Pre-Race Trading on Betfair

This article was originally published over a decade ago in 2012. How time flies eh!

It's been slightly updated over the years and it continues to work extremely well for my readers. As a result, many of those readers repeatedly asked me to write a more detailed course teaching pre-race trading in a way that nobody has ever done before. Foolishly, I agreed!

Over two years later, in 2019, I finally completed it. My "Pre-Race Trader's Bible" is some 460-odd pages long, and continues to receive extremely positive reviews.

Pre-Race Trading: Introduction

For good reason, trading the pre-race horse racing markets (successfully) is seen by many to be the 'Holy Grail' of Betfair trading. This is due to the profit potential and the regularity of tradeable markets.

Therefore as you might expect, it can be an extremely elusive goal to say the very least, and not just for beginners either.

Many readers have asked me to explain how I trade the pre-off markets so I decided to put together a free but lengthy article to give a good summary of my approach, as well as some of the essential things novice traders should be aware of when attempting to master these markets.

There is no way any one-page article could take you from novice to pro trader, that should be blatantly obvious to you already, but I will do my best to make this as useful as I can. What you do with this information is what counts.

What To Expect

This section has quite a few points. It may seem a pretty long pre-amble but over the years I have learned more and more about what people expect when they approach pre race trading, and more importantly I have noticed that many people suffer due to being unaware of certain things like the difficulty levels, market volatility and more.

I am going to briefly run through this essential background information before moving on to the markets and how I trade them. This was done with very good reason so I would urge you not to skip past any of these points, the markets aren't going anywhere and a few minutes spent making sure you know these things might help you in the long run.

Beginners

Trading 'pre-race' is generally considered safer for the beginner than trading in-play or 'in-running'.

It allows time for the novice trader to assess things fully and avoid getting misled by sudden and often unpredictable market movements which can be pretty scary just to witness during a race, never mind to trade.

That's not to say it can't happen before the race though!

For the average beginner to Betfair, there is too much going on after the off which can easily cause a "fat finger" moment or a mis-click leading to heavy losses if not extremely careful.

Therefore most people who try their hand at trading on horse racing for the first time tend to stick to the pre-race markets until fully up to speed with the factors that cause prices to move, as well as general experience of the racing business and knowledge of horses, trainers, jockeys, course layouts, etcetera.

(Depending on the methods used, trading in-running doesn't need to be quite so scary. With that in mind I recently published my in play strategies in my In-Running ebook. These are quite beginner-friendly but profitable methods which many readers are doing well with.)

Difficulty Level

Trading horse racing before the off is widely regarded as difficult. I have to agree, certainly in comparison to other methods like laying the draw in soccer.

It would be pretty dishonest to suggest otherwise in my view. Anyone I have ever known who has mastered pre-race trading knows only too well that it didn't all click into place overnight, far from it.

Having said that, I should also point out that once you have mastered it, you will be hard pushed to find a faster way to make decent regular profits on the Betfair exchange in normal working hours.

Market Volatility

Horse racing markets can be extremely volatile.

It's a double-edged sword as the volatility is the reason why it can be such a profitable trading environment, but it's also why it can be such a tricky trading strategy to conquer.

Things happen very quickly, sometimes for reasons we can't understand (no matter how experienced we are). For example, how could I possibly know that a huge gambling syndicate is about to stick half a million quid on the second favourite in the 3.40 at Newcastle 60 seconds before the off?!!

It is not necessary to have a crystal ball to protect yourself from such things, but plenty of experience combined with a huge level of personal discipline and a very defensive mindset in your trading is more than enough to prevent such things emptying your bank of all the green you made in the previous few races.

Remote Learning

I do know of one thing even more difficult than taking regular profits from the racing markets. That is teaching other people to do it!

I can't back this statement up with any data as that would be impossible, but nevertheless I would place a very big bet that if you could round up all the people who have been on any of the many Betfair trading courses, you'd be lucky to find more than 1 in 100 attendees who end up trading these markets professionally full time. I wouldn't be surprised if it was less than 1 in 200.

Is this because the courses are all rubbish? I don't think so, no.

