There are two types of people that this appeals to, firstly the traders who are used to other more traditional markets such as Forex, Commodities, Stocks and so on.
But what I find more interesting is the second group of people, the sports fans themselves, who are learning how their enjoyment of sport can actually become a way to earn a living.
And what better way to earn money than to spend your day watching your favourite sports?!
What is Sports Trading?
Sports trading is the process of exchanging bets on sporting events via a betting exchange in order to produce a guaranteed profit, regardless of who wins.
That’s the shortest definition I can think of. This article will go much deeper to give you a full understanding of how it works and how to become a sports trader yourself.
If you’re completely new to this subject, please make sure you have read my Betfair Trading beginner's guide which explains the concepts and mechanics behind sports betting exchanges, what they are and how they work, as well as what a basic trade looks like before applying that knowledge to any specific sport. I also have a free ebook for those considering trading for a living.
So You Want To Be A Sports Trader?
If you have illusions of it being a walk in the park, forget that idea right now. Like anything truly worthwhile, it takes effort, patience, determination, and a good deal of practice to become a successful sport trader.
That’s not to say you can’t do it, it’s very likely you can, but you won’t if you don’t approach it as seriously as any business venture or new career you decide to undertake, because that’s exactly what it is. This is no game. This is strictly business.
When I tell people I trade sports, I’m usually met with either a confused expression, or one of extreme curiosity. “What is a sport trader?” is the most common question I get. The second most common is “So you mean you’re a gambler, you bet on sports?!”. That one niggles me a bit, especially after all these years! So let’s start by talking about why trading is not gambling.
Sports Trading vs Betting: The Differences
There are many things which differentiate the two, but if I had to pick only one it would be the lack of emotional attachment to the outcome.
When you’re betting on sports, you’re basically taking a gamble on the outcome based on gut feeling or, more often, plain loyalty to a particular player, team, or horse.
Whilst this can certainly be fun, some of the most fun I have ever had was in casinos until 4am! But that's leisure, it sure ain't 'business'. There is a thick black line between the two, and as a full time sports trader, you must keep that line firmly in mind.
Some sports bettors gamble on sports in a 'more business-like' way with the aid of statistics, form cards, historical results etc. That’s a ‘little’ closer to trading, but it’s still outright betting.
Of course there are also 'professional gamblers' who are doing what any other gambler would do, but with a much more serious and business-minded approach. They take risks on outright bets but do so based on calculations of risk v reward. They study statistics and form closely, and they have to hit a certain strike rate (success rate of bets) in order to be profitable. Even if some (very few) turn this into a genuine business or reliable full time income, they are still gamblers.
None of these are what I’d call sports traders. The trading element comes in when an exit strategy is introduced. So as well as a back bet, there’s a lay bet being placed at the same time, or planned for later in order to exit the position when they reach favourable circumstances (and prices) in the market.
That’s the beginnings of trading, when there are two bets planned, not just one. The profitability comes from getting those entries and exits right, offering profit on the difference between their prices (odds).
Benefits of Sports Trading vs Betting
Trading has many advantages over betting. The profit potential is perhaps the biggest. I have known some professional gamblers, and I have of course known more than a few professional sports traders. I am in no doubt that trading is both far easier, and far more lucrative, than sports betting.
When trading, you have an exit strategy. You can use stop losses to limit your potential risks. You can also use charts, live video streams, and technical indicators like support and resistance to inform and guide both your entries and your exit decisions.
When betting you are basically leaving all the risk on the table until the event has ended.
If you bet on a team to win a football match, and they don’t, you lose. Simple as that.
If you’re trading that same event, perhaps with the same intent in mind (i.e. that your chosen team is likely to win), you can back it just as a gambler might do, but then you can monitor the action, study the markets and price movements, and get out of your position whenever you feel like it.
A good example is the football lay the draw method. This is a sports trading technique usually employed in games where the home team is likely to win, which of course means to score more goals!
You could, if you were just looking to bet, back that home team to win. Then you sit back and bite your nails until you find out if you were right or not. Not my idea of a fun afternoon, and certainly not my idea of a successful and professional business!
Instead, if you lay the draw in the same game, you can look at stats to see when they score most of their first goals, and you can trade that position around that time. If it doesn’t work out you can exit for a much smaller loss than the gambler risks suffering.
Conversely, if they score as expected, you close out and walk away from the game, not caring who wins as you’re profit is already banked and you’re on your way to the pub to boast about it!
As you can probably tell, trading sports beats the hell out of betting on them in my opinion! And I sure have plenty of experience with both to be able to judge!
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Sports Trading & Spread Betting: Similarities
In case you have any experience with the latter, it can be helpful to know that these two things are very similar indeed. As my regular readers know I have been involved with spread betting in the past.
