A. Market Manipulation
In the video, I talk more about betting theory for the purposes of pre-race trading on horses. Specifically, this video is about market manipulation.
Market manipulators are very good for us traders. The reason is, once you can read how the manipulation works, you have a pattern that you can exploit.
This will be explained in this video.
This video is a sports trading video. Sports trading is gambling and I’m not giving any advice. I am just giving my opinions.
This video is a part 2. If you haven’t seen part 1, I suggest you watch that video before this one. In this video, I will assume that you have the knowledge that I presented in part 1.
So, what is this video about?
Firstly, I will introduce the idea of dividing the market into betting rounds. Each betting round forms part of a story. I will use this idea later in the video and in future videos.
Secondly, I am going to explain one of the first trading ideas that I had that I call the “early drifter”. In this and the next few videos, I will explain how I developed the idea and turned it into a strategy using my theory about the markets and form. However, I want you to see this as an idea and not a strategy.
In the next video, I going to explain how to read and use form for trading. So, the purpose of me presenting a trading idea is to give this video and the next context.
The third topic in this video is market manipulation. I discuss who is doing the manipulating and why? I also explain when the prime time for market manipulation occurs. As I said, market manipulation is good for us, if we can read and understand it.
All the topics in the video are connected. Therefore, I would advise that you don’t skip ahead.
B. Dividing the Market into Time Periods
I started dividing the market into time periods or betting rounds unconsciously almost from the start of my trading.
When I first started trading, I traded in the morning. I would also trade again during the 5 minutes pre-race. In the morning, I would back and lay a few favourites before 9 am and close the trades just after 11 am. I had messed around with the timings and I found that closing the trades at 11 am seemed optimal.
I was consistently successful with laying. However, the back bets were not so good. I was around break even with the back bets. So, I quit doing those.
I used between £5 and £20 stakes for these trades and I made some money each morning.
My morning trades were based purely on form.
I didn’t trade again until the 5 minute pre-race period. So, I will put 30 mins pre-race as a marker for the end of the time period that starts from 11 am.
At the time that I was talking about, I still hadn’t worked out how to win during the last 5 mins pre-race. I wanted to figure this out because I wanted to trade more than £20. I had to keep my stakes low in the morning because, when there is low liquidity and you are using big stakes, you don’t have an easy way out of a trade when it goes wrong. Even with £20, you might not be able to close the trade at a single tick point. In addition, the situation can be worse if there is a big gap between the back and lay odds.
So, I would trade the same horses from my morning trades during the 5 minute pre-race period. I also tried confining my trades to the 2 minute pre-race period.
During both of these periods, I would lose. These losses were as consistent as my wins in the morning.
So, what was going on? Let’s look at what we have.
1. I lay horses before 9 am and exit the trades at 11 am. I win these. This means that weak form drifts during this period.
When I say weak form, I don’t mean bad form. When I say weak form, I mean that the form of these horses appears good at a superficial level. For example, the horse may have won its last race. However, when you dig down deeper, there are uncertainties about the form. For example, the horse might not have done the distance.
My morning back bets only broke even. Again, that didn’t make sense at the time. I could back 2 similar horses based on form. One would get heavily backed and the other would drift like crazy.
2 and 3. Some horses, that drifted, tended to get backed at some point between 11 am and the start of the race. They might not get backed down to their 9 am odds. However, it isn’t often that a favourite, continuously drifts from 9 am until the start of a race.
4. Finally, you have the last 5 minutes, including the 2 minute re-set, which I talked about in Part 1.
Now, obviously, I solved the conundrum, or I wouldn’t be making this video.
From the time that the odds are put out, information (and not money) is influencing the odds. I will explain why punter money is not the main factor. Good form favourites can drift in the market, while bad form favourites can get heavily backed. Because of this, it’s likely that the odds are based on information that bookmakers acquire.
I will come back to this conundrum when I talk about market manipulation. This is just an introduction to the idea of dividing the market into betting rounds. However, before that, I want to explain what I mean by an early drifter.