Even a full day sat with someone successful doesn't 'translate' easily into success for the attendees. Even if things seemed to 'click' on the day, a day or two later back in their familiar environment with the expert nowhere near them, this can feel like being back to square one. So my readers tell me anyway.

No 'Lazy Riches' Here

Also, I know myself just from running this blog, many (perhaps most) attendees and people expressing an interest in learning to trade are looking to "get rich quick".

I get quite a few emails from people asking how to trade football "without having to do all the analysis" or asking questions which give away their motivations, such as "What's the best horse tipping service?" (This site is about trading, and last time I checked, that ain't gambling!)

Many people seem to want 'All the good stuff, without the effort'. The laws of nature dictate that anything worthwhile takes effort, the more worthwhile it is, the more effort it requires.

Since trading horses pre-race is the holy grail, it stands to reason that this form of trading takes more time, effort, discipline, experience, knowledge and patience than any other method. I believe this to be the case too, without a shadow of a doubt.

If easy money is what you're after, better look elsewhere methinks!

“Patience is bitter, but its fruit is sweet.” Aristotle

Aha Moment

Trying to learn racing trading is like trying to read a very big book by a very dim light. When your "click" happens, it's as if someone just turned on a 500W halogen bulb and added colour pictures to your book.

It's literally that sudden and that significant a moment. It's completely unmissable when it happens.

Anyone reading this who has mastered horse racing trading will know exactly what I'm referring to. There is an unmistakable watershed event, at least there is for those who stick around to reach it.

Until then, it can at times feel a bit like guesswork. Suddenly one day, if you put in the hours, with buckets of self-discipline, and follow a long list of imperative do's and don'ts, the previously blurry experience of watching ladders go up and down seemingly 'without rhyme or reason' just clicks into place and becomes clear at long last.

You are then able to glance at a market and within a few seconds decide whether:

• There is no trade
  
• There is an obvious trade
  
• There may be a trade soon, IF x,y and z happens.

In my experience, the first was the hardest to learn to identify.

It may sound silly but again, for anyone reading this who knows how to trade pre-race markets, it will make a lot of sense I am sure. The reason is because of that age-old arch enemy of every trader, especially learners... GREED.

For some people it can take literally months just to learn to stop looking for trades, and instead look at the markets in a more calm and balanced way, just aiming to find out what they are doing, rather than what we want or hope them to do. It takes a long time to kill off that unscratchable itch to 'find' a trade.

Generally, beginners look for trades. Experienced traders look at markets, to see if there is a trade. And the answer most of the time is NO!

Don't Force It!

This is where novices try and 'force a trade' out of an unwilling market, and I don't care who you are or how big your Betfair balance is, NOBODY is big enough to push the markets around.

Trying to only ever ends in tears, and substantial losses of course. Sitting tight, resisting urges to click when your gut feeling says "dive in" is in my view the biggest key difference between experienced traders and novices, that goes for any market on earth, but especially the Betfair pre-race horse markets where the speed and size of the trends can be an irresistible temptation for even the most disciplined character.

As some of you know, the majority of markets do not have a trade available for you every time you glance at the screen, surprise surprise!

Easy to understand that logic in the cold light of day isn't it?! But knowing the theory, and behaving accordingly when faced with a busy screen of clickable ladders, these are two very different things.

This is assuming you are looking for a sign that a move is about to take place which is the main focus of my approach to pre-race trading. Of course some are just looking to scalp one or two ticks, and for those people yes there could easily be many trades in nearly every market.

Image: A nice picture of a heavy drifter. Even nicer if you could see it coming when the horse was around evens (2.0)

I do that myself when nothing else is on offer, but generally I am looking to trade bigger moves whenever possible.

Spotting a move in the markets (ideally before it happens!!) takes considerable practice and experience, along with a few essential tools.

Betfair trading software is an absolute must. Live TV pictures are essential too.

Live Racing Coverage

Despite the fact I have known a few people who traded without this, I would't advise anyone to.

You will need some form of live feed of racing coverage and ideally some commentary too. This informs your trades in such a big way you'd be foolish not to have it.

Betfair

You can use Betfair's live video feed and it's definitely good enough to trade with. It gives you a small pop up window on your computer screen.

Many new traders use this because it's free. I remember years ago when it was nowhere near as slick and it would often error or fall behind. But these days its extremely fast, reliable and up to date.

