Does internet speed affect your Betfair trading?Posted by Jim Makos on May 17, 2009 in Investing | 1 comment
Having started trading the Betfair markets with a dial-up internet connection in 2004, I can guarantee that your internet speed matters a lot in your trading performance. Apart from having fast refresh times which means always knowing what is going on, your orders are executed much faster. Broadband speed is very important if you trade in-play markets or if you are into scalping, but if you are a positional trader or maybe you prefer swing trading, speed is not what will make you rich after all.
I always considered myself a Betfair scalper. Scalping is a form of trading that involves very quick trades that expose your bets less theoretically. Since your trades do not last more than a couple of seconds, you are less likely to get caught up in a major reversal. Additionally you aim for a couple of ticks profit and your stop loss is really very narrow, not risking more than 2 to 3 ticks at most. Small profitable trades add up in the end of the day and you can come out a winner with somewhat small risk. Because you enter and exit the markets in a fast way, internet speed is essential both for executing your orders and for being able to quickly spot a scalping opportunity. When I traded with a 56k dial up connection I had really a tough time to watch the markets, but since I used a broadband connection (384k at first, upgraded to 1MBit and nowadays 2MBit) I watched my profits skyrocket.
During the last years, Betfair trading has become more difficult for me. I had trouble entering the market in time and more importantly I experienced big losses due to not being fast enough in exiting a losing trade. Money kept filling up and emptying the blue and purple boxes of betfair markets in a more frenzy way than in the past, and I had to adapt my trading style if I wanted to keep up with the pace of other traders. Although I was using technical analysis right from the beginning to spot forthcoming odds movements, I started converting my scalping style into a more swinging style. I kept my trading position open for longer periods and was able to grab bigger movements. Now, in that case internet speed is again important but not THAT important. If you are going for a 5 or even 10 tick profit, you won’t mind that much if you lose 1 tick every 5 trades due to slow internet connection. Whereas in case of scalping 1 tick is about 50% of your average profit and you don’t stand a chance if you keep losing that due to your bad internet connection. If you’d rather be a positional trader, that is targeting for very long movements, and you are exposed to the market for minutes or even hours, it is understandable that speed has very little impact in your trading style.
In conclusion, the faster your trading style, the better the internet speed you should have. Do not underestimate it or else you really don’t stand a chance against the bigger sharks lurking in the betfair markets. I myself never believed internet speed can matter that much in succeeding in Betfair trading, but I was mistaken. And if you believe you are fast enough, check out the following picture I found in the Betangel forum this morning!