When trading on Betfair, there is a danger of running up significant losses if results go against you. Without taking careful steps to protect your downside risk, this can be quite damaging to both your trading bank and morale.
Ideally what we want to do when trading is to focus on low-risk trading strategies. That means our downside risk is minimised whilst we still have potential upside if the trade goes our way.
Of course it is easier said than done in most cases! It takes a smart strategy and the correct setup to create genuinely low-risk opportunities.
Sometimes a trading strategy can look low-risk on the face of it, but when you break it down, it can still blow up in your face and do severe damage to your trading bank.
So we want to be sure that the strategies we use actually are low-risk in practice and don’t expose us to unexpected losses. We will go through some examples of these strategies below so you can see for yourself how they work.
Not so Low Risk Strategy – Scalping
An example of a strategy that appears low risk at first, but can in fact be high risk is scalping.
Originating from financial trading, the term scalping refers to taking just a small number of ticks profit on slight fluctuations in prices. Often this can mean taking a profit from just one or two ticks movement in price.
Transferred to sports trading, the same principles apply. The aim of scalping is to get in and out of the markets quickly, taking a couple of ticks here and there and repeating it over and over, to build up profits gradually.
One market in which scalping is popular is the over/under 2.5 goals market in football. This market tends to move sharply downwards during a game if no goals are scored, allowing a profit to be made in a minute or less.
In theory, it can appear to be quite an attractive option. If not much is happening in a game and few chances are being created, the odds can move down quite quickly and a nice little profit can be secured. If there is an injury break it can be even easier to scalp a few ticks profit.
If a goal is scored during the brief period when you are trying to scalp, the trade will become a losing one. In itself, that is not really a problem. A good scalping trade can still be a profitable one, even taking into the account the risk of a goal being scored.
Let’s say for example that the under 2.5 goals is 2.0 in a match.
It might only take a minute for it to hit 1.97, leading to a profit of £1.50 from a £100 stake.
If there was a goal, the odds would be likely to jump to around 4.0, leading to a loss of approximately -£50.
The chances of a goal being scored in one minute are normally very low however – around 1-2% in most games (unless it happens to be very attacking).
So the trade is in itself a profitable setup – producing a profit of around 3% of the liability (£1.50 profit from a £50 liability) if a goal isn’t scored, but there being a probability of only 1-2% of a goal being scored.
However, the wrinkle in this strategy comes when a second goal comes very quickly – too quickly for you to trade out.
In this scenario, the loss would be much greater as the odds for under 2.5 goals would spike to around 10.
This would make it questionable as to whether the trade was worth taking with a loss of around 80% of the stake.
Although it doesn’t happen very often, two goals in quick succession does happen sometimes – more often than you might think.
The other risk with the trade is that sometimes the odds get “stuck” and don’t move downwards at all for a good 2 or 3 minutes. This could be because the game is in an attacking phase, but sometimes is just the random movements of the market. It can be frustrating when this happens and there isn’t a lot you can do about it when scalping – it is just part of the process.
In any event. this is an example of a Betfair trading strategy that on the face of it is low risk, but in practice can be higher risk than it seems and lead to bigger than expected losses.
If you are looking for profitable football trading strategies, together with stats and guidance from professional traders, we would recommend checking out the award-winning Goal Profits here which has been fully reviewed and received a passed rating here at HBR.
Lay the Draw (low risk and high risk approaches)
In a similar vein is the popular lay the draw strategy. There are many ways you can play the lay the draw trade, with different approaches having varying risk levels.
The most basic lay the draw trade carries quite a lot of risk and is best approached with caution.
In this setup, we just lay the draw at the outset of the game and wait for there to be a goal. So if we take the example below of Juventus v Lazio, we could lay the draw at 3.55 before the start of the game.
Then we would hope there is a goal in the game. If there is, we should see the draw odds move to at least 4.0, giving us a profitable trade with a profit of around £1 from a lay stake of £10 (or a liability of £25.50).
In the event there was a goal for Juventus after 44 minutes which gave a clear profit on the trade.
Lay the draw traders look for lots of these small wins to add up and produce steady bank growth.
However, the risk with this setup is that if there is no goal, you risk losing your entire stake.
Some traders therefore like to mitigate this risk by either trading out if there is no goal by around 65 minutes in the game, or backing the 0-0 scoreline to cover the liability on the goalless draw.
Both of those approaches are valid and give us a trading strategy with much lower risk, but at the same time reduce the potential profit should the trade go right.
It is also worth bearing in mind that much like the scalping strategy described above, two quick goals being scored before you can trade out can be very damaging.