You need to have a trade running or at least a 'matched order' in the event you want to watch.

That's fine when you're trading, but unfortunately it can be a bit of a problem for new traders who are not ready to put real money into the markets and just want to watch and learn.

RacingUK

If you can afford to, you should subscribe to a full-time horse racing channel such as RacingUK. This is perhaps the most useful item in your toolkit.

It's just a deluxe option compared to the Betfair feed. Firstly you have commentary in between the races which can give you tips and insights you won't get with the Betfair feed.

Secondly you have it on your main TV screen which is bigger, far better quality, and frees up your PC screen for more ladders or charts/information.

ATR

You can also watch AtTheRaces on channel 415 on Sky. It's free so you may as well use it, as long as you remember it can be very slow, often 6-8 seconds behind the action (by my calculations).

ATR broadcasts the smaller races which aren't shown on RacingUK so it's worth saving 415 as a 'favourite' with your remote if watching via Sky.

That way you can flick between the two channels as needed during your trading session so that, from the second you finish trading one race, you're immediately hearing the commentary (and seeing pictures) of the next race while you begin assessing the runners' prices on the ladders.

Delays

Technology is great, but no amount of technology can completely remove the 'delay' between those cameras filming the live action, and the pictures reaching your computer or Sky box.

Due to these delays on all the feeds, especially ATR, I would never advise trading solely based on what you see on the coverage.

The stuff to focus on is the information shown in the ladders and charts. The pictures merely give you hints and tips for why the ladders are doing what they are doing. They can therefore confirm something your ladders are telling you.

Most of the time the live feeds are just a safety net, or an extra indicator, not a trading indicator strong enough in their own right to validate a trade.

If you don't understand why, consider the fact that what you are seeing on the TV screen is being seen live (with no delay) by trackside traders. Why would you want to put yourself up against those highly experienced traders, and hand them a 6-8 second (or longer) advantage over you? Are you just keen to throw money away?!!

Good, neither am I. Watch how fast those on-track traders snatch your cash if you leave it hanging out in the breeze! Your trading software runs on the Betfair API which is lightning fast, practically instantaneous actually, and it will show you what's going on at exactly the same time as everyone else.

So you have no delays and no disadvantages, that surely must be a good starting point for anyone, beginner trader or full timer.

So my rule is 'Software first, pictures second', always in that order.

Well that's the background basics out of the way. Let's look at how to trade these exciting markets....

Pre-Race Trading Strategies

There's a variety of trading methods in my toolkit, but the main bulk of my trading is done using just two approaches:

• Early trends - All day until 30 minutes before the off (software not needed)
• 10 mins before the off - The Big One! (software essential)
  

Note: If any of the terms below are new to you, please consult the Glossary in my article: Betfair Trading Explained.

Early Trends

This is a fantastic way for beginners to get involved with pre-race trading but at a much slower pace and with significantly reduced risk.

With this method you can learn all about how and why the markets move, but you can do it on a kind of 'nursery slope', leaving the more frenzied '10 mins pre-off' period for much later in your learning curve.

You don't even have to worry about buying trading software or learning how to use it, as this can all be done in the browser.

Although I am a huge fan of this sneaky little method, it's much more useful to those with small trading banks (i.e. novices), and so it only forms a very small part of my racing trading overall.

I still love it though, and so will you I hope!

The Objective

This approach aims to find a strongly fancied horse, usually within the top 3 or 4 horses in any race based on the early morning tips in the Racing Post, Sporting Life and other leading newspapers and websites, combined with chart analysis and other data.

This is long before the markets start attracting any serious liquidity or 'volume'. Around 9am is fine, earlier is fine too. It is very rare that I look to trade in markets with "thin" volume but these early picks are the one and only exception.

The Edge

The thin volume can actually help here. If the markets are only just getting going, the lack of volume can often mean that the market hasn't fully "formed" yet, in other words the runners haven't been backed or laid heavily enough to price them at anything like their true ability or likelihood of winning.

Therein lies our advantage, because they soon will be, and we can 'ride' that wave of market correction.

