The new European season kicks off this weekend and the liquidity should return to enable us to trade the pre-match markets effectively. Before I go on to talk about the importance of the stop loss in pre match trading I just want to go through a few ground rules.
Here I am assuming that you are trading on the Betfair platform.
Firstly, never place all your betting bank or indeed keep all of you betting bank in your Betfair account especially when trading the pre match markets.
In the past few years, the Betfair platform has proved to not be 100% reliable and you can almost guarantee that the moment you put all of your bank into the market. The Betfair platform will go down leaving you vulnerable to a very big loss.
When trading the pre match markets it is imperative that you have the resources available to exit the trade on another platform. Whether that be on another Betting Exchange or via a bookmaker.
So never keep all your bank in your Betfair account or use all of your Betfair account to enter a pre match market.
There are many ways to trade the pre match market and although there are far more technical methods our application simply highlights where we believe the price may be going and when a price is weakening or strengthening.
We can see an example of this with the video below.
Now when looking at a potential trade the price of a selection will either go up or down. So, if you were to randomly pick 100 selections and say whether the price was going to come in or drift out over the long term you would be correct 50% of the time.
Hopefully by using our pre-match application this will increase your strike rate substantially.
However, in my opinion the most important element of pre match trading is setting a stop loss and keeping to it.
In the next example I am going to highlight the importance of the Stop Loss and assume that you have placed Ten trades of which 4 have gone in your favour and 6 trades have gone against you.
For ease we will say that all the Trades have been placed at 2.30 and that you have placed £100 in the market. So, for every point movement you are either gaining or losing £1
I am also going to assume that you are going to Red Up for an equal loss or Green Up for an equal win
The 6 losing trades went as follows
2.30 to 2.34 So you have lost 4 pts & when equalling the loss -£1.70
2.30 to 2.36 So you have lost 6 pts & when equalling the loss -£2.54
2.30 to 2.42 So you have lost 12 pts & when equalling the loss -£4.95
2.30 to 2.50 So you have lost 20 pts & when equalling the loss -£8.00
2.30 to 2.56 So you have lost 26 pts & when equalling the loss -£10.15
2.30 to 2.70 So you have lost 40 pts & when equalling the loss -£14.81
So here on these 6 trades your loss is £42.15
The 4 winning trades went as follows
2.30 to 2.24 So you have gained 6 pts & when equalling the loss +£2.67
2.30 to 2.18 So you have gained 12 pts & when equalling the loss +£5.50
2.30 to 2.08 So you have gained 22 pts & when equalling the loss +£10.57
2.30 to 1.95 So you have gained 35 pts & when equalling the loss +£17.94
So here on these trades the profit is £36.68
So overall over these 10 trades you are running at a -£5.47 loss
Placing the Stop Loss
Now let’s assume that you have a stop loss in place and in this case, I would exit a trade after a 3 tick move against you which would mean entering at 2.30 and exiting at 2.36
As we have seen this gives a loss of -£2.54 and that is the maximum that I would risk on any trade.
So, if we employed the stop loss, we would have the following
2.30 to 2.34 (Stop Loss 2.36) So you have lost 4 pts & when equalling the loss -£1.70
2.30 to 2.36 (Stop Loss 2.36) So you have lost 6 pts & when equalling the loss -£2.54
2.30 to 2.42 (Stop Loss 2.36) So you have lost 6 pts & when equalling the loss -£2.54
2.30 to 2.50 (Stop Loss 2.36) So you have lost 6 pts & when equalling the loss -£2.54
2.30 to 2.56 (Stop Loss 2.36) So you have lost 6 pts & when equalling the loss -£2.54
2.30 to 2.70 (Stop Loss 2.36) So you have lost 6 pts & when equalling the loss -£2.54
So here on these 6 trades your loss is £14.40 and when we add the £36.68 profit the overall profit is £22.28 for every £100 put down.
Summary
So, to summarise the above
We have placed 10 trades of which 4 have gone in our favour and 6 have gone against us. However, as we have placed a stop loss, we have still ended up making a decent profit.
Now this is easier said then done. It is human nature to want to always be right and although people may make a mental note of the stop loss. Often, they let their trades go into the negative hoping that the price will turn.
As we can see from the above example you don’t even have to be right half of the time to make a decent profit trading the pre match markets and the pre match application certainly points you in the right direction as to where the price may go.
With the European season starting this weekend we will restart the members Zoom sessions where we will highlight the things to look for such as entry and resistance points etc.
We will record any trades highlighted on these sessions.
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