C. The Early Drifter
Throughout this video, I will work with 2 assumptions. Firstly, the bookmakers control the markets. Their job is to exploit everyone else. I talked about this in Part 1. However, I am going to extend this idea in this video.
Therefore, we need to reverse engineer the bookmaker’s activities. Our job is to take a piece of the bookmakers’ action by piggy-backing on their moves.
The second assumption is that some stable connections keep their strong horses (that appear weak or bad on form) a SECRET. I’m sure that some stables share information with bookies. However, there will be others, who are more secretive. If that is occurring, we can’t easily exploit this situation. If we try, we are more likely to get exploited.
Therefore, we need to be able to identify these types of horses and avoid trading on them.
1. One Positive Variable is not Enough
I will be talking about variables in this and other videos. One positive variable is almost never sufficient to enter a trade. My strategy involves putting a bunch of variables together and building a picture as to what will occur in the future.
We have to overcome a one tick disadvantage and commission to start making money. Each variable adds a small percentage in favour of your trade.
Success in trading is as much about avoiding weak trading positions as it is about finding strong positions.
2. Trading the at 5 or 2 minutes
In this video, I am talking about trading at 5 or 2 minutes before the off. These are often turning points in the market. In either case, we enter the trade by laying and we exit the trade by backing.
One of the keys to trading is timing. It’s ok to miss trades but it’s criminal when you enter the trade too early and ending up losing or breaking even on a trade that you would have won if you had got your timing right.
It’s more profitable if your fear of losing is greater than your fear of missing out.
D. Why Horses Drift
Reading the market requires us to interpret odds changes in terms of real-life events. We might not know exactly what is behind the changes in the odds. However, if we are thinking in terms of real-life events and trying to narrow down the causes behind the changes in odds, we have more chance of predicting what will happen in the future.
Since we are looking for drifters, let’s look at some possible reasons that a favourite can drift.
1. Non-trier
A non-trier is a horse that is not trying to win. I don’t know how often this occurs. In any case, as we are looking for drifters, if the favourite is a non-trier, this would help us. However, it would work against us if any other horses in the favourite range are not trying to win. This is because we need other horses to get backed. We can partially solve this problem by looking at the form and the betting on non-favourites.
2. The Form appears to be Bad.
This may seem counter intuitive. However, we want to avoid trading on these horses. When a horse is put in as favourite for no apparent reason, you shouldn’t assume that the bookies have got it wrong. They may have some inside information that the horse is going to run well today.
3. Set up a Late Gamble.
We’ve all seen the odds of a drifting horse come crashing down, in the last 2 minutes prior to the start of a race. If we avoid laying at the top of the range, we should be able to avoid getting caught out by such gambles.
4. The Price is too Low.
The horse’s odds opened in the betting at odds, that are too low, for a value bet. Now, this is the type of horse, that I am going to focus on.
We are not going down the road of using concepts, such as “value”. We don’t know enough to calculate value odds.
This is partly because we are not privy to inside information. In addition, it probably takes years of looking at form and matching the form to horses’ winning chances to be able to calculate value. So, we are not going to talk about value. Instead, we are going to use logic and reasoning to figure stuff out.
5. There is a gamble horse in the market.
This would include steamers and normal horses, in the favourite range, getting backed. By the way, I count a steamer as a horse that is backed from long odds into the favourite range. Such horses will help our horse to drift. Some steamers are temporary. Therefore, the odds of a drifting favourite may still come back down, after the steamer has run out of steam. We can avoid getting caught out by not laying high up in our favourite’s range.
We can’t usually predict steamers. However, we may be able to predict whether horses in the favourite range are likely to get backed. How we do this will be explained later in the video.
6. There have been changes in the race conditions.
This could include a going change. In jump racing, sometimes, hurdles or fences are excluded from the race because of low sunlight. If too many are removed, it favours horses, that jump badly. This can cause us to miss our trade. This is because the odds change for this will usually occur before the timer starts for the last 5 minutes pre-race.
7. The horse looks bad in the parade ring.
A horse’s odds might drift because of its behaviour in the parade ring or because of physiological reasons, such as sweating or simply because the horse has turned up at the racecourse looking like a dog’s dinner.