Trading is about trying to find a way to predict moves. In this case, what the tipsters are saying and what the early betting markets are doing give a combined indication which is often very reliable, leading me to take a position based on where I think the volume will go when it arrives later in the day.

Why So Early?

Go in any bookies at 9-10 am and see how empty it is.

Spend the day in there (as I've done many a time in a past life of dirty rotten gambling!) and you'll see that nobody really goes to these places early in the day except the die-hard down and outs, and occasionally a few pros who want those early prices for the same reasons I do!

When the punters start cramming through the door around lunch time, stuff starts to happen, the pace picks up and prices start moving around.

When the Betfair traders get on their ladders, stuff happens even faster.

When the serious traders (and bookies/syndicates) get involved, there is a frenzy of activity and after an hour or two of that the markets can look very different to how they looked at the start of the day.

This change is what I am seeking to exploit.

The Process

Scouring markets, coffee in hand.

First I look into the early morning betting activity. I have used many different processes for this over the years (OddsChecker, Pinnacle, Arb calculators etc) but at the time of writing I am refreshing my approach so I will edit this section and insert the exact procedure once I finalise it.

Then I look at the tipsters' selections, the bigger their readership the more they matter. I want to see a 'story' developing where tipster picks corroborate the early betting market activity.

Where the early betting money is going can tip me off to a horse that will be strongly fancied later but I need the secondary check of tipsters to give a possible (likely) reason for those early betting trends.

Remember, professional and serious gamblers don't rush into Ladbrokes to fight the queues for the last minute prices before the off. They are well-prepared and determined to get the best possible price. These are often found in the morning, and this activity is the reason they change through the day.

As my ebook readers know, I am a stickler for always having multiple reasons for every trade. One on its own is just too unreliable and therefore too risky. My risk-loving days are gone. My new adrenalin rush is avoiding unnecessary risk!

Likewise the other way around, seeing the tipsters all 'napping' the same horse is not enough to start backing it in, but once we see betting money following the tipster's selections, that corroborates the idea and we now have evidence that the tipsters are influencing the punters (at least with regard to this particular event or horse).

This gives us a good idea where the growing volume is likely to be going during the day.

Take a position

If many of the tipsters fancy a particular horse, and the early betting activity shows a large proportion of bets going in the same direction, I would then place a back bet on the horse as early as possible.

I might be forced to take prices the other side of the book to get my money matched. It's not always possible to get large stakes matched due to the low volume, so I sometimes drip bets in gradually. But for beginners this won't be an issue and this method is well worth waking up a bit earlier for!

I watch the odds throughout the day monitoring my position fairly loosely. With practice this gets easier, they rarely go badly against me but occasionally they can, so I check every hour or so to begin with).

Increased Liquidity

When the market warms up with heavier volume I will look more regularly hoping for a stronger pre-race trend to form as it gets backed in closer to the off.

This doesn't always happen, some horses come in based on the newspaper tipsters but then the trader's undo that idea and turn it back around, hence the reason for more regular checks later on.

Tipsters are a punter's tool, not a trader's tool, so they have more value in the morning than later on, and they are frankly worthless once the race gets very close to the off, around 30 minutes before the race. At 30 mins pre-off you should be closing any early trend trades, that's the very latest you close them.

Trade Closure

If the horse doesn't keep trending the 'right' way, or if it looks like turning around and going against me, I will close out my trade. Usually it will go 'my way' for at least 5-10 ticks, often a lot more but sometimes not and of course some will always be losing trades.

I will take a profit when I feel it has run its course as far as the trend is concerned. If it goes against me, I won't let it go too far as clearly my early idea was wrong, so why keep throwing money at it?

Remember: Run your profits. Cut your losses.

The quicker you close trades that aren't going your way, the bigger the overall profit of the method.

The only other thing worth mentioning is the use of charts in my trading software. By using these charts you can get a better idea of the trend's strength, and when it looks like slowing down or reversing which is obviously a good time to exit. I check regularly to get a fresh look, if anything looks like changing drastically, I am out. If nothing has changed, I will hold on as long as possible as it inches in my favour.

Early Trend Trading V2.0

Recently I have been working with a friend of mine (programmer) to try and develop a small piece of software to do most of the donkey work mentioned above, as much of this can be automated with software, especially the trade-hunting stage.

