Cold trading / Trading order flow – The most effective way to trade on Betfair

so there’s a great way of profiting from
trading on Betfair but it’s unintuitive people generally get confused by it and
most people do it wrong but it’s the method that I’ve used over many years
and I just thought it was worth doing a video to explain specifically how I
trade and that’s what I’m going to talk about in this video please like and
comment on the video below that will allow me to produce better quality
videos and more of them in the future if you’re interested in learning to trade
successfully in sports then why not visit the BET angel’ Academy where we
have more detailed videos so the trick to trading very effectively on that fair
is order flow I trade order flow and you know what is order flow how does it
influence what you do and why is it slightly counterintuitive well the
interesting thing about my journey through Betfair is that when I arrived
on the racing markets I didn’t know anything about racing so I looked to the
markets and it was a complete mystery to me Maiden sellers handicaps different
grades of races different courses I had no perception on what the hell I was
looking at basically so I had to come up with a way of actively trading it that
would allow me to profit at it despite having a complete lack of knowledge now
over the years my knowledge is improved so I’ve got a much better understanding
of different aspects of racing which has helped me improve my trading but
fundamentally I still work on the same basis there are races that are taking
place today that I have profiled already I’ve just sat down racing starts in
about half an hour and already I can see there’s a race
that’s Toaster at 22 to that I think I know how I’m likely to trade it and then
the pattern repeats a couple of hours later so I can do that without any
knowledge of the racing I’m not looking at the horse I’m not looking at the
course I’m looking at the market and saying this is how the market is
probably likely to trade and when people come here
that’s what I teach them I talk to them about the market and the way that the
market behaves not specifically although you know it’s worth knowing a few things
about racing to be able to trade it more effectively but where I started and what
I essentially do is trade order flow and that involves not looking necessarily
the race oh this race it’s at 22 – that’s taking posters often I’ve got a
pretty good idea of how I think it will trade now the problem is at the moment
it’s only done about 46 K in turnover and when the race starts it will
probably turn over about 800,000 pounds so you can see there’s 750 thousand
pound missing from the market alone so I’ve got an idea that’s how it will
trade but I don’t know exactly what’s going to happen because that’s 750
thousand pound that has yet to arrive in this market will begin to form the true
opinion so if I took a position now I said to your heart do this I think I may
probably get it about right but my confidence will grow as the money
arrives the more money arrives the more I watch how the money is arriving and
the influence that is having on the market they’re more confident I will
become so it’s that last five to 10 minutes before the start where most of
my activity takes place you know all the way out here an hour before this race is
due to start there isn’t enough information for me I’ve got a clue as to
what’s going to happen but I can’t say for sure and this is where trading order
flow becomes a little bit harder for people to understand because when you
look at the way that people think they want to yes or a no it’s like is this
gonna go in this direction just tell me yes or no and the fact is when you trade
properly when you’re doing cold trading or trading order flow you can’t give
that definitive answer I’ll use likely possibly on average other sort of words
that I tend to use because you can never say that it’s definitely going to happen
now after you know I’m in my 18th year now I’ll still lose two or three races
out of ten because it just doesn’t happen you know you set up your trade
for the price to come in you start following the price as it comes in and
then it it something goes wrong five grand appears out of no
where the horse runs loose or something else gets back too heavily and you’re
sort of thinking okay I wanted to trade this one but I can’t now and you know it
was gonna do this and something else has changed and the hope and that’s the
skill with it’s the floor and the huge benefit of trading order flow is that
the disadvantage with that is the market is uncertain by its its its nature and
that means that people struggle to come to terms with that you know people are
looking for a black and white answer to say what do I have to do is it not you
know more than once people have said to me just tell me what I need to do in
this market it’s like well it’s not as simple as that you know this is what we
expect to happen this is when it’s gonna happen this is how it’s going to happen
and these are the things you can look for to confirm that but it may not
happen which is exactly what people don’t want to hear but the advantage of
that is that because of that it it makes the the whole process a little bit
tougher and unintuitive but therefore it takes it’s I think it’s the best way of
doing it it’s more profitable because it is a little bit harder to do and very
often when I land I tweeted something the other day saying he won’t find an
easier trade than this one and somebody bounced it straight back into my face
and just said you know are you after timing you know why don’t you tell me
before it happens well the fact is when you’re trading order flow you can’t you
