Reading sports markets are very tricky, especially when you are starting out but thankfully over time, it can be achieved. Throughout this blog post, I hope I can outline the basics of reading sports markets so you can improve your trading and find an edge.
First of all, let’s go right back to basics and try to understand what a sports market is.
You see, a sports market is just like any other money market, whether that is a stock market, the housing market, heck even the price of oranges.
It’s all about how much money is in the market and how much is on either side of it. As a bookmaker or sports exchange, they would call this their “book”.
They will try to level their book out so they mitigate the losses.
So if there is £1000 on one side of the book they also want £1000 on the other side so they do not lose.
Let’s take a look at the housing market, house prices have been going up for the last few years. So, if you bought a house in 2000 and then sold it in 2020 you would have made a healthy return.
Of course, you would need a place to live afterwards but that is essentially the concept of a sports trade.
Just imagine the house market move we just talked about over 20 years and apply it to a sports market.
Now, let’s say the sports market is a horse race. So, instead of 20 years you have about 5 minutes to make your decisions.
Your job as a sports trader is to is to find market moves from horses (not houses).
So, each horse is a house and instead of the 20-year housing market, you have the length of the race.
Well, not strictly true as you can place your trades well in advance of the start of the race.
But you get the idea hopefully by now.
This way of thinking can be applied to any market in any sport on an exchange.
Just as an example, you can apply this to horse racing, whether you think a horse is going to win or lose, or neither, maybe just move a little in the market.
You can also apply it to football, whether a goal will be scored at a certain time, whether a team will win, lose, or draw plus many more.
There are a whole host of sports markets you can trade, thousands daily in fact.
But for the purpose of this blog post, we are going to talk about horse racing.
You see, on any given day of the week, there can be as many as 50 races in a single day in the UK, more on the weekends and big meetings.
So, you have plenty of opportunities to spot a market mover in the form of a horse that will drift or surge in price. What I mean by that is a horse that will either have a price that will increase (drift) or a price that will shorten (surge).
Now this is where you come in.
You have to position yourself in between this movement. If you do that you will make money.
Let’s take a simple trade example.
At 10am on the day of the race a horse is priced up a 4.1 odds to win the 14:30 at Ludlow.
But you are noticing more and more money coming in for the horse, the papers are writing positive things about this horse, Timeform has it down as a well in-form horse with the stable performing well, then maybe the TV coverage begins and they are also singing its praises.
This is when you need to jump on and place your trade.
Remember you are not betting here, you are never going to risk your whole stake. You are simply jumping on the excitement and backing from the punters and maybe even the bookies hedging their books.
So, let’s say you place a £100 back bet at 10 AM at 4.1 after you see this news and see the money coming in for it.
Then by 11am its price has dropped to 3.4 due to all the action and betting based on the reports.
Here is what you could have done.
If you have backed the horse at 4.1 for £100 and laid it off (bet on it to lose) at 3.4 for £120.59 you would have won £20.58.
Now the best part of this is you are done now. You do not need to wait until 14:30 when the race starts or even watch it. You can take your money out of the market and move on to the next opportunity.
How To Read The Markets To Spot These Opportunities?
With horse race markets it is possible to spot trends in the markets early on. You can take a look at where the money is going and literally watch the price shorten or go out.
If the market is moving in a downward trend like the horse below (this is both pre-race and in-play prices) then you can back it and lay it at a lower price which will lock in your profit and guarantee you a win no matter what.
When I say “win” I mean you win money, your horse doesn’t need to win.
It’s the same in the opposite direction, if you see market with a horse which is not being backed and is indeed drifting in price then you can lay the horse and then back it for a much higher price later on.
Be a bit careful here though as laying a horse requires you to cover the full liability for that particular trade.
Don’t worry too much, the risk is still the same really as you will not let it go much lower if indeed it moves the other way.
One of the great ways to get a small edge on football matches is to trade as soon as the team news is out.
If a team puts out a weak side, or if a player was injured in training the day before and wont play this can have a huge effect on the price of a team to win.
Take this recent match between Shakthar vs Real Madrid:
On the night before Real Madrid announced that one of their star players would miss the game.
This meant that the underdogs Shakthar’s price to win started to come in a little. On the evening before the game they were around 8.5.
By the morning after, that news had done the rounds across the various sports media networks it was clear people were placing bets on the Shakthar to win.
Their price had come in to 7.0. So, a simple back bet of £50 at 8.5 and then a lay bet at 7.0 would have guaranteed a profit of around £11 before a ball was even kicked.
So, to recap then. Reading the team news is massive when it comes to price swings. In fact, it was so crucial in this game as Shakthar even went on to win the match!
I hope this little guide has opened your eyes to the possibilities of sports trading and how to read markets.
You really can gain an edge if you strike early on occasions. If you want to take your horse racing to another level then check out System 89p which is mainly a gambling system. However, you can simply apply the strategy to sports trading which will make it much less of a gamble and more of an investment.