What Is Swing Trading On Betfair?
If you are pretty new to Betfair Trading and come from a regular sports punting background then it is no surprise that all the terminology can often confuse people. I do get many emails from people asking just what some of the jargon means and often I get people asking what a “Swing Trade” is.
What is SWING TRADE exactly?
Wikipedia defines Swing Trading as “Swing trading is a speculative activity in financial markets where a tradable asset is held for between one to several days in an effort to profit from price changes or ‘swings’.”
However, Wikipedia are referring to the financial trading way of swing trading. On Betfair it is a little bit different. Especially, as it is rare that any sports event will go on for “one to several days”.
The best way to think of a swing trade on Betfair is whereby you are looking for a “swing” of odds to happen so you can lock in your trade. For example, Back @ 4.5 then lay @ 2.5 after the odds have swung for whatever reason. The reason could be a goal in football, a break of serve in tennis or a wicket in the cricket. As long as you know why the odds are moving then you are already on the right path.
This is not to be confused with “Betfair scalping” which is where a trader will be looking for really small movements and a typical scalp trade would involve a Back @ 1.98 then lay @ 1.96 and so on.
With a swing trade you will be looking to gain many more ticks per trade although there is no real definition of how many ticks actually make a swing trade. I would say if you are going for anything more then 10 ticks per trade then you are looking for a swing trade but it all depends on the situation.
The Benefits Of Swing Trading
With swing trading you will actually find it is the most common form of trading. Something like the “Lay The Draw” is a swing trading strategy whereby you need a goal to make the odds swing.
The main benefit of swing trading is that it is not as intense as scalping. A swing trader can be in the market for minutes, hours or even days depending on the type of market he is trading. A scalper is usually in and out of the market in less then a few seconds.
Also, when swing trading you can set your own risk-reward ratio much easier which helps you to become profitable much quicker. For example, I might work out a swing trading strategy where I take a profit if it goes 10 ticks in my favour and take a loss if it goes 8 ticks against me. This way I know that if I get my trades correct just over 51% of the time then I will make a long term profit with my method. This can then allow you to plan and pick your moments better. With scalping you are often taking 1 or 2 ticks at a time and a potential HUGE move against you can undo hours of hard work.
The negatives with swing trading is that you then need to work on finding a strategy that works. That is where the hard work begins. Also, some novices will struggle with the discipline of swing trading since when the price moves against them they might let it run for longer hoping it comes back, only to see that screen go red and red some more.
You will find examples of swing trades in any sport on Betfair and this is probably how you trade already. So if you were looking for a way to define your trading style, then you found it! 😉
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