The article is a round-up of my trade on sports that was described in detail in my Greek blog yesterday step-by-step. Due to interest expressed by non-Greek friends, I decided to explain my trading in English as well, without the pressure of time. Images show information about my betting activity and trading results in Greek, which I hope won’t be a major issue since most readers are accustomed with Betfair’s interface.
Making money in sport trading may be just as easy as following smart money. About €50,000 moved the betting odds of Espanyol versus Getafe yesterday morning and taking advantage of this information led me to complete a profitable trade. I traded Espanyol’s odds before kickoff and although €650 of my account were tied up for 6 hours, a secure win of €28 no matter the game’s result was a nice compensation for the effort and patience. Smart money quite usually gives away the general trend of the market which will develop in the future. The earlier you point out smart money, the better your trading effectiveness.
So, at around 14:00 local time I noticed the sudden gain in Espanyol odds’ graph. The odds moved up from 2.10 to 2.30 in a matter of minutes, 7 hours before kickoff. That move wasn’t some random betting activity, since the odds remained at that higher level and the liquidity increased substantially during that interval. Chances are that you already know the importance of an uptrend or downtrend steps up if volume increases. Therefore I considered the short-term uptrend a huge giveaway of future odds movement. Before jumping on the wagon though, I had to calculate my stake and my stop loss.
I wanted to risk no more than €50 on that trade. I picked my stop loss at the lowest low, which was at 2.10, meaning that if the odds fell back to their initial level before the spike, I should trade out. My calculations led me to lay €500 at 2.30, risking €650 at first glance. However, should the odds fall to 2.10, I would back €500 and close my position. In that case, if the game ended a draw or Getafe won, I would lose nothing. I would lose my €500 backing stake but would made that back by the €500 laying stake. At the same time I would stand to lose €100 on Espanyol’s win, since I would make €550 of my backing stake and pay up €650 due to my lay bet. Backing about €50 at 2.10 on Espanyol would divide my loss on home, draw and away result equally.
Thus, I finally placed a lay at 2.30 of €500.
Six hours later Espanyol’s betting odds were drifting close to 2.50 and my prediction was proven correct. All I had to do was to submit a back bet of €500 and trade out securing a profit. I did just that at 2.44 five minutes before the official starting time of the game and secured €70 on Espanyol’s win. By that time it was like completing a trade in financial trading. I had bought at 2.30 and sold at 2.44. Buying low and selling high is always the best way to make money in trading!
All that remained was to green up the profit. In order to green up – that is to divide my profit equally to any outcome of the game – all I had to do was to divide my profit by Espanyol’s odds at that specific time. 70 divided by 2.50 resulted to €28 that I had to lay at 2.50. In the end that was my profit minus Betfair’s commission that my trade earned me just by following smart money!