By James Woolley
Betting exchanges have been around for several years now, and whilst you can use them to place simple bets, you can also use them to trade various different sports markets. In fact in many ways they are similar to the financial markets, so let me explain how betting exchange trading is similar to forex trading.
Forex trading is basically where you take a position on a particular currency pair in the expectation that the price will either rise or fall. The more correct you are, the more money you make, and betting exchange trading is very similar to this as well.
When you trade you are not looking to bet on the outcome of a particular event. You simply want the price to move in your favour so you can close out the trade for a guaranteed profit. For example you may look to back a horse at 4-1 in the expectation that it will shorten to 7-2 or 3-1, and lay it back for a guaranteed profit if this turns out to be the case.
This kind of trading is often done before the event actually starts, but it is also done during the actual event itself via in-play markets. If you are skilful at reading the markets and anticipating future price moves, then it can be very profitable.
Therefore it is similar to forex trading, and this is particularly true at the moment because advanced charting facilities mean that you can predict price moves using the type of analysis that is generally used in financial trading.
The betting exchanges provide you with basic charts on all the different markets, but there is now software available that offers live streaming charts and advanced technical indicators that you can use. So you can use candlestick charts and common technical indicators to help determine when the price is overbought and oversold, just like forex traders do when they trade currencies.
Another example of how the betting exchange markets are similar to the forex markets is that prices can move as a result of certain news events. So for example if Man Utd announce a weakened team, then their price would suddenly drift outwards, creating a possible trading opportunity. Similarly if Nadal mentioned he was carrying a serious injury going into his next match, then his price would also drift outwards, and it is the same with forex markets because the major economic data releases can move the markets in an instant.
So the trick is to try and anticipate these events and make money from any subsequent price moves. It is not easy to do, but there are plenty of people who make money from both betting exchange trading and forex trading, and it is easy to see why because they are both very similar in many respects.
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