The only real difference is the underlying market or event. In spread betting it’s currencies, stocks, commodities etc. Whereas a sports exchange trader does practically the exact same things, but only in sports betting markets.
The similarities are too numerous to mention, from the use of charts to the discipline and psychological control needed.
Many spread bettors try their hand at sports trading, and vice versa. I came from a spread betting (stocks) background, as the switch to sports was almost painless. I just had to learn the new market forces causing the prices to change, which is of course a bit different with sports than it is with currencies or Tesco shares!
Trading in any market is, at it's most basic level at least, just a matter of entry price and exit price. That's what determines success and failure anyway, getting those right.
How Sports Trading Works
I have another article explaining the mechanics of a trade, so all I need to cover here is how it applies when trading in sports markets.
Due to the variation between the different types of sports trade, the mechanics can vary a little too, whilst the underlying principles remain the same.
I cover the specifics of each strategy in detail on their relevant pages on the site, but generally speaking all trades will consist of these four steps:
Do your research
This will usually mean looking at stats, form, historic results etc.
For football it would be past game history, number of goals scored vs conceded, and so on.
For horse racing this might mean looking up a horse’s track record, speed ratings, jockeys, race lengths and types (jumps or flat), weather and ground firmness etc.
Choose your entry point/time
In some cases this will be a specific price (odds). You may decide ‘If this shortens below 2.0 I am backing it’, or ‘If this drifts over 3.0 I am laying it’.
In other cases it will be a time or event in the match, such as ‘If nobody scores by 20 minutes into the game, I am laying the draw’, or ‘If they go 2-0 down before half time I am backing them’.
Choose your profitable exit target
This could be a price (odds) or a monetary target, such as ‘I am exiting if it reaches 2.4 or if I can green £200’.
Other times it will be related to the events in the sports fixture itself, such as ‘If they go two goals up I will take my profit and close the trade’, or ‘If this runner goes ahead by 10 lengths I am exiting my back trade'.
Choose a stop loss or worst case exit criteria
This is crucial to protect your trading bank.
Always have this decision made before you enter the trade if at all possible. Some methods don't allow that but most do.
It could be odds-based ‘If it breaks below 1.8 I am out to cut my losses’, or it might be ‘When the game reaches 80 minutes I am out’.
As you can see these will vary between sports markets due to the nature of the event in question, but they are all vital in their own way. Skipping or forgetting any of them is the fastest way to harm your chances of success as a sports trader.
How To Get Started Trading On Sports
There isn’t a lot of ‘stuff’ needed to get started with sports trading, but there are a few essentials.
By far the biggest requirement is a solid strategy, which I will get to shortly. After that comes a whole lot of determination and practice!
Aside from those, here are some important things you’ll need:
You can start without it but if you’re serious about becoming a full-time sports trader you really will need to use software.
This subject is covered in much more detail on my Betfair software review page. Suffice to say, there are some major advantages to trading with dedicated software.
It may sound obvious, but many people suffer with unreliable equipment or, more often, an unreliable internet connection.
Getting your hardware running well before you start is a great tip and could save some costly losses as any experienced sports trader can attest to, me included!
You don’t need a huge amount of bandwidth for trading but at least a 2MBPS is a good speed to have, more is always better, especially if you will be watching live video feeds as they will drastically drain your bandwidth.
If possible, get a Fibre deal for super fast internet, its extremely stable and lightning fast.
I also advise people to avoid Wi-Fi at all costs for your main trading machine. Come on, you’re not a teenybopper watching TikTok, you’re conducting business here!
Plug your machine in with a good old fashioned (new if poss) ethernet cable. They cost next to nothing.
Experience taught me this one, and I have never had a single problem since using ethernet cables only. I don’t even have wifi running just to avoid confusion, some machines switch over to WiFi without you asking them to, and it can take an hour to realise things are going slower and catch the mistake, again experience talking here!
Backup Device: Tablet or Phone
This is a vital safety net. Don't ignore this advice.
As you hopefully never find out, Murphy’s Law states quite clearly that it will fail at some point! Your machine could hang, get a virus, have a power cut or hard drive meltdown....
Having a tablet or even just a smart phone, ideally connected to cellular data rather than your home wifi, means you have two safeguards:
Firstly you’re protected against a power cut, and secondly you have a separate connection to the internet. You’ll hopefully never need it, but if you do, you will thank me for this tip!
I don’t need to explain how important knowledge is when trading. But bear in mind we’re not just talking about knowledge of your chosen trading strategy. There are several types of knowledge you need:
You need some understanding of the sport you’re trading.
No, you do not need to be an expert, far from it. But you do at least need to know the rules, the time periods, the scoring requirements and so on.