As horse’s parade 5 or 10 minutes before the 5 minute timer starts. The odds change for this will usually occur before the timer starts for the last 5 minutes pre-race.
8. The odds are being re-set to efficiency.
If you don’t understand this, you should watch Part 1 of this video series.
So, we are looking to trade horses, whose price is too low. We will do this 2 minutes or 5 minutes pre-race.
Those coloured in blue will help our trade. The 2 yellows are more likely to cause us to miss our trade. The dangers are those, coloured in red – bad-looking favourites and horses, that are set up to be gambled on. We can avoid these dangers. Firstly, we don’t want to lay horses high up in their range. Secondly, we should avoid trading on certain types of horses. This will all be explained later.
E. The Early Drifter Graph
This is what I call an “early drifter graph”. This is the idea that I am going to be working with in this video. However, I want you to understand that using these types of graphs, without additional details, will lose you money.
The detail is important and there is a lot of detail to consider.
If all the details are in place, I would consider laying this horse at odds of around 2.75. This is the bottom of the range. The gurus tell you that only the latter part of the graph is relevant. They are wrong. All parts of the graph are relevant.
It is the drift at the start of the graph that defines an early drifter graph. As I will explain later, if this drift is between certain hours of the morning, I take this as a sign of weakness.
What I am calling an “early drifter” graph, is a horse that has drifted at the start and shown signs of getting backed later. Therefore, the graph on the right is not an early drifter graph. Although the odds have drifted early, this is just a normal drifter.
Generally, we don’t want to be laying horses high up in their range. There is the odd exception. Therefore, I would not usually get involved with the graph on the right.
Early drifter graphs can have different formats. These are both early drifter graphs. The main point is that they have both drifted from their opening prices. Although these is some betting activity on both graphs, they have not been backed below their opening prices.
However, the timing of the backing is important. For the purposes of the trading idea, the backing has to occur after 30 minutes pre-race. You will understand why later when I go back to the timeline of betting rounds.
I wouldn’t trade the graph on the right because that looks as if it was backed too early in the day. I would consider trading the graph on the left. Although there has been some backing, it has drifted back up. I would consider trading this graph more risky that the first graph I showed, where the backing took place right at the end.
The next step is to try and identify what the opening drift means. We want to identify situations, where the drift is a sign of weakness. However, it isn’t always a sign of weakness.
I want you to understand where I am going with this. We are looking to lay a horse and for it to drift.
There are 2 main ways that we can improve our chances of winning. Firstly, we want to find situations in which there is an increased probability that this part of the graph does represent weakness and it is not just a random drift. Secondly, we want to find situations where there is an increased probability that the horse’s odds will drift.
The first factor weakness at the opening, will increase the chance that the odds will drift at the end. However, we want to analyse all of the factors that can influence the drift at the end.
We have access to a lot of information. We have theory, the betting and form. We should use everything we have to increase our chances of winning.
F. My Theory
So, here is a theory on the cause of the opening drift. Imagine a bookmaker is putting odds out for a 6 horse race. Although the bookmakers don’t know for sure what the true probabilities are, they probably have a better idea that most punters.
So, it’s a reasonable assumption that the can put odds out that reflect close to the true probabilities that each horse will win.
Let’s also assume that bookmakers know which horses, in the field, are likely to attract the punters. The bookmakers can figure this out by looking at the form and the trainer of each horse.
Let’s say that the bookmakers have decided that punters will be interested in the favourite and the second favourite and there will be little or no interest in the other horses.
Wouldn’t it make sense, from the bookie’s point of view, to shorten the odds of the favourite and second favourite and lengthen the odds of the other horses or leave them unchanged.
The bookies have an overround that they can play with. The overround of the odds on your screen is around 3%. I’m not sure what the average overround for bookmakers is in a 6 horse race. However, I’ve seen overrounds of 10% or more.
It’s not compulsory for them to spread this extra percentage by shortening the odds equally across all of the horses. They can use all of this percentage to shorten the odds of selected horses. They can also shift the overround from horse to horse over the course of the day, without giving value away.