The idea is to design something which can do all of the selections for me in seconds, and possibly even manage the trades too if we can get really clever with it.

But for now maybe just an alert to text or email me if the price moves suddenly against my position. That would be nice, and would mean the popping back to the screen became a thing of the past. My legs are getting old after all!

It's coming along well but nowhere near finished yet. If it works how I hope it will, and passes some rigorous testing (of course!) then it could be a rather nifty piece of kit. I will update the site as and when that happens so please subscribe to the email list to be notified.

10 Minutes Pre-Race

I said this is 'the big one', and it sure is big. It's what makes up 90% of my pre-race trading.

For that reason I won't be able to go into the extremely fine level of detail given in my pre-race course, as there are many 'micro-strategies' within each overall technique. To be honest, it was actually a real challenge to fit it all into less than 500 pages!

But I will try to give you the best possible overview of my pre-race strategies within the bounds of a one-page article, however long the page may end up being!

Many call this 'swing trading' but for me that's misleading. This is trend trading. The fact it has somehow adopted the name 'swing trading' just goes to show how tricky these markets can sometimes be.

Most of my pre-race trading is done in the last ten minutes before the race runs.

Why 10 minutes?

It's not a robotic rule, it could sometimes be 7 minutes, or 15. It all depends on what the market looks like and what activity level it has reached. But the average is about 10 minutes, that's roughly the period when markets are usually most active and of most interest to trend traders.

There is a reason, of course. It's because, if you were to sit and watch every single UK horse race one after another, ten minutes is approximately how long you'd have to wait from the end of the last race until the start of the next.

That's the golden trading period when massive volumes of money arrive on the ladders and things get exciting or, for many, downright scary.

This new money is powerful enough to start big new trends, to stop old ones in their tracks, and to cause sharp 'whipsaw' reversals. Keep that in mind, especially if you have an early trend trade running later than you shoud!

Of that ten (ish) minutes, the first few minutes are usually spent analysing the runners and ladders, checking the charts, and waiting for indications on what this new influx of liquidity is going to do to the current picture. You can literally watch as thousands upon thousands pour into the market, by the second.

The more money involved, the more reliable the signals become. This applies to any market. Thin markets are known for wild volatility and unpredictability. It therefore stands to reason that the bigger the market (in terms of volume) the greater the stability, and the more 'trust' we can have in the signals we're seeing.

Early in the morning, one big bet can move a horse quite a long way in or out, it can even start a 'false trend' running as some people (stupidly) 'follow' the money.

During early trends analysis, any races with a big sudden chunk of money would be ignored generally, as that can be enough to imbalance the market and cause a higher risk of a losing trade, due to the trend not being 'real', for want of a better word.

When it comes to trading just before the off, big money is coming in constantly. So the indications given by the flow of that money are much more reliable, and increasingly so as the horses line up or go into the stalls.

There are many 'types' of markets covered in my course, but to simplify things I am going to cover just the two most important types and how to approach them.

Pre-Race Trend Trading

A trending market is quite easy to spot once you know how to identify them.

We're looking for a horse who's price is on a constant and steady move in one direction. It might be moving fast but it doesn't have to be. Consistency (of direction) is what it's all about.

Also bear in mind that moves always have some fluctuation, i.e. some 'back and forth' or 'noise' within the general trend. In other words, a ladder might move four or five ticks one way, then pip back one or two ticks, and onwards again in the general direction.

This is normal in any market on earth, nothing moves in a straight line, it's more like a staircase, and the direction of that staircase is what we'd call the 'trend'.

Charts (ideally in trading software) are by far the easiest and most reliable way to spot trends. The 'Market Overview' chart is particularly good as it shows the trajectory (in price) of all the main contenders on the same canvas, so more can be learned at the same time.

A good example is the chart shown on the right. That's a Market Overview chart provided in Geek's Toy software.

Which line do you think shows a strong general trend?

It's actually a trick question, as there are two: Green and Orange.

(Some might say yellow as well. It's trending, but not what I'd call 'strongly'. It's shallower/slower, but it is trending and worth taking note of in case it strengthens later.)

Note my point about learning a few extra things: The two strongest trending runners are going in opposite directions. The runner represented by the orange line is on a steady drift. The green one is showing an equally steady steam.

