Trading sports online may be a very profitable pastime and as more and more people get involved that means 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 several markets to choose from and concentrate on. You can find even markets for financials and politics.

In-play betting and also the ability to place “lay” bets have revolutionized our ability to profit from these markets (for all those not within 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 see how the odds move. Making experience 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 is that you will need to back at a greater price than you lay. It’s the same as business all around the world, you buy a product at one price and you sell it at another, the real difference between the two 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. Before 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 difference between my back winnings and my lay liability is Ł50. That is what I would win if this horse wins and if it will not, I lose nothing! A no cost bet. The really neat trick is to “hedge” your winnings out so you win the exact same amount no matter what horse wins. Within the above example I could lay the horse for Ł120 guaranteeing me a Ł20 profit.

The most obvious problem is what happens should the odds rise? You are left with a bet you can’t sell or get rid of without losing at least several of your stake. This is where the main difference between traders and gamblers comes in. A gambler takes risks in order to possibly achieve a profit. A trader is pleased to take a series of small losses safe in the knowledge that the wins will outweigh the losses.

There are many and varied approaches to trading however the most important thing is discipline. As soon while you fail to close a trade which has gone against you you are no longer trading but gambling. Sure, you might get away with it but when it goes wrong you will certainly lose a great deal more than you bargained for. The top way to focus your head and prevent the gambling tendency arising is to work to strict strategies with defined entry and exit points.