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!
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.
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.)
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.
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.
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
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
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.
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.
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.
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.
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.
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.
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)
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!
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 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.
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).
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.
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.
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.
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! 😉 )
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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Saying it and doing it are two different things, and even today I may still occasionally slip up by entering a market I wasn't too clear about beforehand.
Just being honest, I don't like to admit this really! I am yet to meet a "perfect" trader, and I sure as hell ain't one!
If I do get into a market without enough clarity, I am out the very second I realise my mistake. This is another very hard thing to do in practice, but very important to learn.
Trading isn't personal so we must never take it personally, even when emotions are high.
The market didn't fool me. I fooled myself, I disadvantaged myself, so I must restore my advantage by getting out and saving my cash for a race I do have a better feel for. The markets are never right or wrong. They just.... are. 🙂
A steaming or drifting favourite is never enough reason to trade. I don't trade "moves". I trade the reasons for a move. A move which you can understand is the only tradeable move. Otherwise how would you know when the move is coming to an end? And they always do of course.
Close Trades With Pride, Not Greed
Picking good exits is half the battle of successful trading. Staying in until it reaches its "top" is suicide, which is obvious when you think about it as the top is only evident after the price comes down again!
If you are just "chasing" a drifting horse which is drifting for reasons you have no idea of, you are basically the mouse running up the clock. You are aimless, purposeless, confused, and ultimately nervous of that rebound you 'just know is coming' but you haven't a clue when!
Besides, you'll just get "shaken out" when the market has a small retracement or re-consolidation. Out you get, while the drift may well continue further. You can't possibly know whether it's just consolidating (pausing) or actually has finished trending and could whipsaw back on you, unless you know why the move happened to begin with.
If you only understand one move a day, you should only trade one move a day.
It's as simple as that. Don't over-trade, over-watch instead! It's cheaper, and far more useful.
If In Doubt: 'Think See-Saw'
A trader and good friend of mine for many years once said something quite brilliant:
'The markets are basically a see-saw, with the favourite on one side and ALL OTHERS on the other.'
It may not always be quite that clear cut, but that's a superb way to think about it in my experience. If one side is pushing down, the other side naturally must rise up as the book tries to stay in balance. Getting this "feel" is where the real 'Aha Moment' lives.
More importantly, getting a feel for how much power is in that see-saw, that's when you are really motoring.
Some markets given a casual glance can look like there is a lot of downwards pressure on the non-favourite side, but on closer inspection it might have been misleading as the prices may just be sitting on top of solid 'resistance points' (strongly traded prices resisting the price moving through).
In which case you would bear in mind your initial feeling, but you would need it to be confirmed by those horses sitting on resistance actually breaking through that resistance. Then the see-saw would have some real power behind it, and a trade is then sensible as the odds are heavily in your favour that the favourite will move and will move enough distance to get you in, out, and greened before it runs out of steam.
As you may have realised, I tend to mainly trade the favourite. This is not a concrete rule by any means, I do trade other runners but I trade the favourite far more often. It's where the bulk of the money has gone during the day usually so it at least feels like the safest place to stick my cash.
Obviously in some races there is no clear favourite and I will either walk away or have a half stakes dabble on another runner if I have a half-decent 'hunch' about what's going to happen. In such cases I am ready to pounce on the exit button if I am wrong, but equally ready to pounce in with my other half stake if my gut feeling was right.
Price Range Trading
Ranging markets take mere seconds to identify. Years ago when I began trading I used to hate these and I usually left them alone as I was only ever hunting for a big fat juicy trend.
Over time, I learned that money can be made from trading a Betfair price range, not as much as trends perhaps, but more than enough to be worthwhile. Making a few quid here and there in between the bigger moves certainly seemed better than drinking too much tea and running back and forth to the loo all afternoon.
That's not to say you can only earn a few quid here, there's plenty more than that available, and a lot more trades too.
A ranging market is basically just a market where the horses are not trending strongly, and are bumping up and down inside a previously traded range of prices.
You can see this 'traded range' within your software, all the main software programs show the traded volume next to each price on the ladder. This gives an instant view of where that horse has traded and more importantly which prices saw the most money being traded.
- A 'ranging' horse is a horse which has a very clear band of prices at which it has traded, and very little volume outside that range.
- A ranging market is just a market where all the runners are doing that, they all have a tight and clearly-defined range, and they just don't seem to want to trade outside of it.
The image opposite shows a good example of a ranging horse. The far left column shows the number (of pounds) that have traded at each price increment, shown in light green.