If the bookmakers believe that the punters will only be interested in the first and second favourites, they could shorten the odds of these horses. Then, they could either leave the other horses, that wouldn’t appeal to punters, unchanged or they could lengthen them slightly.
In Part 1, I explained that, during the 2 minute re-set, the odds head towards efficiency. If this theory is correct, it means that, during the 2 minute reset, the odds of these favourites should end up longer than the opening odds.
Sometimes, the bookies get the opening odds wrong. However, an early drifter graph suggests that in these cases, the bookies have opened the odds at the bottom of the range or below the bottom of the range of the horse’s true probability of winning.
Does it make a difference whether this graph represents the favourite or the 2nd favourite? Yes, it does.
As you move away from the favourite, this type of graph may not mean the same thing. Let’s say, this graph represents the 2nd favourite. Let’s say that the trainer of the 2nd favourite wants to bet heavily on his horse. He can just sit back and hope that betting on the favourite pushes the odds of his horse up. Then, when there is more liquidity in the market and the odds are high, he can come in with his money. It would be even easier for the trainers of the 3rd and 4th favourite to do this.
You could argue that the trainer of the favourite could wait until backing on the other horses pushes the odds of his horse up. However, it is more difficult for a trainer to wait for his favourite to drift, especially when the form of his horse is attractive to punters.
Therefore, the further that you move away from the favourite, the assumption that the initial drift reflects weakness becomes less likely.
So, for the remainder of this video, we will only be using the favourite as our target horse. I’m trying to present a tight model. I do trade 2nd and 3rd favourites. However, if we start with a tight model, we can loosen our strategy when we feel there are enough supporting variables to counter the negative variables.
G. Dividing the Market into 4 Time Periods
So, let’s get back to the time line.
So far, I have presented a different way of looking at the market compared to the traditional way. The traditional way of viewing the market is that the bookmakers put odds out. Punters bet. Then, bookmakers lower the odds of horses that punters have bet on. That may be true if the money is what bookmakers perceive as in the know money.
However, my view is that bookmakers predict which horses that punters are going to bet on. Then, they lower the odds of these horses as much as they can, before punters have even got out of bed in the morning.
If you are on board with my view, you are already seeing the market through different eyes compared to the majority of people. However, there is more – much more.
So, I have changed something on this timeline. Previously, this said that “Some 9-11 drifters get backed”. For the early drifter, we want to ignore those and look at the ones that stay at their drifted position or drift a bit more.
Often, these horses get backed sometime during the 30 minutes before the start of the race. The time that this starts varies. If the horse is backed to the bottom of its range at 5 mins pre-race, these will often drift sometime between 5 minutes pre-race and the start of the race.
So, what is going on?
So, let’s analyse what the bookies and punters could be doing throughout the day.
At the start of the day, best odds guaranteed also known as BOG opens at various bookmakers. It opens at various times. There are 3 bookies that, I know of, that offer BOG all day. I know of one that opens for BOG at 8 am. Most have 9 am and 10 am opening times. So, let’s go with 9 am. So, we will call 9 – 11 am the BOG round.
It’s likely that there is a lot of betting activity during 9 am – 11 am in the morning. If a punter favourite drifts during this time, it is likely to represent weakness. It is likely to represent weakness because, the punters are betting on a horse and the horse is still drifting.
So, after 11 am, the bookmakers might increase the odds of the favourite a bit. I call this the post-BOG round. This draws in the punter, who is looking for value. He probably isn’t getting value in terms of the horse’s chance of winning. However, he will know that he got better odds than the punters, who took odds between 9 and 11 am and feel that he got value.
It’s the next betting round that is interesting.
Let’s try to figure out what is going on during the betting round where the odds are getting backed to the bottom of the horse’s range.
So, sometime, between the 30 minute and 5 minute pre-race period, the price of the horse comes down from the top to the bottom of its range. This can be gradual. However, I would say that most of the time, the odds come down quite fast. As I’ve said, the timing when this starts varies. Sometimes, the odds come down in just a few minutes before the 5 minute pre-race time.
