8 Lay The Draw Exit Strategies | Sports Trading Life
Sports Trading Life

lay the draw exit strategiesOne of the main problems many football traders have with “Lay The Draw” is finding an exit strategy that suits their own personal attitude to risk or even knowing how/when to exit at the right time. Some people may think this type of trading is simple but there are still many decisions you have to face during the course of a match.

When exiting a trade you need to be sure that you have a risk-reward ratio that you can maintain with your usual strike rate. You might win 90% of your trades (theoretically), but if you are losing all your profits on the 10% of losing trades then you have a negative risk-reward ratio and the way you exit trades needs to be adjusted. It might even be your exiting strategy that is preventing you from profiting rather then your actual selection method.

Here are some Lay The Draw Exit strategies depending on how the trade is going.

 Favourite Takes The Lead

Instant Cash Out

The original Lay The Draw strategies from years ago would suggest that as soon as the first goal goes in and the favourite takes the lead then you “cash out” or “green up” your profits and be done with the trade. This can be good in that it is simple and can mean you are done with a trade in the first half which gives you more free time. The big problem is that over the years the markets have become more efficient which can mean the only available profit after 1 goal is about 35-45% return on your stake. Depending on your risk-reward ratio and the time you exit the trade this can mean you will need a 70%+ strike rate in order to profit long term which can be tricky to maintain for some.

 Wait For 2nd Goal Then Cash Out

These days you will see more and more traders advocating staying in the trade and only cashing out if/when the favourite goes 2 goals up. If the favourite scores first and is dominant then why not stay in longer? When this happens you will see a much bigger odds swing and profits of 80%+ can usually be locked in. This is obviously much better then the average 40% you take after the first goal however this raises questions of its own. Since the favourite is now leading by 2 goals is it even worth cashing out the trade? A strong favourite does not often blow 2 goal leads so with the trade going well would it not be better to just let it run till the 90th minute and make 100%. In some ways, by trading out at this point you might actually be diluting your profits more then anything. If the favourite does drop a goal and the scoreline goes back to 2-1 then you still have the option of getting out with a profit if you are feeling really cautious.

 Let It Run

There is an argument for simply letting it run and maximising the profits you wish to gain. If either team is winning the match then you are winning the trade so why exit out of it? Some will argue you should only exit out of the trade when you are losing it while letting the winning ones run to their maximum. The main argument being that if you are laying the draw in a match then you are doing so because you feel the value is there to do it. So why kill your value by exiting early?

The big problem with letting it run when a team is winning is that a late equalising goal will leave you kicking yourself and wondering why you did not exit for profit when you had the chance which will mean next time you lock in a small profit only for the favourite to romp home easily. This is the type of psychological battle that many newbie traders end up losing.

 Underdog Takes The Lead

 Instant Exit

The underdog taking the lead is the cause of some big headaches for newbie lay the draw traders. This is the scenario that causes lots of panic but really you should keep a cool head and have your exit strategy in place. Some suggest you should just exit the trade for, probably, a small loss and in some cases a small profit. This is a good idea since the favourite is still going to be more likely to score the next goal in this situation but then why exit a trade you are in a winning position with?

 Lay The Underdog

Some advocate laying the underdog if they take the lead. I believe this earned the nickname of the “metaltone” technique in the football trading scene. The idea being that if/when the favourite does equalise you are actually in a stronger position to green up. The problem with this is that if the underdog goes on to win the match then you have just messed up a winning trade which was actually to “lay the draw” and was actually a winning trade. Surely, if you did not expect the underdog to win the match then your trade should really have been to “Back The Favourite”? If the underdog takes the lead then you are now winning your trade so why, suddenly, change your game plan?

 Let It Run

Many of the more aggressive traders will suggest you should just let it run if the underdog takes the lead. As mentioned above, if either team is winning then you are in a winning position with your trade. If you are too worried about what might happen if there is a late equalising goal then perhaps you are over staking as it sounds like you are more afraid of losing then you really should be.

 No Goal

 Exit at pre-defined exit point

The “dreaded” 0-0 is the bane of many football traders but it really depends on how you handle it. Many LTD traders suggest you exit at a pre-defined point, this can be half-time, 70 minutes or when the odds hit 2.0. Doing this can lower your losses somewhat, but then there is always the thought that a goal might be just around the corner. Can you handle the mental anguish of locking in a loss on a trade only for a goal to fly in moments later?

 Let it run till final whistle

If there is no goal by a certain amount of time then you can exit by locking in a loss across all markets. However, is there anything to actually be gained by doing this? The majority of goals in football are actually scored AFTER the 70 minute mark which is usually the time most LTD traders close their positions. If you are laying the draw in a match you are doing so because you do not believe the match will end in a draw (surely?) so why not just stay in the market till the goal eventually arrives. Yes you are risking more money this way but if you have a good strike rate then you might actually do better this way. I have spoken with many LTD traders that now just stay in the match till the goal arrives even if it does mean risking all on a 0-0.

 Overall

There is no doubt that LTD trading is much harder now then it may have been years ago but it can still be profitable. Much now comes down to your own match reading skills and keeping a cool head under pressure.

There is no reason why you need to stick to one single exit strategy everytime you trade, the best way is to make your decisions as the match develops. Perhaps you felt really confident at kick off that a team would win it comfortably so you planned to “let it run” however with 10 minutes left they are leading 1-0 and under lots of pressure from the underdog so you decide to “cash out”. There is nothing wrong with this and in-play trading can involve a lot of changing of your plan.

Just make sure to always have a plan for every scenario and do not be a rabbit in headlights when trading football!

You can find two very interesting alternatives to regular LTD strategies in The Trend Reports. This is LTD Gold and also LTD Reverse. Both are worth checking out!

1 Comment for this entry

  • alan says:

    I always enjoy your articles, even though I know theese strategies its great to be reminded in a clear and precise way,,, I wish you had given this info to me in 2004 :).,, anyway
    Thank you
    For anyone new to trading this info is like gold, use it, learn it and adapt it to yout trading
    Good luck all