The darker green shows only the volume traded in the last 60 seconds (variable based on software settings). Both are useful for showing a short-term and longer term 'range'.
In this case you can see the horse has actually traded well above, up to 4.0. But those small sums can be ignored as that was probably just early morning activity while this runner found it's 'correct price'.
This might remind you of why and how I do the early trends stuff above. There was a gentle shortening of this horse's price throughout the day until the real money arrived to determine its 'real' price range based on a much bigger weight of opinion (money).
After this time the big money has quite clearly shown what prices this horse 'should' be trading at. It has traded as low as 3.15 but again you can see the volume is £86 (which means £43 backed and £43 laid), versus £9,500 traded at 3.35 and £9,700 traded at 3.45.
This tells me that the real money formed a tight and clear range of (roughly) 3.6 to 3.25. Remember, this determination is not an exact science, it's an experience-based opinion and I wouldn't object to someone calling 3.50 the top of the range here. (Though I would say 3.25 is a firm and clear bottom.)
Any range of more than about 10 ticks would be ignored as that's not tight enough to be reliable. But in this example the horse has slowly been backed into this range and now it's found that range it is likely to be fairly "obedient" to its boundaries.
There are no guarantees in trading, but the probabilities are good enough for me.
Handicaps Are Often 'Rangey' Affairs
A competitive handicap (Hcap shown on Betfair) is often a good place to find these, not that I go looking for them specifically, but if I see "Hcap" I might start loosely 'expecting' tight price movements.
Handicapped races frequently have horses trading within a clear range. Sometimes only 4-5 ticks, sometimes more, sometimes even less.
Knowing that this "range" is where the horse has traded all day is valuable information. Of course past data is certainly no guarantee of future performance (heard that before?!) but it stands to reason that if a horse has only traded between 1.94 and 2.0 all day, it is reasonably likely to meet with some resistance if it tries to trade outside of that range.
Because it has resisted doing so many times already. And each time it does, the 'boundary' is re-validated and often strengthened.
Of course it's not the horse that's "resistant", but the market participants, the punters and traders in other words. Every time the horse was backed down to 1.94, the layers got off their back sides and laid it saying "that's a good price to lay".
Then each time it drifted up to 2.0, the backers got back involved saying "that's a good price to back", and so it continues.
As these ranges can and do sometimes get broken, we must not see them as any kind of 'rule', just a suggestion of what is likely to happen. Trading is all about an 'edge'. An edge means more than 50/50 chance, so if you did the same thing over and over again, you'd end up more often green than red.
If it was guaranteed, it wouldn't be 'trading'. It is a trade because I am aligning my money with what is more likely (than not) to happen.
I plan for it to go wrong, I am ready to act the second it does go wrong. That's the losses taken care of and prepared for. Of course more often than not, it doesn't "go wrong" and the traded range helps to keep the price where I am hoping it stays, meanwhile I can bag a few ticks, often several times in a minute or two.
Trade The Range
So, in case you haven't worked it out already (if not, wake up!)....
I will lay a horse at the bottom of its traded range, and/or back it at the top.
The bumpers are your 'resistance', hence the stronger the definitions around the range, the stronger the bumpers.
Just bear in mind, they are not as reliable, they can sometimes jump out of the way once your ball approaches! But the analogy is a good one, as most of the time the price will 'bounce' from one side to the other.
Protecting Your Position
During the trade I will keep a close eye on the other ladders/runners, again looking for an early warning of any dangers to my position.
In a 'rangey' market, most or all of the other horses are also in a range of their own, the 'main players' that could have an impact on the favourite anyway.
If one horse, or worse still, two other horses break out of their previous traded range, it stands to reason that the favourite may now have an increased chance of breaking out of it's own range.
At this point, I am out, usually before it actually does so. This method has obviously limited profits, so it's key to keep the losses to a minimum even if it means missing out on a possible winning trade.
If I don't see an early warning and only notice when the horse I am trading breaks out of its range, I exit the trade immediately, usually for a loss of one or two ticks (three or four at the very most).
Trading software can give an automated exit or 'stop loss'. I don't always use it but I do sometimes, especially if the phone goes or some other distraction turns up (which I know it shouldn't!).
Some markets can stay within their ranges right up to the off, but I will usually expect at least one attempted breakout as they usually test their boundaries at some point.
Best Trading Window
With this method, the best trading period in my experience is between 15 and 5 minutes from the off, 2 minutes at the very latest.
When it gets closer than 5 minutes to the off I find more chance of range breakouts. If I am already in a range trade as 2 mins comes along I won't necessarily exit my trade, but I will move my stop loss closer to protect more green and reduce my exposure to a sudden last minute move.
