Sunday, Oct. 19, 2014

Why Most Traders Fail To Turn A profit

Betting Exchange TutorialsMost punters who use Betfair do not make any money from the site, and may never do so. The reason for this can be expressed with one simple phrase: “herd mentality”.

The truth is that, if you plan on profiting from Betfair, you need some unique competitive edge over the market, something that others do not know about. This is only common sense, and anyone with a loose understanding of how competition works (in any field) will have to agree with me. Unfortunately, knowledge does not always translate to action, and the same punters who know I am right will nonetheless simply follow the methods everyone else is using, and then get upset when they don’t see results. This brings me to trading on the exchanges, as traditionally understood by the vast majority of Betfair users.

Most punters understand the most basic rule of trading on Betfair, which centres around the weight of the money:

If there is more money on the back side of the screen, the price will rise; and if there is more on the lay side, then the price will fall.

It is after all simple supply and demand. There are numerous trading manuals that will sell this particular point to you, and direct you to the British horse racing markets armed with this knowledge. Unforutunately, this knowledge alone will not work as an out-of-box’ solution.

Here’s why:

When Betfair first rolled onto the scene, weight of the money trading was much easier to apply than it currently is, especially when it comes to the British horse races. Back then, there was less liquidity (so slower moving markets and easier to spot trends), and not everyone was following the same trading system. This made for lower barriers to entry and a more accessible market for your average newbie trader. But that was then.

The problem with simply following the money on your average horse race nowadays, is that there are thousands of others doing the exact same thing, using the same manual, the same bot, the same bank. Add market manipulators to the mix, along with a good dose of traditional backers/layers, and the direction of the odds ten minutes before the off on a British horse race becomes incredibly difficult to predict. Those of you who have tried the traditional model will no doubt agree.

The few traders who are able to profit from the herd method of trading probably have been doing it for years, and have amassed a very large bank to trade with. This means they can wait until the odds are very heavily stacked in their favour, and trade very rarely, depending on what their carefully honed instincts tell them. Most beginners do not have any of these advantages, but they continue to plow with the traditional trading mentality, and then get frustrated when they simply break even, or come out with a small loss.

But it doesn’t have to be that way.

One piece of advice I can give is to look for your own micro-niche; your own spin on an existing method so that you can keep trying new things out until one of them clicks for you. If you already have a good understanding of the weight of the money dynamic, then try using it in other markets. Horse racing is one of many out there, so don’t restrict yourself, especially when you start: it can become a bad habit. Don’t be seduced by the big amounts trading hands on the more popular markets - swim with the smaller fish and experiment until you find something that works. You will probably be very surprised with the results.

I spent all my spare time (when not trading), watching the less-liquid markets on Betfair and looking for tiny oportunities to profit, when most people are using the same methods as one-another in the more popular markets. The saddest part is that the punters who are most guilty of this are the same ones who are least likely to succeed using these methods - the beginner’s with the small banks, and little patience for a long-term outlook.

Experimentation in the less popular markets is how I have developed my own systems, and you would be well-advised to break free from the herd mentality when trading on Betfair. Never forget that acting like everyone else will provide you with - at best - a break even balance.

… …

This article was written by the Easy Trader Pro team.
Easy Trader is a unique trading system aimed for beginners and those who are not able to profit from the old ways of trading.