In the past I’ve always advocated respecting the market price and laying to win a fixed amount. This has allowed me to enter the market several times even when the price moves against me because the liability is very small. This can be quite handy because you can averaging down for very small amounts of money and the price at which you need to get green comes in further.
I’ve recently started to have more success laying to a fixed liability however and I’ve realised that for me there a couple of pitfalls when laying to win a set amount. The first being that you can get quite complacent and continue laying for the sake of it, not just because you really think a comeback will happen and that it’s definitely value. There are times when it is good to go in again but having such a small liability makes it all the more easy.
The second and more crucial thing is that you are paying too much respect to the market. The current odds are the price the market thinks the selection should be and why should the amount that you win be limited by the thoughts of the market? As the great Warren Buffet says you shouldn’t pay too much attention to Mr Market. “Price is what you pay, value is what you get.” Just because a price is low doesn’t mean your liability has to be lower than that of a more expensive price.
I did some analysis on my trading and it showed that I’m finding some excellent value at the lower end of the odds scale and laying to a fixed liability would improve my profits as I’m essentially increasing my stake when laying at very low odds.
I previously thought it was a good idea to respect the true price but as most of my activity is now at the very lower end of the odds spectrum and the greatest value being found the lower it goes, an equal liability would have increased my profits.
It also makes for a much smoother and consistent trading process. Each time I press that lay button I’m aware of my potential downside.
I originally layed to win a fixed amount partly as already mentioned, because I wanted to respect the opinion of the well informed market but also because it is the default setting on Betfair and it takes a few seconds longer to select the lay to liability function. It’s not a huge amount of time but most of the events I trade in play are very fast moving and where speed is crucial. Also I believe that laying to win a set amount is the only option on mobile devices (Both Betfair ap and Zoombet).
A lot of the time I’d be happy to lay for more but I’ve focussed too much on the amount to win rather than the liability because of the way I’ve placed my bets. Before I know it the odds are changing and there’s no time to update the stake.
With all this in mind, I decided to create a new betting tool (I’ve called it lay stake calculator) where you can choose your liability and it will tell you what the equivalent stake (amount to win) is for each of the possible odds selections. This means I can still make my bets quickly (and over mobile) and by laying to a fixed liability.
I’ve only shown the stakes from 1.01 to 6.0 (5-1) because this will be all that’s necessary for most and in the example given for a liability of £10 it wouldn’t be possible to lay at a bigger price than this due to the minimum bet of £2. Generally, the value in play is found by laying short and consistently laying with a greater liability than your potential return is not really a good risk reward strategy for markets with good liquidity.
I hope someone find this trading tool as useful as I have and it would be great to hear which approach others take.