It is possible to trade much earlier than this, especially on quieter racing days when there are bigger gaps between each race.
An Interesting (Unintended) Example
I had a look around on Youtube for a video which might show a rangey market nicely for those readers who have not looked at this stuff before.
Curiously, I couldn't find anything giving a clear demonstration of it, but the last video I clicked on was a Peter Webb (of Bet Angel fame) video entitled "How to read a racing market".
Don't view it as a way to learn 'how to read a market', it's not a nice market at all as you will see! But.... It's got some real value for us.
Here is a market which firstly looks tricky regardless of any significant things happening to make it even more tricky, and something did happen to do that, a horse was withdrawn.
In case you don't know already, when a horse is withdrawn the market has a major reshuffle to account for the change in odds across all runners. These are nasty races for beginners generally, you can almost throw all the early analysis out of the window!
But this video is perfect for showing here. Peter does well to get a green from this market in my view, I suspect he would agree it wasn't a great market to be trading and great respect should be given to him for publishing it. I suspect he could have chosen some much more boastful or impressive examples if he wanted to. Kudos.
Watch the video and then I will explain why I think it is so useful:
When I opened this video up and saw the first glimpse of the ladders, I very nearly closed the window as it looked to be of no use whatsoever in showing the type of rangey market I am discussing here. But for some reason I was intrigued enough to watch it through and I am glad I did.
Even in an erratic and volatile market which has just had a hand grenade thrown into it, look how quickly a range formed. Again, this is not a perfect example of a tight range but (loosely speaking) I would say it quickly became apparent that this horse had a range of 1.76 to 1.81 ish (once it had formed).
See 3:58 on the video to see the traded volume bars starting to 'paint' a nice range for your eye to see.
Watch it again, and count how many times it hit the end of the range and reversed.
So even though Peter Webb was looking for a breakout/trend to start happening (which is the opposite of what I am watching it for!) this video ended up being a prime example of range trading in my opinion. How many range trades could you have had in this market? Loadsovvem!
I am not saying you would have been right to do so, as I don't think this looks like a nice market to be range trading at all given the early action and the non-runner adjustment, but it demonstrates the movements so nicely I think it's an excellent, if unlikely example to help explain my point.
Since I watched it so closely, I may as well give you a breakdown of what my interpretation was of this market, at various different points:
00.05 (5 seconds into the vid) - The market looks like someone just threw a grenade into it, as Peter says himself. He now waits for things to settle down and get some clarity again.
00.36 - Some big backing takes place which finally starts to find a 'bottom' for this horse's price range.
01.21 - Big bet takes the market out of the bottom of the range for a split second, but the layers did their duty and jumped back in to keep the price above 1.76. What actually happened here is someone wanted to back a grand or whatever on this horse, and decided to back it down at 1.74 which hoovers up all the money in the queues above it first. Instantly those lay orders which were hoovered up were replaced with plenty more. So in effect this big back bet was an anomaly, it was a one off, and didn't indicate a break out of the range. If it had been followed by just one more similar bet, that would suggest to me the range has no bottom yet or isn't going to be a range at all.
01.24 - Look at the volume bars growing on the right of the ladder. Look at 1.75 and 1.76. Regardless of the back bet which has just gone through the market, it is clear that 1.75 didn't have a lot traded, and nearly 5 times as much has traded at 1.76. It also didn't spend more than a second or two at 1.75 before going back up a tick to 1.76 where it seems much more comfortable.
02.13 - He placed a similar bet to what I would have, laying at 1.77, but I would have probably waited for 1.76 as the volume bars on the right hand side clearly show the horse is good friends with the 1.76 price. Just after he enters, it dives one tick below his lay. He (wisely) gets out as for a split second it looked like a strong move down. If he had held one more tick, he would have stayed in for the subsequent return up the range. I would point out here that in no way am I criticising the master of Betfair racing trading (which is Peter Webb by the way). He is simply looking at (and for) different things to me on this ladder, and don't forget I have hindsight when he didn't. I am sure in his own hindsight (what a wonderful thing that is) he would have held that extra tick anyway. But remember, exiting is never a mistake, even when it is. If that makes sense, you are really tuned in now! Exiting takes more balls than entering, remember that when your ego is taking a bashing :). Don't "be brave and get in", "be brave and get out"!!!! Also note the big chunk of lay money thrown in at 1.76 just as he exits. This is further confirmation that serious money is resisting this price moving lower than 1.76.
