What’s meant by scalping?
Anyone who scalps on Betfair or any other betting exchange can basically be considered indulging in short-term trading. The basic intent of such a person is to look for slight market movements in favourable directions, normally laying and backing between lay and back prices in highly liquid markets on the betting exchanges. As soon as this person witnesses a price movement in a certain favourable direction, he immediately makes a trade, and locks in his profit, no matter how big or small it may be.
How is scalping done?
Let’s go through a basic example of scalping by looking at an upcoming English Premier League match between Swansea and West Brom. We’ll be scalping an under/over 2.5 goals market in this example.
Going by experience, one can expect the over 2.5 goals market to witness a certain downward pressure, with the kick-off time approaching fast. It is this type of knowledge and experience that separates scalpers and traders from the novice sports bettors. You’ll often see that scalpers don’t have much knowledge about the events they actively trade on. However, what they have firm understanding of is the market operations, how markets may move under certain circumstances, what causes such fluctuations and more, regardless of the underlying events.
The essence of scalping lies in trading out of or in positions (or initial bets) as soon as there’s a sudden drop in betting odds, regardless of the result. It’s all about surfing and analysing price movements, slicing every profit that comes your way, no matter how big or small it may be. Doing this continuously with every opportunity results in high profitability for the betting exchange traders.
Things scalpers must keep in mind
The chances of odds moving against you is one of the obvious and most frequently encountered dangers of scalping. It is bound to happen. In fact, if you look closely, trading on betting exchanges is just another form of betting. Your primary aim is to register more winning trades compared to your losers. Skilled scalpers are known to generate some very substantial and impressive profits, with some technical assistance and a slight bit of experience under their belt.
Exit strategy is another extremely important consideration that must be paid heed to by every scalper. You can never undermine the importance of risk management when you’re scalping or betting exchanges like Betfair, Matchbook, Betdaq etc. As the gains are not very large, making one losing trade can possibly undermine all your efforts and put a major dent into your P&L statement. You should be prepared to pull out of your positions whenever the markets move in an unfavourable direction, and exit while it may cause only a slight loss to you, instead of hanging on and hoping for some miracle. Furthermore, it’s important to remember that gambling and trading can never go hand-in-hand. Please note, when you’re scalping, you’re essentially trading. And just like any type of betting activity, trading also requires discipline.
ABOUT SWING TRADING
What’s meant by swing trading?
This type of trading is almost the same as scalping, barring the fact that when you’re swing trading in a betting market, you’re essentially seeking big price movements. While scalping needs a good hang of the swift and low risk short-term trades, swing trading is mostly about anticipating big price movements. Of course, this is far easier said than done, and hence features a much bigger risk element.
How to go about swing trading?
You can approach swing trading in a number of distinct ways, however, no matter which path you choose for implementing this strategy, you must understand the reasons behind sudden market movements and why certain events can cause significant shifts in markets, in a particular direction.
So what causes do you think may lead to sudden market movements? One of these causes can be fresh information. For instance, if we talk of an upcoming football match and star striker of the favoured team who’s been nursing a certain injury, but is still expected to feature in the final lineup, a seasoned swing trader will carry out ample research and may possibly bet on this player missing the upcoming match. And he is most likely to be right in his prediction. Now, when the news becomes official and this player indeed misses the upcoming match, the opposite odds will get significantly shortened, and this swing trader can easily trade out of his initial back bet.
Please also note that any sudden changes in the event’s settings may also have significant impact on the prices. For instance, it’s a perfect day for some football as the sun is shining bright down at the Old Trafford stadium; then there’s a sudden heavy downpour 20 minutes ahead of the kick-off. A seasoned swing trader may move instantly and go aggressive on the under-2.5 goals market, much before anyone else does any calculations and figures out how this downpour may influence the match result. Once everyone has done their due diligence, and market has been significantly shortened, expecting a low-scoring affair, this swing trader will find himself in a position to easily trade out and book a major profit.
Anyone who wishes to be a successful swing trader on any betting exchange, including Betfair, must first understand and master all such causes that can have a major impact on prices, on certain betting markets. Secondly, he should be quick enough to make that information count, before the rest of the market comes into action.