Rafael Nadal is currently the favorite tennis player to win the French Open 2013 Mens tournament according to Betfair’s odds. Djokovic and Federer are next but we are not really interested in who is going to be the tennis tournament’s winner. In Betfair trading we can trade the odds and be profitable before the final match. Here is how I would trade the tournament winner.
Note that I haven’t watched any game in French Open 2013 and have zero clue about any news whatsoever. My predictions are solely based on the Betfair graphs.
Don’t just bet on Nadal at French Open 2013; yet
Although Nadal is progressing, his odds are drifting (from 1.80 to 2.25). Strange, huh? Not so. You see, he may have been winning the games, but other results influence his chance of winning the French Open 2013. A good example is to assume the exact opposite: if Djokovic was eliminated, Nadal’s chance would skyrocket compared to the odds’ reaction after his biggest win. Thus, a good performance by Djokovic and Federer and no surprise losses from strong tennis players look threatening to Nadal’s win. After all, competing with only the best of the best one after the other would surely have a negative effect on his own performance, and that is maybe why the implied chance Betfair graph shows a decline recently.
I’m using that particular graph, due to the couple of spikes that made the odds graph pretty much worthless. So, a decline in the chance percentage means a drift of odds and vice versa. At this point, a support level is easily to be spotted and it’s none other than 45% (odds of 2.25). Initially the level acted as a resistance level, but once it was overcome, it has provided support to Nadal’s chance of winning 3 or more times. Even today we can back or lay at 2.25 at Betfair.
There are two options now, if we are looking to trade Nadal in the French Open 2013 winner market at Betfair. First, we should lay given that support levels provide excellent entry points for long positions (don’t know what a long position is? First, read why Betfair trading is like stock trading). A tight stop loss should keep us safe and calm, minimizing the risk by making us exit the position right below the support level, say at 40% (odds of 2.50). The first profit target could be placed at 55% (odds of 1.80) where we should take out at least half of our position (back 50% of the money we used to lay at 2.25). Use a trailing stop loss afterwards to exit the rest and let’s hope Nadal won’t have trouble taking the tournament down!
The second option is to wait for a breakdown or a breakout. A breakdown will occur when Nadal’s chance to win French Open 2013 breaks below 45%, say at 40%. Then I would buy his odds (that is lay Nadal’s odds) and would place my first target at 30% (back at 3.30) to secure my first profit due to the advancing odds from 2.25 to 3.30. Obviously in that case Nadal will have serious trouble and an early elimination could be in the works. Again, a trailing stop loss will keep us in the market, should Nadal lose a game.
A breakout on the other hand at the time of writing is a lot less likely. We will consider a breakout when Nadal’s chance breaks above 55% (odds going lower than 1.80). Until then the previous options will keep us busy.
Odds consolidating for Djokovic, trend reversal for Fereder’s odds
Meanwhile, there are some nice setups in the odds graphs of both Djokovic and Federer in the same market. Djokovic is currently traded at 2.80, quite close to the support level of the trading range (2.50 – 4.00). Again, there are similar options here like Nadal’s trading strategy. I would either wait for the odds to go down to 2.50 and lay, hoping for another pullback to 4.00, or look for a breakdown below 2.40 and back Djokovic. The support level can be used for setting the stop loss orders in both scenarios.
Federer’s graph is a whole other story. His odds have been trending downwards since the beginning of the French Open 2013. Finally they found support this week at 10.0 and we can now bet on Federer at 11.0. Yet, the important development is considered to be the trend line’s break. While the odds keep trading at the support level, the trend line has not been confirmed, rather than penetrated. This may indicate a likely trend reversal, which favors long positions – that is laying at Federer’s odds. If we expect that signal to be fake, we should wait for a breakdown and back Federer.
It’s not the first time I’m discussing how to trade odds in the French Open tennis tournament. Back in 2011 I showed how to trade Nadal in the winner’s market, and one year later I did the same exact technical analysis on Nadal, Djokovic and Federer’s odds in the French Open 2012. Yes, I truly consider the French Open tennis tournaments a great opportunity for position trading at Betfair or any other betting exchange.