while they will always try
isn t if you maintain discipline.
tures your objective when you the price of this selection so
to get in at an optimal mo-
With effective scalping, you
are scalping. Money is rushing we laid at 1.79. When nothing
50
occurrence if you are trying It s also well known that big
to get a nice move in either
gambles occur frequently on
direction.
certain types of races and if
Not put off by these early
you watch for a big gamble
set backs we lay again at 1.77,
or know where it is likely to
soon after the price does in-
occur you can benefit from the
deed start to drift a little and
money that is going for that
go forward a couple of minutes
horse.
later and you can see that the
Both scalping and swing
price has drifted much further
trading are effective but it s
from our entry point of 1.77,
important to note the differ-
out to nearly evens.
ences between scalping and
Illustration one
As we are just before the
swing trading.
start of the race at this point
When swing trading your set
we need to close out our
up can be more or less similar
position. You can see that the
to scalping but your approach
trade calculator shows us that
to risk and losses is completely
we have earned Ł130 for our
different.
efforts. Not bad for a couple of
minutes work!
Your objective should be to
Of course not all swing get out with the lowest mon-
trades end up the same, but as
etary loss as possible if your
long as you manage your posi- set up does not work.
tion when it looks like it is not
This is because it is likely
going your way you only need
that even if you call the market
a few decent winning trades to
correctly it may take more
be on the right side of things.
than one attempt to catch that
Swing trading without expos-
all important large move. Even
ing yourself to adverse risk is
then it s quite possible that
really only applicable on the
you could still miss an oppor-
horse racing market.
tunity quite often.
This is because you can trade
You must accept that you will
in and out of positions with no
face a lot of small losses when
risk on the underlying event,
swing trading in order to catch
as it wouldn t have started yet.
the big moves. Swing trad-
It works well on horse racing
ers actually face the opposing
because there is a lot of price
situation to a scalper from a
volatility before a race starts.
money management perspec-
You can swing trade in other
tive.
sports markets as well, but
Illustration two
the only way to achieve this is Scalpers make small amounts
to be active and in the market and turn there money through
while it is in-play.
the market quickly but oc-
If the market is in-play it can casionally lose larger amounts.
move against you and you will
Swing traders though, typically
have to take risk on the under- lose small amounts often but
lying event. While it s possible
make very large, less frequent
to be successful at this, it is a
little, as this wasn t what we gains, in return.
happened we  scratched our
much tougher ride.
expected we immediately set- Scalping and swing trading
position by backing it at the
Swing trading on horse rac-
are two very different disci-
tled for a Ł30 loss.
same price for no gain.
ing is where form students
plines, if you can master both
Two attempts and two
On our second attempt we
can benefit from their betting
then you will doing very well
failures isn t a great start, but
laid at 1.77 but instead of
knowledge in combination
but typically most people pre-
drifting the price came in a this is actually quite a common with a trading strategy. If a
fer one style or another, either
horse looks fractious, recalci-
from a psychological or risk
trant or there is a change in
Bet Angel is the premier trading management perspective.
the going, it s likely to affect
People who have no opin-
the odds of a horse.
software for Betfair. For more details,
ion tend to scalp, those with
Form students are likely to
click the Bet Angel link at Racing an opinion can swing trade.
be able work out how this will
Whichever you use both are
affect the odds for a particular
Ahead website www.racingahead.net
very viable strategies.
selection.
Racing Ahead 51