03.04 - The price does similar to what it did at the bottom earlier. It hits 1.81 briefly and then money gets thrown in there to contain the price in the range below. The 2k or so backers money at 1.81 is then attacked by layers and it looks like it's going to go up through 1.81, but yet more money comes in to put paid to that idea. That was two clear challenges to breaking out of the top of the range, both failed.
03.50 - Again we arrive at 1.76 and you can clearly see the market saying "no chance" and turning it back upwards. There is even a solid effort from a spoofer at 1.77 which is laughed at by the genuine layers. If you are not aware, "spoof money" is money put there purely to influence other traders. It's been thrown in there to scare people and/or make the average novice traders panic into thinking this horse is going to come down in price. This will often cause the desired result as plonkers pile in under the 5k with their back bets "following the money". The only trouble with that is that they often "follow sweet fanny adams" as "the money" wasn't really there, it was just put there briefly to cause them to click then it disappears. Obviously this spoofer (maybe you're reading, if so, stop it! :--)) wanted to push the price of this horse down for one of many possible reasons, we don't care about those reasons. The money looked spoofish simply due to the sum being much bigger than most bets on the ladder, and it was confirmed as the spoofer pulled it out and ran for the hills when it came close to getting matched!
Spotting the spoof... 03.53 - Look carefully. The ladder shows over 5k 'wanting' to back at 1.77. The traded volume bar on the right shows 23.4k traded. Then the 5k disappears in the blink of an eye, but the traded volume doesn't go up accordingly, so it didn't get matched and is now safely back in his Betfair balance. In other words he bottled it and cancelled his order as it was never intended to actually get matched. Hence "spoof". If that 5k bet was matched by a layer, that would have added 10k to the traded volume bar at that price. Another way to spot a weak attempt at spoofing is to see where it sits on the ladder. If you see regular very large sums (in relation to the rest of the bets) landing one tick away from the current prices then you are probably seeing spoof bets trying to push the market (actually the other traders) around. A tick away from the action gives the spoofer a bit more time to cancel it. I would love to watch someone spend a day quickly matching all spoof bets, that would be fun!
04.24 - Peter gets so tired of waiting for a breakout and therefore a trend to form (which is his plan for this market) that he eventually decides to make a few ticks if he can while he waits. He orders a back bet at 1.8 to see if he can take a few ticks in the range. He then cancels it at 05.27 and instead lays as he again feels like the price could push through him and out of the range, i.e. that the breakout he is waiting for turns up. Yet again it doesn't happen and the backers turn up instead to resist the breakout. Watch the back money build up in seconds to over 2.5k at 1.8.
06.35 - Ok Peter, finally you got your wish!! Breakout time! Notice how hard it resisted the next attempt, but the layers finally overcame the backers and 1.82 is hit and surpassed. How many warnings did you see there? It did briefly break through, then the range boundary still dragged it back down briefly before losing for good the final time.
All of this action was the period when (IF you were trading this) you were getting signals that this range wasn't going to hold true for much longer, but even if you didn't spot the signals, who cares because you had ample time and chances to get out with a break even or a tick or two loss at the most.
Once 1.82 and 1.83 are showing clear volume growth, you know this range is no longer relevant. Watch it several times and you will actually start to feel the market forces pushing and pulling. No this isn't mystical BS, it's just learning to interpret what your eyes are seeing, and due to the speed at which you need to make these decisions, it becomes more of a feeling when actually trading.
After the fact, watching back on a video for example, it's easier to explain each specific thing but you can't do that when it's live in front of you, so this starts to become very intuitive. It has to really. You don't have anything like enough time to discuss all the pros and cons with yourself before clicking.
The rest of the video is not of much use, other than to show that this breakout was strongly resisted even after it broke, there was strong backers money just slowing down the drift until it finally lets rip and gets up over 1.9.
So again, not an example of a race I would be range trading, and not an example of a good tight range. But nevertheless it's very useful to show that even in markets I wouldn't touch, ranges still have real power once they have clearly formed.
It is a very useful first step to learn, to be able to open up a market and determine if it's a trending market or a ranging one (or neither/can't tell). In this example, I would definitely not have believed it was a ranging one from early analysis. I want to see much clearer traded volume bands than this race showed. But as I watched, it became clear that there was an obvious range going on there, and it was evidently tradeable even if I wouldn't have done so.
I can not (and would not) criticise Peter Webb when it comes to trading. But if this was a video from my brother in law asking me for comments, just to be totally transparent here, I would probably have told him he was too fixated on "finding" the breakout he was so sure was coming, that he overlooked what the market was actually doing in front of his eyes. He hampered his own market-reading abilities, by being too fixated on one 'expectation'.
