What should you do when odds fluctuate wildly ?

For this article, I am assuming that there are no injury concerns to either player.

One of the fundamental lessons for anyone who gets into Betfair Tennis Trading is ‘adapting’ to wild fluctuating markets!

Firstly, the golden rule of Betfair Tennis Trading: ‘Get out early when you can!’.

Let’s look at the following example:

Ana Ivanovic 1.95 v Jelena Jankovic 2.05.

We can see that at the start of the match it’s a very tight one to call.

Let’s assume we’ve backed on Ivanovic @1.95 for 100 units.

This is what’s happened since your backing:

Ivanovic wins the first game to 15 to make it 1-0.

She breaks Jankovic in the next game to make it 2-0. Her odds have now moved to 1.6.

The greening out profit is displayed as 22 units approximately on the platform.

Calculation:

Backed Ivanovic for 100@ 1.95, laid 122 @1.6 

Stake difference 122 – 100 = 22 units (profit) 

You’ve decided to leave the trade on as things are looking good. Since then, the following scenario unfolds:

Jankovic wins the next 2 games to make it 2-2 and Ivanovic is 0-30 in the 5^th game. At this point, you have traded out as you see Jankovic in super confident mood.

Supposing the odds on Ivanovic were 2.5 at the time you trade out, your loss is around 22 units as shown below:

Backed Ivanovic for 100 @1.95 , laid Ivanovic for 78 units@ 2.5

Stake Difference 100 – 78 = 22 units(loss)

Now you’ve decided to put money on Jankovic if the score goes to 0-40, indeed it does, and you put your remaining 78 units on her at a back price of 1.6. By this time, you feel for sure that this match is all Jankovic’s. Except, it’s not as we see why from what follows:

Ivanovic hits 3 aces, makes it to deuce and wins the game from then on to make it 3-2.

The odds are back in favour of Ivanovic who is leading, pretty much the worst case scenario against you. Now you really want Jankovic to win her next game. She loses the first 2 points, making it 0-30 but you feel like giving her a chance but the worst happens as she is broken to 0. The odds on Jankovic has gone from 1.6 back price to 3 as a result of her losing the last 9 points!

You have traded out at 3 and this has given you a further loss of 36 units.

Calculation: 

Backed Jankovic @1.6 for 78 units, laid Jankovic @3 for 42 units. 

Stake difference: 78 – 42 = 36 units.

The worst feeling here is that all these events unfolded right before you in the blink of an eye and you have not bothered to trade more as you are completely unsure which way the market may move next! 

The above scenario is extremely common, especially in WTA.

Let me point out the mistakes first.

You started out by having a chance to profit out 22 units which was ignored. Then the worst started to happen and then you lost 22 units  + 36 units after you backed a lot on Jankovic!

Firstly, let’s look at the 22 units chance of profiting. 22 units is 22 % of our total stake of 100 which itself is a decent amount. In fact anything above 20 is definitely something to be happy about. So, you can take that as a mistake!

Of course, it’s not the biggest of errors as a lot of people, even pro-traders, let the trade run a bit.

But when does it really count as a big mistake? We go to the 0-30 score. You have traded out here which is fine, obviously you would have incurred a loss. But then, you have said to yourself that if it goes to 0-40, surely Jankovic won’t lose the game. That’s the biggest mistake you can make. You hoped you would be 100% right. It’s a very common error but a huge one as this one mistake has got you a total loss of 58 units, or 58% of your stake.

So what should you have done?

Here’s my answer:

It always feels harsh when you lose money. But when you have an opportunity to minimize the loss, you should do it. It’s an extremely hard thing to put into practice and it took me many matches to get used to it. What happens is, as you are controlling your losses over time, you would be amazed how well you have read the market by the end of the match. A perfect trader is someone who has this exit strategy in place much earlier than most and this sets him apart from the rest!

For this example hence, you trade out at 0-30 and leave the market as it is! What you are seeing here is the market behaving very wildly. You do not want to get caught up in a storm like this, hence, just trade out! The match itself is not over and there is no reason to chase either of the players. You can even wait out the first set if you wish, but the first solution to this whole situation getting worse, is to ‘trade out’!

It is extremely hard to put certain matches into practice and people rarely do it. When they don’t trade out and win, we hear the boastful side of the trader. But the other side of the coin is rarely talked about. Why, because it is very likely the trader may have pretty much blew away his entire stake on that mistake!

The best analogy to this article I can give is, if you compare Betfair Tennis Trading to Poker, some of the best poker players are those who FOLD their hands. Trading out is very similar to the Folding of cards. Money saved is money earned.

Thanks for reading!

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