Is Good Sports Knowledge Important To Sports Trading?

A question I often get emailed to me goes along the lines of “Can I still profit from trading xx sport even though I do not know much about any of the players etc?”.

There would have been a time about ten years ago when I could have told you that knowledge of sports themselves is not so important when trading sports since the markets were still maturing and there were plenty of easy edges to be found.

However, these days my answer is unequivocally that you NEED good knowledge of any sport you trade and the more knowledge you have the better.

The fact of the matter is that it is getting harder and harder and almost impossible to find inefficiencies within the markets on most sports and now the only real way to get an edge is by having a good knowledge of that sport that will allow you to spot good opportunities in-play.

These days you are trading against robots that are using statistical models to offer you the “true” prices of most events. This is only going to become more and more efficient in the future which means you need to work harder to be able to spot good value opportunities when they arise and to have the courage to take them.

Spotting these opportunities can only be done by having vast experience of the markets and the sport itself. Especially on sports like Tennis where you are only relying on one individual.

But how can you beat an efficient market?

If the markets are so efficient then how can we beat them? By spotting the times when they might be wrong is how.

For example, we all know the courtsiders at a tennis match are ahead of us trading at home and they will move the markets based on each point scored to give us the “true” price at that particular time.

So if Federer has just taken the first set in a match against Andy Murray and the markets have him priced at 1.60.

If we accept that this is the “true” price this means that from this point Federer will win this match 66% of the time and if you were to back him at this price all the time you would win 66% of the time and probably break even or even have a small loss due to commission at the end of it.

So the skill you have to develop is identifying the 33% of the time that Federer will NOT win and backing the other player in these situations.

This is obviously quite a simplistic example since in-play trading can produce many different scenarios but I am sure you get the point.

At the end of the day, you can only identify these situations by having a good sporting knowledge and knowing many of the teams and players inside out.

I hate to break it to some but the days of being a profitable lazy trader on Betfair are OVER!