In addition, the closer to 5 minute timer, that this occurs, the more confident I am that this is manipulation.
After the odds have come down, the odds often go back up. This can occur between 5 and 2 minutes pre-race or during 2 minutes re-set.
One day when I was trading, I asked myself the question, “Why would the odds come down fast just to go back up again? It didn’t make sense.
What’s this all about? Bear in mind that we are not talking about any old favourite. We are talking about a horse that has form that punters like. In addition, we are talking about a horse that has shown weakness in the betting earlier in the day.
There are 2 main theories that I have heard. The first one is that traders move from race to race. Close to the start of the race, traders start trading on the race. This causes the odds to reduce.
The second theory is that punters are backing horses close to the start of the race.
While there may be truth in both of these ideas, I have 2 theories. Although my theories don’t negate the other theories, my theories are of more practical use to us as traders. Both of my theories assume that it is the bookmakers, who are responsible for pushing the odds down before the 5 minute pre-race mark. So, the question is why would they do this?
1. Theory 1
My first theory is this. The bookmakers are pushing the odds down close to the 5 minute pre-race mark this for the same reason that they push the odds down at the start of the day when BOG opens. Coming up to the start of the race, there is going to be another heavy betting session. At this point, the bookmakers have a clear idea of which horses that punters are likely to bet on. They have been taking bets on the race all day and it’s likely that the punters, who bet close to the time of the race, will bet on the same horses that have been backed during the morning.
So, towards the start of the race, the bookies push the odds down in anticipation of future punter activity. At this stage, the punters are in a “beggars can’t be choosers” situation. If they want to bet on the race, they have to take the odds on offer.
I ran with this theory for while. It didn’t affect my trading on the early drifter graph one way or another. I could win most of the time. However, the next theory opened up a lot more trading opportunities.
2. Theory 2
To illustrate my second theory, let’s talk about poker. Poker has given me a lot of ideas about trading. In a poker hand, there are betting rounds. That’s probably why I thought about dividing up the trading day into betting rounds. In poker, we read hands. In trading, we read the market.
My second theory about possible bookie manipulation also came from me comparing poker with trading.
When a poker player has a super-strong hand, his only goal is to find a way to get other players to put money into the pot. However, he can’t just shove all his chips in and hope his opponent calls. He has to try and read what kind of hand his opponent has and what type of player he is. Then, he has to use a strategy that fits his reads of his opponent, which is a form of manipulation.
So, the main points are that his goal is to get his opponent to put his money into the pot and that he may have to manipulate him into do so.
In this hand between hero and villain, hero has a very strong hand. If villain has a very strong hand, hero won’t have any trouble getting all the money in. If villain has a strong hand, but not a monster hand, hero would have to play the hand a different way. For example, he might find a way to get villain to take the lead in the betting, thereby getting villain to bet the hand for him.
If hero senses that villain has a weak hand, hero might have to slowplay and hope that his opponent bluffs or catches a card that makes him believe that he has the best hand.
So, what this got to do with market manipulation. Just like hero in the poker example, the bookies are on the right side of the bet. They create the odds which is equivalent to them deciding what cards you are dealt in poker.
Since everything is in their favour, they want to get as much money as they can get into the pot. They want as many punters as possible to bet as much money as possible. Therefore, the bookies may manipulate the market (just to get punters to bet).
If the backing on this part of the graph is market manipulation, the bookmakers may be pushing the odds away from the horse’s true probability of winning. In other words, the bookies may be moving the market away from efficiency.
Bear in mind that market manipulation doesn’t always move the market away from efficiency. For example, the re-set is a form of market manipulation where the odds move towards efficiency. However, in this case, the horse has been weak in the betting all day. Therefore, it is likely that, if the bookies are pushing the odds down for manipulative purposes, they are moving the odds away from efficiency.
In Part 1, I explained that the odds move towards efficiency during the re-set.
If we can identify market manipulation, we may be able to predict the direction of the re-set. This is because, when market manipulation moves the odds away from efficiency, the re-set moves the odds back towards efficiency.
