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How to Get the Edge and Win at Online Betting Exchanges

By: Andrew Kasch

The evolution of the online betting exchange is the answer to a struggling speculator's prayer. Whether you seek fast action as a daytrader or prefer the slower-paced analysis of finding pre-event value plays, this environment can be the solution. It doesn't matter if you are only interested in the daily financial closings, or if you are open minded enough to speculate in any market where you can get an edge(hopefully you find yourself in the latter camp). The ability to participate in a diverse, well-run exchange where participants freely match wits among themselves removes many of the obstacles to successful speculation.

There are several reasons for this, but the most obvious is that middlemen (such as brokers) have been taken out of the trading equation! No broker taking a commission from your side of an opened trade, no broker taking a commission from your opponent's side of an opened trade, no broker taking a commission from your side of the closed trade, and no broker taking a commission from your opponent's side of the closed trade. That adds up to a whole lot more money left on the table, and hopefully you already understand why this makes all the difference in the world.

Yes, there are exchange fees. Betting exchanges are not a charity either. However, these fees are minimal. Compared to broker commissions, they are like an anthill against a mountain. As a smart trader you will be paying less in exchange fees than the average player anyway, as you are about to learn.

Some of the better exchanges employ Market Makers to provide contract liquidity. The spreads are reasonable, and any quote that has what you think is too large of a spread can be exploited by you for profits. Not only can you "play market maker" by stepping in front of the bid and ask prices, but as an individual you can become an official market maker yourself if you choose. Try doing that in the stock or commodities markets!

You will need to make some adjustments from the kind of trading you are familiar with. ( Fortunately the biggest adjustment is that you can now trade with an edge instead of fighting one.) It's going to take a little getting used to the marketplace if you are a newbie. Keep an open mind and be willing to put the past behind you and explore new markets.

Most commodities are not available to trade, even at the larger betting exchanges (Betfair, Tradesports, Hedgestreet, and Matchbook). You can trade Oil, Gold, and the major currency pairs - and of course stock market indices. You must trade these in the formats that they are offered in. Stock indices have Intraday, Daily, Weekly, and Year End contracts, while most currencies and commodities only trade via Year End contracts. Some markets see higher volume than others. My advice is to stick to the higher volume contracts so your positions will be liquid. This way you can get out with a profit when the market moves in your direction, and cut your losses short when it doesn't.

If daytrading is your thing, you can do that with the stock indices and also sporting events. You will likely find it much easier to open good intraday positions on in-running sporting events than on the vehicles you were daytrading before.

For all you may be giving up with your old broker account, you are gaining more with a betting exchange account. There are always new contracts being added - fun markets where you can clearly see how to get an advantage. For example, you can wager on the release of major economic numbers that impact the financial markets directly. Current events such as the passage of new laws or appointments of governmental positions. Entertainment awards and weekend box office receipts. The outcome of high profile court cases, international affairs, and hurricane paths. And of course every major sport including golf, NASCAR, and tennis.

They are always coming up with new stuff. For anything that people have an interest in the outcome of, a futures contract can be (and often is) created at the betting exchanges. Enter and exit your positions wisely, employ good money management rules, and watch your account balance soar.

Article Source: http://www.articlesinsight.com

Andrew Kasch is the author of the popular ebook "How to Milk the Tradesports Cash Cow" which teaches winning strategies for profitable speculating at Tradesports.com. For further information go to www.winontradesports.com

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