Nowadays there is huge interest for betting in horse racing due to the Royal Ascot taking place and a lot of money is risked on those betting markets. The volume traded in Betfair Ascot’s markets almost always exceeds the one million mark, differentiating their odds movement behavior a bit. Let’s take a look at a couple of betting graphs from yesterday’s horse racing and try analyze the odds movement in Royal Ascot races using technical analysis fundamentals.
At 15:30 there was a horse race taking place at Hamilton and this is how the betting market looked a minute before the off:
In the end Jenny Potts came out as the race’s winner but that is of little importance for us. Since our main interest is the odds movement right before the race’s off, there were 2 very interesting betting graphs in that particular race. First, Salerosa which was the favorite horse started trading at 2.60, drifted to 4.80 and finally dropped back down to 2.90 right before they start running. Here is the betting odds chart:
The starting uptrend was quite fast and usually such a violent odds movement means irrational and nervous trading moves, which most of the times result to a total correction by the market. It was such a scenario in this horse race, since during the last 10 minutes before the off, the trend was a steady downfall. The uptrend was apparent where it was expected to end, and indeed the trendline was verified when it was finally broken and the trend not only ended but it also reverted. When the uptrend had ended, it was logical to think that it may reverse just a little in order to absorb the traders entering the market late. However that reversal transformed into a main trend that moved the betting odds down to 2.90!
I believe the betfair graph above is a fine example that we can make money trading the Betfair horse racing markets before the off.
However it was not the only interesting chart of the horse race. Grethel’s odds experienced a much more impressive movement , climbing from 6.00 to 35.0! Remember, we are still talking about trading before the off! The main trend wasn’t threatened until the last seconds before the race started, when we should have been closing out trading positions or not even thinking of reentering the market. The uptrend verification occurred at least 3 times, while the last verification point (around 22) was a good opportunity to lay and close out higher. Generally speaking, the points where the odds hit on the trendline (verification points) and the odds continue moving in the same direction, are very good entry points for initiating a trade.
The next horse race was Royal Ascot’s and here is the betting market 1 minute before the off:
Tartam Bearer’s odds being the favorite developed a downtrend as we can see from the betting graph below. The trendline was verified here as well multiple times, and all the trades started at those points would result in profit, given that we traded out when the trendline was broken at 2.50 1 minute before the off. Due to the big volume traded in that market in comparison with the previous horse race, the betfair chart indicates a much more calm movement with less rapid movements and ups and downs. The reason for that is the capability of the particular betting market to deal with very big bets that are submitted. The bettors’ and traders’ interest in that market was more than obvious.
However, even at such horse races where the liquidity is phenomenal, big odds movements that are not expected, do happen. For example, Virtual drifted from 15 all the way up to 24. Laying at 15 and backing at 24, we would stand to win 64% profit! How do we come up with that number?
Let’s say we laid 100$ at 15, so we would risk 1400$ if Virtual won to win 100$ if it eventually lost. We would then back Virtual at 24, so if the horse wins we make 2300$ and if it loses, we lose 100$. In case Virtual loses we make (+100-100=) nothing, lose nothing. In case it wins, we make (-1400+2300=) 900$. 900$ of 1400$ that we risked is 64% profit. If we then go on and green up (split the profit equally to all horses) by laying 37$ at 24.0, we would have won 37$ no matter the outcome!
This article was originally written in Greek and published in the Greek Betfair Blog.