So, some of you might be thinking, “Ok, that’s all well and good Artimus but how does reducing the odds of a horse get punters to bet more money? Don’t punters want better and not worse odds?”
So, let’s address that question.
Well, ask yourself, why would a punter bet at a time so close to the start of the race, when he had all day to get a good price with BOG? There are 2 main types of punters, who I can think of, who would do this. Firstly, there is your casual punter who bets small amounts of money for entertainment purposes. However, this guy doesn’t really care about drifters. He probably doesn’t even care if he wins. For him, having a bet is just more fun than watching day time TV.
Secondly, there is a serious type of punter. This punter may like to bet early but he has a reason for not betting early in this case. So, this type of punter reads the form and chooses his horse. Part of his betting criteria is that he doesn’t bet on drifters. Since the horse has only drifted during the day, this punter is waiting to see if there is a market move on his horse before placing his bet. In other words, these punters use both the form and the market to help make decisions.
These types of punters probably make up the majority of punters. In addition, favourite backers also make up the majority of punters. Therefore, if the favourite is unpopular, there won’t be as much money wagered on the race compared to a race where a favourite is getting backed. The betting on the non-favourites won’t usually compensate for lack of interest in the favourite.
When you watch a horse race, the commentators talk about a drifter as if it’s a bad thing. They don’t say that the favourite is drifting and therefore, you can get great odds. They talk about a drifting favourite in a concerned tone. When a horse drifts, they often use the expression that the horse is “friendless in the market”. So, the bookies obligingly provide the horse with a friend when they back a drifting favourite’s odds down.
If the bookies are deliberately reducing the odds 15 or 10 minutes before the start of a race, they are emulating a market move. Therefore, ironically, they may get the punters, who are waiting for a market move to bet, by shortening the odds.
This won’t cost the bookies that much money, if any. When they reduce the odds on their own website, it’s probably a matter of typing in new odds into a computer. When they push the odds down from the top of the range on the exchange, they are probably re-investing money that they’ve layed on the horse at lower odds. Therefore, the bookies might just be arbing when they push the odds down. As I explained in Part 1, when they push the odds back up during the re-set, they are value betting.
This is all theory of course. However, the bookmakers have motive, means and opportunity. Remember, that 2 of the betting exchanges have sportsbooks as well. So, they are bookmakers as well as exchanges.
So, let’s get back to the timeline. We have the BOG round and the post-BOG round. So, what should I call the next round? I thought about calling it the “Market Stimulus Round”. However, manipulation, during this phase, may not always take the form, of stimulating the market. In other words, manipulation can be for different purposes. I thought of calling it the “manipulation round”. However, manipulation probably takes place throughout the whole timeline to differing degrees.
Anyway, finally, I settled for the name, “Manipulation Prime Time”. This is because this is a period where a higher level of manipulation occurs. Although I track horses across the whole timeline, the manipulation prime time period is where I look for peculiar market behaviour. The idea is to figure out what that peculiar market behaviour means and how it affects the 2 minute re-set. This is often, off the ladder work. I may come away from a race without trading. However, I will be thinking through what I have seen and trying to figure out if there is a pattern that can be exploited. Often, I can’t figure it out immediately. However, once I am aware of a potential pattern, I will be looking for the same pattern again. It can sometimes be months later that something clicks and I understand the pattern.
What I want to get across to you in these videos, is understanding how to develop your own trading strategies.
After manipulation prime time, you have the last 5 minutes pre-race, which includes the 2 minute re-set period that I explained in Part 1.
The main point is that market manipulation may be a signal that we can make money during the re-set phase. You never know for certain that the market is being manipulated. However, I assume that, if it looks like manipulation, it probably is manipulation.
You might be wondering how the bookies can push the odds of the favourite below its efficient odds without giving odds, that are above their efficient odds on other horses. Remember, the bookmakers have the overround for their own odds on their own website. They can shift this overround from one horse to another, without giving odds that are value to the punter.
