Selling the draw is basically gambling.

Once again:
Backing = buying = going long = long
Laying = selling = going short = short

One of my friend’s favorite strategies is laying the draw, waiting for a goal and backing the draw to lock in a profit. I tried it and found it very mechanical and unsatisfactory.

Problems with selling the draw
1) Exposure: If you sell the draw at 3.5, you are risking 2.5 to win 1.
2) The non-favorite scores first: odds go against you and you need an exit strategy that won’t lock you into a loser. Only late in the game will a lead by the non-favorite begin to move the odds in your favor and if it’s 1 goal lead, your gambling that the favorite won’t score an equalizer.
3) The favorite scores- this should be good news but I’ve found that the odds move very little. Exiting after the favorite scores first gives a small amount f profit but not enough to offset the risk. The draw odds move late in the game: The period when the draw odds really begin to move is usually after 70 minutes. That means often you have 70 minutes of waiting before any meaningful move in the odds can make the trade worth the risk. Selling the draw is more about prayer than about skill. The idea of hedging with the Next Goal is cute but the liquidity is so bad that it might work for positions of a few pounds.
4) Draw odds swing hard only when the favorite takes a commanding lead of more than 2 goals or the match is about to end. Any lead by the non-favorite barely moves the odds unless it’s after the 80th minute.
5) You sell the draw and no one scores: If you’re trapped

selling the draw from kick-off and the score is 0-0 after 70minutes, the odds will plummet against you. You lose multiples of what you could possibly make.





Here's an example of how little the Draw odds can swing. Blackburn is leading 0-2 at the 25th minutes and the odds have moved form 4.0 at kick-off to 4.7. Compare this to the odds of Villa, below in the same interval.

Here's the same match, also at 25 minutes. Villa began at odds of just below 2.0 at kick-off. After going down 0-2, their odds swing to 12.

The best money is when odds swing hard and a trader knows how to work the market. What would you rather trade, the Draw or the favorite?

Simple isn’t always fun: Gambling vs Trading
Gambling is fun, but not for me. Gambling for me is taking a position on an event before kick-off and praying that you are right. Gambling holds the thrill of being right or the agony of being a victim of fate. Gambling is simple and mostly passive. I don’t like being at the mercy of the market or a sport. I don’t like being powerless to work my way out of a bad situation. I like being able to take advantage of opportunities to win much more than a placing a bet could allow. Gambling doesn’t let you do that. That’s why I’m a trader.

Trading is much more fun than gambling. Trading is using your intelligence, insight and foresight to play the market. It is the opposite of gambling. Gambling is basically a passive activity. Trading is taking control of your position in a risk based environment. I like trading much more. It lets me try out my ideas throughout an event, whether it’s a day-trading S&P futures or Barcelona vs Real Madrid.

Once again, gambling is taking a position at kick-off and then praying that the outcome goes your way. It’s sort of a “buy and hold” mentality. You get married to a position, for better or worse. Trading needs a lot more in the way of thinking and insight about what’s actually happening in a market, or on the field. So you “buy and hold” gamblers, get ready for a bumpy, but very fun ride.

My Jargon
I think of trading Betfair in the same way I think of trading stocks, backing is the same as buying or going long and laying is the same as selling or going short.

More people trade stocks than sports on Betfair. Communicating to the masses is easier if you use their jargon. Personally I prefer it since I traded the financial markets long before I ever heard of Betfair.

So let’s get this straight:
Backing = buying = going long = long
Laying = selling = going short = short

I will be using these interchangeably because this is sort of a stream of consciousness thing and I naturally tend to mix the terms.