Both are valid (and strong) trends, the useful thing here is to note that these two runners are interacting. In other words they appear to be mirroring each other.

Price interaction isn't a topic I have time to explain fully here. It's discussed in detail in my PR ebook simply because it's a phenomenally powerful indicator.

Short version: If you decided to back the 'green' runner, you might be wise to keep a very keen eye on the price action of 'orange' while you're in that trade.

What else can we see from this chart? Well, many useful things actually. Here's what comes to my mind instantly:

• Yellow is an outsider (higher up = bigger odds) which is being backed in a bit
• Blue was third favourite but now looking more like an outsider, trading places with yellow.
• Green was 3rd/4th favourite but has taken orange's place for second favourite and looks set to become the favourite.
• Purple isn't doing a whole lot so nobody really cares for that one
• Red began as a well-backed favourite but now looks weaker, likely to become 2nd favourite soon.

See why I like charts? 🙂

But I digress, again. Let's get back on track (pun totally intended)...

Identify The Main Contenders

I open all charts for the main players in a race. (That can be done individually with Betfair charts, or using the 'Market Overview' chart above in your software).

When I say "main players" this is not an exact science but I am generally referring to all horses which look like they have half a chance based on their odds.

In some races, the favourite might be odds-on, the second favourite is 3.0, the third favourite 6.0 and the rest over 20.0. In this case, I would say there a three "main players".

However a competitive handicap at a big meeting might have 5 or 10 horses all priced under 14.0 and with no clear favourite, in which case there are a lot of charts to look at.

Remember: 'Sitting out' IS a trading decision! Tea can save you money!

For this reason, I may not even bother with that type of race, that's the old "time for a cuppa" method, you can have that one for free!

With practice and experience of watching the markets, it's soon quite easy to see at a glance whether the race has a wide field of fancied horses or, in most cases, a strong top one or two horses plus a few others in contention.

The rest are all outsiders and I virtually ignore them. "Virtually", not "completely", as if a horse is backed in from 24.0 to 12.0, this could have a big impact on the other horses, even the favourite.

But this is rare so I tend to only look at outsiders' charts if the main players are acting oddly or if I can't fathom why the favourite is drifting when it looks like it should be coming in or holding steady.

Horse Racing Trading Indictors

It is absolutely imperative that you only trade IF reasons exist. Those reasons are variable, but they should always include some fundamental trade indicators.

Assuming I open the charts and I see a favourite which has crept in (coming down in odds) all day, and is still gradually coming in 10 minutes from the off, I will look for possible reasons.

This is usually (ideally) caused by one thing: The other horses are not attracting enough interest, so the bulk of money is going towards the favourite.

If I check and see all horses other than the favourite are looking weak (drifting out in price), I will back the favourite and keep an eye on those other horses in case any of them suddenly gain support, as that could threaten my expectation of the favourite to continue shortening.

Most strong favourites, without any real pressure from other horses in the market, will tend to shorten in price the closer you get to the off time. Everyone loves to back a strong favourite, that is not only true in the bookies but on the ladders too. And it's a valid trading strategy for you as well, so long as you can't find reasons not to.

Of course the reverse is also true. If a horse is drifting and all other 'main players' are looking fairly strong (either holding their price or steaming), I'd be laying that drifter, and then watching for reasons or trading indicators to tell me why my trade could go wrong, or maybe reasons to add to my position.

Until I see those reasons, my trade remains open, riding the fluctuations in price and counting on that general drift to continue until the 'picture' changes, or the runners are lined up for the off. (Don't miss that, it can be very expensive if you do, apparently! 😉 )

Example Trade

Readers sometimes send me screenshots of their trades for my thoughts/analysis or to show their progress. Below is a screenshot (thanks AJ) showing a good example of a fairly simple trade. Note that he isn't using the Market Overview type chart shown above. Due to having only one screen he prefers to use Bet Angel's charts, one for each runner shown at the bottom of each ladder:

Image: The favourite has struggled to resist the pressure from no less than three other runners all shortening nicely. He decided to lay it and stick with the trade until the stronger ones reduced in strength. That's starting to happen as he took this picture, and it's now about time to get out.

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