don’t know you can this far out so there’s another race that is two
hours later after the first race the toaster that I’m interested in today and
it’s I think it’s going to exhibit exactly the same characteristics but
there’s only fourteen thousand pound traded at the moment in that market
there’s still another 700 750 thousand pound to go and as that money arrives I
will get more confident and if you look at a charter volume it’s very low the
rate of change for ages and ages and ages and then it accelerates in that
last five to ten minutes why well if you think about it if you’re trying to bet
on a one to five shot or something get very very short odds as an example when
you’re going to place your bet are you going to do it two or three hours before
the start of the race when you have even seen the horse and you know the
conditions may change or the weather may look over you know you don’t have enough
information but the closer and closer you get to the start of the race you get
more information so you the see the horse being saddled up you see how the
jockeys performed over the course of the day how other horses are performed on
the same ground and then the horse comes to the parade ring and they show the
horse off but to the connections and the jockey and everything you get to another
look at the horse there and then you see it going to post you get so there’s more
and more and more and more information coming into the market the longer you
wait so when are you gonna place that 10,000 pound at one to five are you
gonna do it three hours out when none of that exists of course you know you’re
gonna do it at the last possible moment or when you feel confident and that
confidence may arrive at some point in that last fifteen minutes or so so when
you’re trading order flow what you’re doing is you’re picking up on that
information now there may be a reason that somebody is backing it there may be
a reason that somebody’s laying it or maybe somebody tipped it up in a
newspaper somewhere now I went off and researched all of that and looked at all
of that information to try and see exactly what was happening but then it
just dawned on me one day then in fact you know the guy that has ran a system
that knows that horses that are dressed in blue and yellow and like courses that
are left to right on a Thursday you know he’s going to be thinking okay now’s my
chance to place the bet but he still has to place the bet where is he going to
place the bet it goes into the exchange any places the bet so you can see that
influence on the market you can see you know the tipster that’s tipped something
up you can see the comment by the jockey if the horse isn’t looking good in the
parade ring its price will start to drift
now you may actually better see that on the television as well as actually see
it in the market but essentially all of those decisions and processes and like
you know maybe somebody likes the favor because of a certain reason but maybe
somebody likes the second favorite for the same reason so really it’s a battle
then of which one is liked the most how much money of people are going to put
down on the favor or the second favor on the basis that they really like it and
in fact on this occasion you can see that it’s the second favorite that’s
attracting more money so maybe it won’t move as far as you thought it would do
because you can see money’s coming for the favor
but nonetheless you can see that reflected in the market
so what you see in the market when you’re trading order flows the
aggregation of all of those guesses all of those opinions crunch down into a
number and that’s what I trade that’s the way that I trade so of course the
problem is is you know even if you see something like this race that’s going to
go off in an hour’s time or the one that goes off two hours after that I’ve got
an opinion on how I think I’m going to trade that but I can’t be sure until I
see all of the money arriving and you know inevitably if I said Oh back this
one and trade outpost time because it’s going to work really well it wouldn’t
look good in the parade ring the jockeys and a bad runner form the rain starts to
come down the ground gets heavy and the horse is playing up as well and
therefore the price goes in completely the opposite direction so when you’re
trading order flow it’s impossible to Telegraph that out far into the future
right it’s not totally impossible there are circumstances where everything falls
into place there is such thing as a ten out of ten trade and when those occur
and you have all the information and everything lines up perfectly you sort
of want to remortgage the house sell off the wife and kids and stick all your
money on now I’m not suggesting you do that but those trades do occur they just
don’t occur very frequently and generally what happens on a day to day
basis there’s a bit of uncertainty floating around the market so you can
never be absolutely definitely sure all you can do is like have a internal
scorecard which is score from one to ten you know a ten isn’t going to occur very
often and neither is a one and you’re going to be somewhere on that scale so
you can sort of say well it’s quite likely that this is gonna happen or I
think that this is probably going to be happening and then you look for
confirming factors within the market that’s what you’re doing when you’re
trading order flow but of course you know reflect that out into the wider
betting world and people just don’t get it people can’t understand how that’s
possible people are looking for value they’re looking for form they’re looking
at stats and other things like that whereas what you’re doing is you’re
