Ever tried “Lay The Draw”? You are going to love reading some of these typical LTD mistakes and you might even be able to relate to it!
The Lay The Draw strategy is one that often divides sports traders and Betfair punters. I know plenty that make the equivalent of a full time income from it to this very day, yet if you look on forums and blogs you will see many football traders complaining that there is no longer an edge with it.
My view is that your edge is only as good as your match selection process and if you put good effort into research then you will be rewarded. However, there are many common mistakes that traders make when trying LTD which causes them to lose.
1- Overusing The Strategy
Many newbie traders will learn this way of trading and immediately begin trying to use it on every match that goes in-play that fits their criteria. This can usually be at the expense of any sort of pre-match research since it all sounds so easy.
I admit that I did a similar thing once upon a time when I first learned of this method. I remember getting up at 8am on a Saturday many moons ago and trading LTD on every match that had the favourite odds-on. It was quite a day as by 5pm I was in huge profit for the day and feeling like I had found the holy grail. However, by midnight I had lost most of it on the Spanish and South American matches and went to bed exhausted with a loss of about £10 for my days work.
This made me realise, very quickly, that the method is sound however, as with most things, solid match selection was going to be the key to success. Ian Erskine from FTS Income claims to make his main income from LTD and he emails out the matches he is trading. There is no coincidence that he only seems to email out about 6-8 picks a MONTH these days!
2 – Panic When The Underdog Scores
So you have picked a match to use LTD on, it goes in-play, you see the market go suspended after a few minutes and you get ready to fill your boots with profit. However, it is actually a goal to the underdog and the draw price has gone LOWER rather then higher. This causes a huge dilemma and plenty of newbies get really panicked at this point.
Do you exit the trade even though currently you are actually backing a winning outcome? Do you lay the underdog as you expect the favourite to equalise?
This is the time when it really does pay to have a solid plan in place for this scenario and STICK to it. I know some who exit the trade for a small loss and get back in if it goes back to 1-1 and I also know some who hang in there as they know the underdog could easily get a 2nd goal and secure a winning trade.
There is no right or wrong in this instance just as long as you formulate your plan and stick to it every time.
3 – Trying To Use Insurance
A typical newbie mistake when it comes to this way of trading is believing that using insurance will soften the blow when you make a loss. It is true that you will make a smaller loss if you use insurance but then you will also make smaller winnings too which pretty much defeats the object.
I have heard of all sorts of “Insurance” techniques banded about. This could be backing 0-0 or backing 1-1 or even backing the half time draw. These will not get you very far and will just over complicate a very simple trading strategy.
My advice would be to give up on trying to find ways to take insurance since that just eats into your profit margin. You should be entering a trade expecting to win rather then being worried about what might happen if it loses.
4- Only Locking In Small Profits
The big problem with this strategy is that locking in a profit immediately after the first goal can often mean these profits are not very big. Depending on the strength of the favourite you will usually be locking in a profit of 20-40% on your stake. This is just on your stake and actually often just a 5-10% profit on your overall liability. Of course, if you stick to your stop loss you should not be risking your whole liability but it was worth pointing out.
So if you are locking in regular profits between 20-40% on your stake and you lose 100% of your stake when you hit a loser it means you need a strike rate of over 70% in order to begin making long term profits. Not impossible but it does make your job much harder and, again, means your match selection needs to be on point.
The fact is that you are actually much better off by only locking in profits once a team has gone 2 goals ahead as this could produce profits in excess of 70% or at least waiting till the odds go that high in-play later in the match. However, the newbie attitude is usually to lock in profit as soon as it is there which is actually a mistake. You should be racing your winners long and only cutting your losers short.
5 – Picking Matches With Poor Liquidity
You might scour the coupon and spot what looks like a great opportunity in the Bulgarian league or something else just as obscure. You might even do all your usual research and feel that the opportunity looks great. However, many newbies fail to think about the liquidity in the market before the trade.
What can happen is that once the match goes in-play you are forced to take poor odds as there is simply not enough other traders in there to offer fair prices. I have heard about people trading matches from League 1 on a busy Saturday afternoon who complain they could not get out of the trade even when the favourite is leading. Sometimes they get lucky and the favourite romps to a win but sometimes it can get nasty as a late equaliser can put your whole liability at risk.
Look for at least £100k matched BEFORE kick off if you want good liquidity, otherwise you could end up in a sticky situation.
6 – Abandoning The Stop Loss
A common newbie mistake is to feel that a goal “is coming” and to leave their whole liability in the market only to get stung by a 0-0 and have a huge loss relative to their bank. This is the type of loss that can cause many to give up.
There is a reason that traders have a stop loss point and that is to protect your risk-reward ratio and, eventually, your trading bank. There is actually nothing wrong with laying the draw and letting it run till the end of the match but if you are going to do that then you should also let your profits run to the very end without greening up as this will give you a good risk reward ratio. Locking in a profit of £40 when you are risking £450 per trade means you will need one hell of a strike rate to remain in profit.
The best advice is to simply have your stop loss point in place and stick to it every time without fail. If you do not feel that you have the mental strength to always trade out of a losing position then perhaps this is not the right industry for you.
7 – Giving Up Too Easily
This is the same mistake that can be applied to many different things in life. Very often, the biggest mistake is giving up before you get chance to realise success.
There are many who give this strategy a go but believe that it is much easier then it is in reality. They end up making some of the above mistakes and simply just give up. The key to this strategy, as with most strategies, is in your match selection process. Trying to do anything blindly is the quick route to the poorhouse.
If you work at this type of method then you will eventually begin to get somewhere and this really is one of the most simple methods around.
Hopefully, this article will prove very useful for some. You might have just discovered the method and are in the process of experimenting or you might have previously made some of the above mistakes and now you might want to give it another go.
The very best variant of this strategy is easily LTD Reloaded and that is covered within Total Football Trading.