I’ve used 30 minutes pre-race as the time that market manipulation might start. However, it’s not practical to stare at a trading ladder for 30 minutes. I typically start looking from about 15 minutes pre-race. The closer to the 5 mins pre-race time that the backing on a drifting favourite starts, the more likely that I am to believe that this is manipulation.
In addition, manipulation may not occur in every race. For example, if there is a super-strong favourite, you are less likely to see any manipulation. In this case, the bookmakers don’t need to stimulate backing on the favourite. However, they might try to find ways of stimulating backing on the other horses.
H. The Perfect Graph
This graph is just a model. You won’t see a graph exactly like this often. There are other graphs that give the same message, the message being that the favourite is weak.
It’s ok to trade when the graph is different from the model that I’ve presented. However, the further that you move away from the model graph, the more that you require compensating variables. These compensating variables can come from the form which is what I talk about in the next video. It takes judgement to figure out whether a graph is good enough to trade. This isn’t an exact science. However, it might be helpful to compare your graph with the model that I’ve presented.
Sometimes, during the market stimulus round, the odds will only come a small way down and not to the bottom of the range. In this case, it looks as if the odds are trying to come down. However, there are already layers in the market. I trade these when they are above the bottom of the range. Again, finding the right spot to get in and out of trades isn’t an exact science.
The most important requirement for a trade is to have a clear long term view of the direction of the horse’s odds.
I want you to understand is that, what I have explained in Parts 1 and 2 is not a complete idea yet. Other factors that are essential are race selection and favourite selection. These topics will be covered in the next video, Part 3.
Don’t Rely on Graphs
I want to say that it’s not a good idea to rely on graphs. I know I’ve used graphs in this and other videos. That is to give you a visual representation of what is going on.
I use a pen and paper. I write the odds of the favourite down before 9 am.
Then, I note down the odds again at 11 am.
The reason that I don’t recommend using graphs, is because when you open the race in the ladder 10 minutes before the start of the race, the betting between 9 and 11 will be compressed on the Betfair graph. You won’t know where the 9 – 11 am BOG round is on the graph.
If you write the odds down, you can use these to give yourself a visual representation of what your graph would look like. When you look at the numbers (rather than the graph), you will often have a completely different visual representation of what has occurred in the betting compared to what you see on the ladder charts.
If there are non-runners declared between 9 and 11 am, you will have to recalculate the odds that you noted down before 9 am, as if the non-runner had already been declared. This is so that you can compare the pre 9 am odds with the post 11 am odds.
If you want to save time with these calculations, you can use the Betting Exchange Rule 4 Calculator that is on my website. I will leave the link for the calculator under the video.
You just input the pre-9am back and lay odds, where it says original back and lay odds, respectively. In this case, I’ve used 3 for the back odds and 4 for the lay odds. In this example, I am assuming that there was a big gap between the back and lay odds.
Then you put the non-runner total percentage in. This is the percentage that shows up next to the horse’s name on Betfair after it has been declared a non-runner. If there is more than one nonrunner declared between 9 and 11, you have to add up the percentages and input the total into this box.
Then, the calculator gives you 2 numbers. The first is the average of the odds that you input, which is the number between the back and lay odds at 9 am. The second is a re-calculation of this average, which takes the non-runners into account.
I. Conclusions
Reading the market is about understanding the Betting in terms of Real Life Events. In particular, we need to understand manipulation in terms of real life events. Always ask, who benefits from the manipulation and how do they benefit.
In order to identify manipulation, we need to track horses at different points in the timeline. In addition, we need to focus on manipulation prime time. Once we have identified manipulative behaviours in the market, we need to try and connect these to the 2 minute reset and identify if there is a pattern that we can exploit. The key is to find a long-term direction for the horse’s odds during the 2 minute re-set.
If you can do this, you may be able to develop your own trading strategies. I believe that the reason that many people fail at trading, is because they don’t know where to look for information. The gurus divert people’s attention to things like volume bars and so-called resistance points. I don’t even think about stuff like that. In addition, I don’t even believe in that kind of stuff.
In Part 3, I will explain how to read and use form for trading. This will help us understand what we are trading on.
So, that’s all for this video. Take care.