Considering a career as a professional Betfair trader? Expect to encounter numerous challenges on your journey. Consistently profiting from Betfair can be demanding, so it’s essential to anticipate and be ready to overcome various obstacles.
Below are the top 10 challenges encountered by Betfair traders.
Article Contents
1. Tough Competition
Betfair traders operate in an intensely competitive market, where success for one often means defeat for another. This zero-sum dynamic propels traders to constantly assess their rivals in pursuit of an edge.
I’ve developed strategies that profited over thousands of bets, and then suddenly stopped working. Did the opportunities vanish naturally? Possibly. Yet, I’m convinced that some of my methods were uncovered by competitors, as illustrated in this example.
As a trader you have to stay alert, mix up your bet sizes and the times you bet whenever possible. Staying rigid is also a good thing — but don’t let that be your downfall.
2. Market Efficiency
I often discuss market efficiency on this site. It’s crucial to understand just how accurate the odds on the betting exchange are, on average.
If you were to place a series of random equal-stake bets right now, chances are you’d break even or only lose a small percentage over a large number of bets. It’s intriguing how accurate we humans, the betting exchange members, can be at setting prices.
The exchange is remarkably accurate and therefore difficult to beat. So you need to test your theory/strategy over a large sample of bets. You have to find a way to outsmart the crowd. And if you can’t successfully do that, then you have to approach your trading with methods like Scalping, where you only need a slight movement in the odds to secure a profit.
For further evidence of market efficiency on Betfair, check out my analysis of 270 Premier League bets placed on the exchange. I achieved a break-even result with a 0.00% ROI.
3. “Unbeatable” Spreads
Getting value from the exchange can be challenging.
I’ve studied into the spreads on Betfair—the difference between Back and Lay odds. On average, I’ve noticed that the ‘fair’ price typically falls somewhere between these two. In my experience, it tends to lean slightly closer to the Back odds than the Lay odds. This suggests that value (Back) odds are closer to the Lay price, positioned at the top of the spread.
Many Betfair traders review their betting results and realise that their ‘Back’ bets have incurred losses. The instinctive response is to think that “Laying those same bets would have yielded a profit.” While this sounds logical, the reasoning is oversimplified due to the spreads. Let me explain.
The Lay price is significantly higher than the Back price. Therefore when you take the face-value Lay price you’re giving away more liability than you would if you Layed at a lower price, somewhere in-between the spread (ideally as close to the Back odds as possible).
Unfortunately, you won’t always get matched at those odds, particularly at higher odds where demand/activity is lower. As a result you have to raise your Lay liability to a price that’s more attractive, and therefore less value to you. In turn, it means that you might only secure a bet that’s fair value.
The same principle applies in reverse—if you attempt to Back at the top of the spread to maximise value. Often, you’ll struggle to obtain your desired odds and will need to settle for a much lower price.
This highlights one of the significant challenges of Betfair trading. To find value and turn a profit, you must master odds execution.
4. Fast Bots
The betting exchange hosts a variety of Bots, each with their own strategy.
Market Making Bots initiate the market by setting desired prices, aiming to attract interest and enhance liquidity.
Other Bots trigger chain reactions in the market, causing significant price shifts. Some manipulate the weight of money intentionally, prompting price movements, while others react blindly, further pushing prices in the same direction.
Scalping Bots swiftly adjust Back and Lay odds, outmanoeuvring competitors before punters can react.
Additionally, others Bots swiftly move within spreads to secure better prices, mimicking human traders but with greater speed.
Navigating through numerous Bots poses a challenge. Traders must stay vigilant, distinguishing between genuine market movements and false signals. Many automated programs aim to provoke reactions from other traders, both human and automated, to exploit them.
5. Scaling Up
Starting with minimum £2 stakes is an effective way to test strategies and validate concepts. However, when it’s time to scale up, Betfair traders encounter challenges.
Initially while scaling up, you may find that not all of your stakes are fully matched. “Bad” bets, where prices move against you, are often entirely matched, while desired odds remain partially or entirely unmatched.
Moreover, larger stakes can disrupt market dynamics — such as the weight of money — triggering unforeseen responses. Bots and traders react to volumes, so switching from £2 to, for example, £200 stakes necessitates caution.
So how can you operate discreetly in a transparent marketplace?
One approach is to instantly match current odds and exit the market, if doing so aligns with your strategy. Alternatively, you can split your bets into smaller “chunks” (e.g. 4 x £50 as opposed to one £200 stake) to avoid market disruption. Progress gradually and experiment with different approaches to find what works best.
6. Commission
Understanding how commission impacts the profitability of your strategy is crucial before engaging in Betfair trading.
Take a look at the results of my Mug Betting Experiment, where all bets were placed using the Betfair exchange (Back odds). Prior to applying the exchange commission, the profit stood at +3.77% ROI. However, after factoring in the commission, the ROI dropped to 0.00%. In a field where even slight differences matter greatly, losing 3.77% was significant.
Ensure you incorporate commission into all your calculations or back-tests. You might opt to exclude bets that lack a sufficient margin to cover the expense.
7. Unmatched Bets
If you consistently find yourself unmatched, it’s possible you’re aiming too high (or too low if you’re Laying) with your requested price. Additionally, consider whether you’re placing bets of excessive size in one go.
If prices are changing rapidly or the price is often “going the wrong way”, ensure you have the best technology at your disposal to seize opportunities before others. I’ve recommended top Betfair tools and downloadable Betfair Bots for this purpose.
If predicting market direction proves challenging, the best way to improve is through practice. Many Betfair tools offer free mode options to help boost your confidence. Start by monitoring your results, then gradually progress to low stakes and go from there.
You can also improve your chances of correctly predicting the market by learning how to read the Betfair volume charts. There’s a great tutorial on this topic here, written by professional trader Caan Berry.
8. Pre-event Discipline
As soon as the event starts, the dynamics change significantly. Variables shift, market pace quickens, and any strategies you had in place before the event become less effective. Essentially, all your pre-event preparations may become irrelevant once the race or event begins.
Many traders aim to secure profits before the event starts and promptly move on to the next potential opportunity. To facilitate this, consider using automatic bet cancellation before bets transition into in-play status.
To succeed as a trader, it’s crucial to avoid becoming emotionally attached to any single event. Allowing trades to continue in-play can lead to harmful habits, often resulting in impulsive gambling behaviour as traders try to minimise losses or force profits.
9. Cutting Losses
A scratch trade occurs when you Lay and Back a selection at the same price. Many new traders view scratch trades as unproductive, but they serve the purpose of exiting the market before the price unexpectedly turns against you.
As a trader, you may find yourself making a scratch trade only to witness the price move in the desired direction afterward. While this can be frustrating, it’s important to acknowledge that it could have just as easily moved unfavorably.
However, human nature often leads us to dwell on missed opportunities rather than appreciating what we’ve gained. The reality is that it’s more advantageous to miss out on some winning trades if it means limiting losses.
For some bettors, adjusting to this mindset can be challenging and may hinder their journey to becoming successful Betfair traders.
10. The Premium Charge
The Betfair Premium Charge is a fee that affects Betfair’s most successful traders.
Calculated on a weekly basis, the charge raises the commission to 20% on any profits. For the most profitable users, the rates are further increased to 40%, 50%, and 60%.
This means that even if you manage to overcome all other challenges in becoming profitable on Betfair, you’ll inevitably have your profits slashed. Unfortunately there are few ways to avoid this charge aside from switching to another exchange, like Matchbook.
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