Did you know that our life is ruled by randomness? If you observe carefully when you commute to your office every day, for example. Look closely at the things that you pass by, the people that you see, and other things. Do you see the same things over and over again? No, right?
It is the same in the stock market investment in the world. Randomness governs pretty much everything and that is especially true when we’re talking about Betfair. With so many underlying conditions that can change in an instant, you can only have a percentage chance to win. Nobody wins all the time; whether you believe that or not.
You could get lucky from time to time, but without a solid trading plan, you’re bound to fail easily.
That being said, I want to make a distinction about strategies and tactics. It seems that both of them are interchangeable in its meaning, correct? But I want to treat strategies mainly as structures that you can build to hedge your profits. Basically, an outline if you will.
Tactics, on the other hand, are the tools. Suppose that you’ve placed your bets and you find that your horse is not going to win. What do you do? You use a tactic where you add to the entry position so that you can exit the trade at the next stop. Also known as the scratch trade, it is just one of the many tactics that you can use on Betfair.
The reason why tactics are so useful is that they are tailor-made for certain situations. With all of the advice out there, you pretty much have a huge toolbox where you can use certain tools for specific jobs.
Another useful tactic would be to use an online trading program’s simulation mode. The simulation mode is where you can practice your Betfair chops without sacrificing real money. This is a perfect way to test if you have new strategies or things that you want to change in your trading plan.
If you still don’t believe me that Betfair and other similar markets are not random, then do this. Fire up your online trading program and use its simulation mode. Create 3 accounts and on each account, place 50 trades. On the first account, trade with 5 pip stops and 10 pip profit. On the second account, trade with 10 tops and 10 pip profits. On the third, use 20 pip stops and 10 pip profits.
The reason why you want to do this is that the results will astound you. In the first account, you’re pretty much going to lose 80-90% of the time. In the second and third, you might win 50-60%. The lesson here is that yes, you can still lose, but the chances are so arbitrary that you cannot really tell if you’re winning or losing right from the get-go.
So, to avoid major losses, make sure that you employ the right tactics for the job. Focus is, of course, another key thing that you must do whenever you trade on Betfair.