It may sound obvious, but I have known people start trying to trade football before they knew that substitutes are usually brought on near the end of a game, or trading the horse racing markets for a good while before finding out about (and falling foul of) the dreaded Rule 4 issue!
It’s your job to at least have a basic understanding of how your chosen sport works.
This is not the same as knowledge of the sport above. This is knowledge of the market, which means how the money changes hands, how fast bets flow in and out, and above all: What influences the prices or causes them to rise or fall.
You will find plenty of information on this in my strategy pages as I explain all the market forces in each sports market I trade. You must know what causes horses to shorten or drift, or what causes a football team’s odds to go up and down, both before and during the game.
Another one which sounds obvious but so many people fall foul of their own trading software by not reading the instructions and getting fully confident with all the buttons and options etc, and I mean before starting to trade with it!
Again, this is a business. You’re using the software to put your money at risk! You must know how it works, how to set it up, how to get out of trades and pull up charts etc.
Before trading with any software program, read the instructions from cover to cover, and then watch at least a few youtube tutorials showing people using the same software to trade the sports exchange. Your software program will become your best friend and you will be using it for hours each day, every single day.
Minimum Capital Required To Trade Sports
This is a very personal decision which you must make for yourself, but the golden rule, especially for a beginner, is:
Never risk more than you can afford to lose.
Choose Your Bank Size Defensively
Managing risk is a huge part of trading, and the first step in doing so is choosing a sensible and minimal sum of money to use as your trading bank.
As a novice trader you could lose your entire bank with a misplaced click or a silly 'fat-finger' mistake. If you followed the rules above you shouldn’t do that but it can happen, and since you don’t need huge sums of money to learn how to trade sports, why risk any more than necessary?
Therefore my advice is usually (and again only IF you can afford to lose it) to put £200-£500 in your sports trading account at the start. A large loss hurts, and can really damage progress due to the psychological issues it causes (fear, anger etc). So keep your stakes and therefore your bank to an absolute minimum, just enough to learn with.
You can always add to your bank, but you can’t get back what you lose, and the early days are when most sports traders make silly mistakes especially while they are fairly new to the pace of things.
Be Fiercely Protective of Your Bank
Your bank size and your stakes (trading position sizes) are directly related.
Your stake size is actually a function of your bank size and should always be calculated as a percentage of your total trading bank (which will fluctuate). Bear in mind that you can trade with just £2 stakes (minimum), so do that to begin with! Why take any more risk while learning?
Leave bigger banks (and thefore stakes) for later, just focus on growth for now. I don't care if it grows by tuppence per day! That is growth! And consistent growth of any size is all you are aiming to achieve for now.
Read more about Bank Management.
Choosing A Sport To Trade
This is obviously a personal decision but for most beginners I would recommend choosing based on two criteria:
1. Do you have a favourite sport?
If you have any knowledge, experience, or just pure enjoyment for one sport over another, particularly between tennis, football and horse racing, it would be wise to choose one you do have an interest in.
There’s no point making your beginner trading sessions harder than they need to be by trading a sport you hate! If you don’t have any preference, move to the lifestyle choice below.
2. What times suit you?
Do you have time during the day to spend learning to trade, or would evenings suit you better?
Football is generally traded in the evening, whereas horse racing is more a daytime adventure! However there is certainly some crossover, and of course tennis is another consideration.
If you don’t have a preferred sport then pick the one you’ll find easiest to fit into your lifestyle and work schedule.
Best Strategies For Beginner Traders
There are many methods to choose from. Whilst the hardest and most lucrative is probably trading horses pre-race, I always urge people to try their hand with something easier first as the pre-race markets can be tricky to master, especially for a novice trader.
Some of my favourite picks for beginner-friendly sports trading methods are below:
This can be a nice gentle way to introduce yourself to the markets, and it can be done for any sports event.
You're basically trying to 'steal a tick' here and there in the 'pre-market', before the game/event goes live or 'in-play'. This reduces the pace of things, and thus the risks are lower. It's like a nursery slope to get your baby steps under your belt.
Some find it really easy, some struggle, but as you're only going for small but frequent wins, you don't take big risks and thus the losses can be limited. It's also ideal for those on minimum stakes as you can get your £2 stakes matched in every single sports event known to man, or at least known to me anyway!
* I will soon publish a detailed article all about scalping - subscribe for updates to get an email when it goes live.
It’s certainly a beginner-friendly method compared to most others, but don’t let that fool you into thinking it’s only for beginners.
There are many sports traders who make a full time living with football trading and lay the draw is often the main course of their trading strategy menu!
In Play Horse Racing
This is an excellent strategy for learner traders, for one specific reason: You only ever Back a horse to open the trade, and the stakes needed are small compared to most other methods.