looking at the people that are looking at before and if you get skilled at
doing that then necessarily you’ll do pretty well because you’re just making
an assessment on what’s happening in the market and what goes on in my head is
probably a bit more complex than what would go in your head when you’re doing
this because I can look at the broad sweep of the market at various different
factors and because I’ve traded nearly two hundred thousand
now it’s almost second nature to me so I’m looking at one thing looking another
and I’m thinking okay I you know I’ve seen this pattern before I know what’s
likely to happen but each time I’m only a few seconds ahead of the markets like
you see something coming in you see it gradually weakening and then it stops
coming in and starts heading back out so you know I could lay that if I wanted to
or I could back something else on the basis that that is going to start
heading out those things go through my mind all of the time that’s what’s going
on but you can narrow it down to quite a simple judgment and you know my
suggestion to you when you’re starting out or you’re learning to trade as you
don’t overcomplicate it if you try and do it exactly the same
way that I do which is you’re looking across the entire market for lots of
clues that becomes really hard because you’re scaling oh yeah the favourites
going in now it’s coming out in fact but then the second favorite and in fact I
can see the big order on the third and now the fact and now so you just end up
getting really confused it gets really hard and it will drive you crazy so my
suggestion to you when you’re learning to trade order flow is to go right back
to the basics start at a very very simple vase and you go into a market and
you say okay I’m going to be looking for the favorite to be backed or I’m going
to be looking for the favorite to be laid and then you and that’s all that
you look for you don’t interpret what’s going on down there you don’t look here
you don’t you know put up 10,000 charts and loads of fundamental and technical
indicators you just say let’s focus on this and let’s see what I can learn and
is this being backed you know if I’m looking at all of the activity and
perhaps I’m looking at some chance is it being backed you’ve narrow it to that
really simple process now the fact is that you could probably go 12 races and
not say a single favorite being backed and and you’ll be a bit hacked off but
what I’m trying to suggest you here is if you learn one skill and become good
at that then you start looking for favourites that are being laid and then
you learn that skill and then you start saying is this favorite being back to or
late and then you say based upon what I say on the second favorite how’s that
going to influence the favor and then you expand your skill set from there so
it’s not a question of looking at the marketing just going oh what’s going on
it’s more a question and this is how I started I solved one problem at once at
a time and then added additional layers on top of
and they became more skillful so I can turn up to market and within a few
seconds I get a view and what I think is going to happen then I match that to
what actually is happening and if the two of them match up then I’ll do the
trade but if neither of them match up then I’ll continue looking for an
opportunity and I may not actually find one it’s okay to turn up to market and
say I have no idea what’s going on I’ve looked at the car this afternoon and
there are a few races that I won’t touch because I don’t have an opinion on now
and I don’t think I’m gonna have an opinion on them in the last five to ten
minutes now I will look at them I will see if there’s an opportunity when that
moment arises but it doesn’t mean necessarily all trade it sometimes not
making a loss is by not doing something that you’re uncertain about and again
when you’re learning to trade that’s the sort of process a year through you’re
looking at a market you’re trying to understand if you can understand what’s
going on there and if you can’t understand you’re under no obligation
straight just wait and then a decent trade will come along and like I said if
you’re just looking for the favorite to be backed and you can’t see evidence of
that skip it maybe it does come in it’s not your fault sometimes you can’t
predict these things but just wait for an opportunity that you think you really
truly understand and then execute against that so yeah trading order flow
is odd because people very often don’t understand it you’re not going to get a
clear decision you’re not going to have a yes do this or a no don’t do it it’s
going to be somewhere in between people hate that and it makes it difficult to
describe and also it unites the skeptics as well
because you’ll only ever be at a post to result after it’s happened you can’t
really necessarily predict what’s going to happen you can have a view on it but
only when that money begins to arrive will you really be able to confirm if
your viewers correct and the fact is all of that money arrives really late and
therefore your opinion is going to be based upon that last five or ten minutes
and you’re gonna be so busy trading it it’s difficult to actually offer up an
opinion at that point there are things that work reasonably well and some that
don’t but because of that process you’ll find that trading order flow isn’t a yes
or no decision and it’s something that’s a little bit more dynamic than that but
for all those above reasons that’s why it works so well as well because
people can’t see it won’t want to see it but it’s really essentially this sum of
all of the information within the market and that’s why trading order flow works
so effectively you