Peter Webb knows far too much to accuse him of that, he was probably recording it to try and show that very thing he was hoping to find, and he was clearly spot on in waiting and planning for the move he wanted to trade. But for someone inexperienced who wouldn't have known that was coming, this would have been a mistake to ignore so many obvious green ticks while waiting for 'the big move'.
Scalping Pre-Race Markets
I could write a book on this subject alone, and it's perhaps my favourite trading strategy of all, at least as far as pure enjoyment goes anyway!
The reason I mention it here is simply because ranging markets make the ideal learning ground for scalping.
Scalping is another often mis-used term. In my mind the 'pure' definition of scalping is the process of taking just one tick out of a market, with extremely low risk or practically no risk at all if possible. (And it is, if you know how!)
In a very stable market, where sudden moves are rare or highly unlikely, you can often 'pinch a tick' over and over (and over and over) again. That's honestly why I love it so much, because it can feel very much like a cash machine, albeit with very small sums, but they can mount up fast especially with bigger stakes.
I won't go into the complex how-to's of scalping here as it's covered extensively in my ebook and I will soon be publishing a full page article about it. *
Practice Makes (Almost) Perfect
Trying to watch, learn, and have money at risk all at the same time is a surefire way to fail. You will be shaken out of trading in no time.
If you want to learn racing trading you start by watching, trading comes later when you feel so sure you have sussed what's going on that you just can't NOT be involved in the next move you see coming. That's how you know you're ready to risk your hard-earned money in these interesting but challenging markets.
You will quickly learn what a ranging market is versus a trending one. Trending ones move faster and are more volatile, so they usually take longer to learn to trade.
Also, the risks are greater in trending markets as a trend can reverse as fast (or faster) than it went, and if you haven't mastered the art of spotting why and when it's likely to happen, you will get a nice juicy green which turns into an equally juicy red in what feels like the blink of an eye.
Trend reversals are actually another method I use which I haven't explained here as I feel it would only confuse the issue. After a year of trading trends and ranges, you might be somewhere near ready to start trading reversals! Another year and you might be able to trade a trend, and then the subsequent reversal tacked onto the end, meanwhile trading a tight range on the 3rd favourite!!
The nicest part of range trading is the stop loss issue. When trading a trend, you have to constantly move your stop loss to protect some green. Well, you don't "have to", but you should. Why make green if you are not securing some along the way?
Range trading is different. In the example of a favourite trading between 1.94 and 2.0, if you lay it at 1.94 or 1.95 (both are acceptable to me) then you have a planned green exit (1.99 or 2.0), and a planned red exit (very important for reducing stress) which would be 1.93 or 1.92. This simplifies things a lot and it can really make the whole experience feel much more controlled and "easy", if I dare to use that awful word, no part of racing trading is "easy", especially pre-race trading.
One other nice thing about range trading is the dilemma of when to make your entry. This dilemma is a constant one with trend trading but when you're trading within a range, you don't much care for where the price is between the range limits.
You can just drop in two orders, a lay order down the bottom and a back order up the top. Now you sit back, absorb the commentary and watch what all the ladders are doing, nice and relaxed.
You then wait for an order to get taken as the price nudges up or down it's range. When one of the orders is taken, you now switch on a bit and basically defend yourself against the risks. Is the live feed showing your horse messing the jockey around, rearing up on its way to the stalls, sweating and snorting like it's about to keel over, getting a bad rap from the talking heads etc?
If so, you now know the range may be under threat.
Are the other horses staying in their range? Are any other horses playing up?
Remember the see-saw analogy..... if a horse kicks his jockey off and then goes for a jolly jaunt the wrong way round the track closely followed by his trainer, jockey, and course staff, that horse's ladder is almost certainly going to break out of its range, and that will almost certainly affect your range trade on a competing runner.
Assuming all looks good, you just wait until your horse moves to the other end of his range, and you bank your green with a satisfying click, and often get back in for the return journey to the other end!
P.S. If you found this article useful, please say thanks by sharing it...
Frequently Asked Questions
Is Pre-Race Trading easy?
How long does it take to learn to trade before the off?
In my case, a long time! But since producing my PR trading course for my readers, I have seen it could have been done in much less time, maybe as little as 6 months.
Which software is best for PR?
Software is essential for trading pre-race and my preferred program is Bet Angel, but I have a detailed review of all trading software options, all of them are perfectly usable.