This means if you have a silly mistake or forget (or refuse!) to close your trade, you can only lose that one stake you entered before the race. Ok it's great to do that, but it's not a big loss and means you don't get the emotional turbulence caused by bigger losses with other methods.
This can also be an extremely profitable strategy, with minimal learning time or practice needed. That makes it almost unique, as there are few methods which don't take months to master.
Is Your Head Screwed On Tight?!
Psychology is an extremely important topic in any type of trading environment. Sports trading is no different, and in some ways psychology can play an even bigger role here.
It's also a very solitary pursuit, so you need to take special care of yourself mentally simply because nobody else can.
One of the easiest ways to keep a lid on this stuff is to avoid any emotional attachment to your trades. So if for example you decide to trade football, and let’s say you’re a die hard Chelsea fan, it’s a good idea to avoid trading any Chelsea games.
But the subject goes way deeper than your support for a team. Trading really can break people emotionally. Not always, but often enough for trading psychology to be worth a serious look by any budding sports trader.
When you're trading in any fast-paced environment, your biggest enemy is always yourself.
Your own emotions, especially greed and fear, can quickly kill any success you find. You need a good grip on these, and there are some excellent books about the subject that I would strongly suggest you take time to read before diving into the sports betting exchanges.
* These will be listed in a forthcoming article on 'trading psychology for sports traders', and I’d urge you to read that carefully, whether you’re a beginner or not. (Subscribe to get notified of new content.)
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How much money do you need to start trading?
£200 is the minimum bank size for learning to trade sports. This lets you use Betfair minimum stakes (£2) while only risking 1% of your bank per trade, a safe and healthy approach for any beginner.
Can you make a full time income as a sports trader?
Yes, absolutely. But be prepared for a long, challenging and hopefully enjoyable journey of learning, and not just about the markets, about yourself and your personality too.
Do you have to be a sports fan?
No, it’s better if you’re not as don't have emotions to worry about. It’s just a market like a Crude Oil market is to an oil trader, he doesn’t care about oil, he just cares about its price moves!
What are the most common mistakes sports traders make?
It took me a long time to get a grip not just of the markets but of my own proclivity to make mistakes, and to control my emotions and stress which are the biggest causes of mistakes for traders.
I will soon have an article detailing the most common errors made by sports traders. It will cover this subject in detail, including mistakes made both by beginner traders as well as experienced ones. It will also explains how to avoid making them, hopefully before it destroys your bank!
Many of my regular readers have learned over the past decade or so that I wasn't a 'born sports trader' by any means! I have not just made every mistake in the book, I have done so more times than most. I am, in short, particularly hard-headed!
How long does it take to become a sports trader?
Some people master it in 3-6 months, but most people need at least 6-12 months to become confident in making money consistently. In some cases, especially in complex markets, it can take 2-3 years.
I did say you may have a long road ahead, and whilst I hope you don't, if you're not committed to doing whatever it takes, you may never achieve success. Full commitment is required, and for those, some degree of success will usually be realised within a matter of months, after that it becomes a case of growing the bank to a size where the stakes are big enough to earn a good daily/weekly income.
Why not just gamble instead of trade sports?
Because unless you have insider information it’s a lot harder to make consistent profits as a gambler than as a trader.
It’s also a totally different mindset and outlook, and not one I like very much if I'm honest. I lived that life for more than a few years, my life generally went downhill, my decision making became poorer over time, and I mean life decisions not gambling ones.
Taking risks day in, day out, is also something that can harm your health and mental wellbeing over time. I wouldn’t recommend it.
Sports trading on the other hand, this is something you can have a very ‘normal’ and healthy lifestyle with, one that fits around family life and generally is a nicer one to live than a gambler’s often grotty existence!
What is the sports trading life like?
Great! Certainly compared to the normal 'job life'. Of course it's not without it’s bumps and obstacles, what worthwhile pursuit in life doesn’t come with some of those?
My advice is to try to make it as similar to any average day-job lifestyle as possible, rather than trying to make it different just to celebrate not having to go to that job any more.
I made that mistake, I thought I was 'free' before I was, I celebrated too early, and I had to go back to the drawing board when the markets taught me I hadn't quite mastered them yet at all!
If you commit to being sat down at 10 am, be there at 10 am!
If you commit to refusing to accept any more losses than £100 on a trade, don’t ever let it slip to £101.
Discipline is everything, not just in trading but in the general lifestyle which makes for a successful trader.
Self-discipline is hard, harder for some (me!) than others. So start as you mean to go on, take it seriously and professionally at all times, and sooner rather than later you could be enjoying the sports trading life yourself!
Just remember that this is work, it isn’t an excuse not to! It’s your job, albeit with a lot more time off and no motorway queues to contend with! 🙂