Trading sports online may be a very profitable pastime and as an increasing number of people get involved that suggests just one thing… liquidity. With the invention of the betting exchange as well as the rise and rise of the main one, Betfair, there is increasingly extra money being traded on sports.

From horse racing to tennis and football to greyhound racing there are lots of markets available and specialize in. You’ll find even markets for financials and politics.

In-play betting as well as the capability to place “lay” bets have revolutionized our capability to benefit from these markets (for anyone not in the know a lay bet is betting that an event will not occur ie a horse will not win a race). Just watch any in-play tennis match and find out how the odds move. Making feeling of these patterns and developing successful strategies to make regular profit is the holy grail for lots of people.

The basic theory behind all this really is that you’ll need to back at a better price than you lay. It’s the same as business all around the world, you buy a product at one price and also you sell it at another, the difference between the 2 being your net profit.

An example is I back a horse at 2/1 for Ł100. That’s 3.00 in decimal odds. If it wins I win Ł200 and get my stake back. Ahead of the start of the race the odds come down to 6/4 or 2.50. I then lay it for Ł100 and if the horse wins I have to pay out Ł150. The real difference between my back winnings and my lay liability is Ł50. Which is what I would win if this horse wins and if it will not, I lose nothing! A cost-free bet. The really neat trick is to “hedge” your winnings out so you win the exact same amount no matter what horse wins. In the above example I could lay the horse for Ł120 guaranteeing me a Ł20 profit.

The obvious problem is exactly what happens in the event the odds rise? You are left with a bet you cannot sell or get rid of without losing at least some of your stake. This really is where the real difference between traders and gamblers comes in. A gambler takes risks as a way to possibly achieve a profit. A trader is pleased to take a series of small losses safe within the knowledge that the wins will outweigh the losses.

There are several and varied approaches to trading however the most significant thing is discipline. As soon as you fail to close a trade that has gone against you you are no longer trading but excellent gambling. Sure, you could get away with it but when it goes wrong you will surely lose a lot more than you bargained for. The very best way to focus your head and stop the gambling tendency arising is to work to strict strategies with defined entry and exit points.