36 Replies to “Cold trading / Trading order flow – The most effective way to trade on Betfair”

  1. well reasoned stuff . the hazard of predicting market moves is clear, but can be offset by your – necessarily rapid- interpretation of real time information. I suspect many people are reluctant to do the necessary homework in preparation for trading. Very good video.

  2. You have said something which has really resonated with me in this video because I'm fairly new to learning how to do this professionally and I have the same problem that you highlighted around 12 minutes in. I believe I have quick eyes and a statistical mind that simply over-analyses EVERYTHING I see going on at one time so then I get cloudy judgement. You always ask for feedback for future videos, if possible I'd like to know more about how you handle your internal score card. How much does the money on the second best back price affect your decision on a drift of the third favourite, you know what I mean? I'd really love to learn how you quantify a few regularly occurring things and understand how this affects your view of the market.

  3. This video touches on a topic which I have not seen mentioned elsewhere; the question of skill. Watching videos of good traders, demonstrates that they possess a high degree of skill, in the same way that watching Messi dribble a football does.Not many would expect to be able to develop the dribbling skills of Messi and I suspect that we all have our own individual "ceilings" when it comes to developing trading skills.

  4. Thank you Peter. I attended a training course with you at Hook quite a few years ago. The cost of the course was about 300 quid and travelling and accommodation costs roughly another £150. Sadly, I left feeling I had actually understood very little of what you were imparting that day. I have learnt so much more from this video and continue to do so from all the other excellent video's you produce. The type of information you give here is just what I need. It puts what you do into context. Little snippets like you still lose on two or three races in ten. Simple advice on starting out, by just looking for favourites that shorten up or concentrating on those that drift…… I like simple and look forward to more video's of a similar nature.

  5. Howard Marks (his writing is great btw) would call much of this "2nd level thinking". 'you're not thinking about the form, you're thinking about the people who are thinking about the form'…and assigning chances to their varying interpretations and the ensuing distributions of price movement. Peter is a highly skilled Bayesian, as are most profitable traders, many don't know it..

  6. Have been mulling over getting into trading using Betfair for some time now. But I do think the best way is small group courses and mentoring, rather than just watching videos. Such a shame that Peter is not offering any courses at the moment- apart from an "Advanced" course which seems to be by invitation only. I bet a lot try trading and lose their way….

  7. Hi Peter. I'd be very interested to hear your thoughts on the difference between 'genuine' money and traders money, and how you make the distinction between the two.

  8. Finally a video about order flow! I remember complaining why you never talk directly about it, because it's obviously the most important thing. The mere realization that "order flow is king" is an edge in itself. Even in inplay footy markets where guys like Rebelo and Psychoff brutally abuse the time decay mechanics of the markets. If I may be so bold Peter to say that IMHO your execution is not on par with your actual reading of the order flow, seems a bit too casual(maybe not casual but the right word escapes me atm) judging by your videos and results. I'm of course talking about your everyday bread and butter meetings, not about bigger meetings where you bigger results impress everyone but are ironically actually the easiest markets to scalp/trade. In my humble opinion by far the best order flow trader that I've had the pleasure of witnessing is Tomas Paul (close friend of Mr. Geek, that Tomas), the man's ability to ride the flow in difficult markets is nothing short of art.