For example, there may be no goal until very late into a match, with the deadlock finally being broken in the last 10 minutes. This would give the opportunity for a very profitable trade, with the odds on the draw soaring.
However, if there is an equalizer before you have had the chance to trade out, it could leave you staring at a large loss.
Even trading out earlier in the game at 65 minutes has the risk of this happening, although at least in that case the loss would be smaller than it happening right at the end of the game.
At the same time, if there was another quick goal before you could trade out it could go 2-0 rather than 1-1, thus landing a very healthy profit.
Either way though, it is worth thinking about how you set up a lay the draw trade and how much liability you have if the game went 1-1 before you had the chance to trade out.
Some traders like to only lay the draw in the first half so it is not too damaging if that scenario does happen.
Overall then, lay the draw can work well as a low risk trading strategy if set up correctly – although it is tough to entirely eliminate risk from the trade.
Tennis – the Double-Break Strategy
A low risk trading strategy that can work very well is the double-break strategy in tennis. This works best in women’s matches where breaks of serve are more common than in the men’s game.
Essentially what you are looking for is a situation where a player goes a double break of serve up in a set. So that could be 3-0, 4-0, or 4-1 for example depending on who has served first.
At that stage, the market will presume that the set is effectively over. However, contrary to what you might think, it is actually a good time to lay the player who is ahead.
Let’s say a player starts a match at 1.90 and goes a double-break up in the first set at 3-0. At that stage, their odds may well fall to around 1.30. The presumption, as we say, is that they already have the set locked up.
However, in women’s matches in particular, there is actually a reasonable chance of a break back in the set. For an average server on the WTA Tour who is a double break up, there is an almost 50% chance they will be broken back at least once in the set and around a 15% chance they will lose the double break.
Those are much higher numbers than most people would expect and mean you could make good profit from laying the player who is a double break up at 1.30.
If they go on to be broken back once, those odds could easily shift to around 1.50-1.60, giving you a nice profit if you wanted to cash out at that stage.
Or you could wait to see if they lose the double break entirely, which would see their odds return back close to the 1.90 they were originally.
Alternatively you might choose something between the two, perhaps trading out half your position after one break back and waiting to see if they can get the double break back before trading the rest out.
The beauty of this trade is that even if the player goes on to win the set without dropping serve, their odds won’t move much. Often the odds will still be around 1.30 at the end of the set, give or take a tick or two. Sometimes they are even above 1.30, meaning you profit anyway!
So it’s a very low risk trade with considerable upside – and at least one break back happens more often than most people realise.
If you are looking for more tennis trading strategies like this, we would recommend checking out Tennis Profits which is a complete trading package including stats, analysis and live trading by a professional trader.
Golf – The Short-Term Strategy
Another relatively low-risk trading strategy comes in the golf markets and revolves around short term trades based on the in-play action.
This can be as short as trading over a hole a player plays or even just a shot they take. In essence it is about anticipating probabilities and how odds are likely to move based on what a player does.
For example, a very simple trade would be to back a player before they are about to play an easy par 5 and lay them when they have finished it. Hopefully they will have birdied – and even eagled – it giving you a nice profit on your trade.
The chances of a player making a birdie on a straightforward, reachable par 5 is pretty high these days, particularly if that player is in good form and driving the ball well. If they don’t make a birdie, the odds may only drift slightly, versus a bigger steam in if they make a birdie or eagle.
Another example could be a player who is about to take a 20 foot putt for birdie. The market normally presumes they won’t make the putt, so in most instances there won’t be much of a move either way if the player two putts for a par, which is what will happen on most occasions.
However, if the player does make a birdie then their odds will get a nice move in, allowing you to secure a profit from backing them before they putt and trading out afterwards.
This can work in reverse too for when a player faces a tough shot. There was a particular instance a couple of years ago at a European Tour event at the Le Golf National in France.
At a tough par 3 over water, the wind was up and making it treacherous for the players. One after another they were stepping up and hitting it into the water or the high rough around the green, making bogey, double bogey or worse.
It was a great opportunity to lay players before they teed off and back them after they had finished the hole. Making a par wouldn’t push their odds in dramatically as they wouldn’t actually be moving up the leaderboard, but after a disaster on the hole their odds could easily double or more.
There are many chances to trade golf events in this fashion. It takes some practice to get a feel for when is best to trade and to know which players present the best opportunities. Good putters like Phil Mickelson in his prime or Jordan Spieth can be the best choices for the 20 foot putt strategy for example.
It is also best to use this strategy on favourites (or those towards the top of the market) where there is decent liquidity and towards the end of a tournament (rounds 3 & 4) rather than at the beginning, so there are clear odds movements.
With some practice it can work very well though and for low risk can produce some very decent returns.