    Honestly this may be your best video yet, it contains a clear formula for newbies to follow so it will probably be very helpful to a ton of people because they don't have anywhere else to learn these things from. Nicely done, KUTGW.

  9. I disagree. The most effective way to trade (horses at least) on Betfair, is to do the exact opposite of whatever I've done. I back? Lay it till the cows come home. I lay? Empty your account backing it.

    It often seems as if my £50 back / lay bet is like the "trigger" for the house of cards to collapse. Imagine it's been going up and down one tick for the last hour. I come along, lay the horse with the view to drop a back bet in once matched but no, at the moment my lay matches, someone turns up with a £999,999,999 back bet and the price drops 10 ticks

    Sorry – had a particularly poor day trading, rant over!

  10. The psychology of the trader is so important.
    A very good Bookmaker explained to me that he forms a market around the favourite and analysis if the horse will be backed or layed.

  11. I have a very unique system i pick winners from but manually it takes about 15 minutes to work out one horse race. I'm looking to have a site built to cut my time and effort down to seconds but £10k is a little out of my reach. If you fancy a chat maybe you could help me along the way. Proven winners time after time. No heavy going to worry about, too much weight, left handed track or bad draw needed here to factor in, just hardcore figures. John.

  12. Is it possible to see the total amount of money entering the market for the first time? Back and lay, rather than just the matched turnover which obviously can be the same few quid coming in and out of the market.

  13. hi, have you ever traded Darts. I was watching premier league darts tonight and there was swings in price movement. In a match between Michael Smith and Raymond van Barneveld Michael Smith was available to back at 3.05 and suddenly the price drifted to 28. big movements like this happened fairly regularly throughout the match and indeed all the other matches that were played.

  14. Peter can I ask a question hope this makes sense with small starting bank is it better to only make trades on horses that you think will go down i.e. Backing then Laying In price rather than reverse

  15. One of the best video's I've seen PW put together. Been using order flow for a few years now. For me the core elements are:
    Preparation (what races do I want to trade if my core criteria is met).
    Execution (only trade the facts, trade what I see not what I think).
    Volume (where the opportunity arises open and close as many trades as possible)
    Successful order flow trading is undoubtedly a skill, but over time and with practice it can be learnt

  16. Please can you tell me what you are looking for in the cards that tells you that this is a race you woud be interested in trading (or not interested in)? Thank you.

  17. If there's only 14k or 40k or whatever traded in a market, what are you basing your opinion of what the markets going to do on? I don't understand, prices are erratic, sometimes the favourite will be supported sometimes it will drift, what are you basing your ideas on… it can't be order flow when there's very little money in the market so far

  18. I don't know how he got all the winners as all bookmakers manipulate the market to their own he has some other way that he isn't saying.

  19. I am just reading "Trading in the Zone" and to sum it up in one sentence. When you enter a trade accept any thing can happen, if you are not prepared to accept this uncertainty you will struggle. The whole book in my opinion is a brilliant read, l would recommend it to anyone trying sports trading.

  20. Hi Peter, I recently watched this video and found it very interesting, I feel you might want to look at a more detailed narrative highlighting how order flow works in particularly with regards to the racing markets. I guess understanding when the real money hits the market is critical to this type of methodology. I think should you demonstrate how this works and how you identify when REAL backing activity is seen and how to trade that flow would be very insightful.

    People are generally looking for a black and white answer but in reality they only need to just need to be able to understand when that flow can be relied upon rather than a little bit of early money or people taking out the weak prices either side of the ladder only for the real money to hit and the true colours of the market can be seen.

    Best Stuart

  21. 16 minutes summary

    Order flow works effectively according to PW
    No other nuggets & still dubious about these 'traders'/marketers

  22. Isnt this essentially just following what everybody else is doing in the market or is there more to it than that?

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