What is "pre-match trading?"
It's simply trying to predict which way the odds will move before a match, and locking in a profit by either:
- Laying at a betting exchange
- Covering the bet at favourable odds at a bookmaker
Example Trade
In the South Korea vs Mexico game, I placed a back bet on Mexico 4hrs before kick-off, with the expectation that Mexico's win price would fall further closer to KO time.
As you can see from the screenshot above, in this case I was right as Mexico's price steamed 5 ticks from 1.78 -> 1.73, where I laid off (bet against Mexico winning) my original stake in order to give me a "free bet" on Mexico. Let's do the maths to see how much I could make:
- Backed Mexico with £400 @ 1.78
- Laid Mexico with £400 @ 1.73
If Mexico win...
(£400 * 0.78) = +£312
(£415 * 0.73) = -£292
Profit if Mexico win is sum of above = +£20 (minus commission)
If Mexico fail to win...
-£400 for the back bet
+£400 for the lay bet
Profit = £0 (breakeven)
Note: I would recommend the Back/Lay feature on http://www.arbcruncher.com/ to calculate potential trading profit.
Summary of example trade
In the above example I was confident that Mexico would win and so I left it as a freebet. However in most cases I would actually hedge (lock in a profit) on all outcomes. If I had hedged in our example, I could have ensured a £10.98 profit before the match even started!
You may be thinking, "is this guy crazy, risking £400 to win a measly ~3% of his investment?"
To which my answer is: The £400 was never at risk! Had the price gone the other way, my exit price was 1.81 (3 ticks) where I could have hedged for -£6.30. Therefore, as long as I am disciplined and stick to the plan, my actual ROI here was 317% (174% if I hedged)!
Key things to remember when pre-match trading
- Always ensure a positive risk-reward ratio. By this I mean the lowest I would go is 1:1 (evens) where I have to be right more than 50% of the time to profit. Even then I would only take this ratio when I'm very confident. Try to aim for a 2:1 risk-reward ratio so your strike rate only needs to be greater than 1 in 3 to profit.
- Always define your stop-loss and target price before placing the trade. Remember you're defining these for a reason, and you must stick to them! While the target price is just a best-guess guide (targets can be exceeded or not quite reached, that's normal), the stop-loss must be adhered to.
- Be organised. One sure way to lose money when pre-match trading is to forget to close your trade and let it run in play. Never let this happen. Set multiple alarms if you need to!
- Monitor the market periodically. There's no need to obsess over your trade - checking it too often is pointless. However, you should check to see if your target/stop-loss has been hit once every 2hrs or so (more frequently as it gets more volatile closer to KO).
- Always have a backup plan. What if your computer/internet connection dies and you can't close your trade? Do you have a smartphone with mobile data as a backup?
Pre-match trades for the Round of 16
Now that we all know what pre-match trading actually is, let's take a look at some of the upcoming games in this round...
2nd July 20.00 CET: Belgium vs Japan
Selection: Over 2.5 @ 1.98
Target price: 8 ticks @ 1.90
Stop-loss: 4 ticks @ 2.02
Risk-reward ratio: 2:1
Reasoning:
- Group stage performances: Belgium scored the most goals of any team in the group stages (9) and 2/3 games went O2.5. The game that didn't was vs England where both teams played their 2nd XIs, so we should discount this (the general betting public most likely will too). Japan also managed 2/3 O2.5 games in the group stages.
- Other games in this round have been high scoring: At the time of writing, the two round of 16 games played so far have had 10 goals in total! In reality it shouldn't have any bearing on this game between two different teams, but I believe the betting public will be influenced by this. If today's games are both 0-0s then obviously that will negate this goal-positive perception.
3rd July 16.00 CET: Sweden vs Switzerland
Selection: Sweden (Match Odds) @ 3.20
Target price: 20 ticks @ 3.00
Stop-loss: 10 ticks @ 3.30
Risk-reward ratio: 2:1
Reasoning:
- Group stage performances: Sweden were one of the surprises of the group stages, winning a group that had Mexico and Germany in, and beating Mexico 3-0 in the process. Switzerland on the other hand earned a fortunate draw against Brazil but conceded more goals than expected, including 2 against Costa Rica (although they only needed a point to qualify).
- Suspensions: Switzerland have both Lichtsteiner and Schär suspended which will weaken their defence. Sweden have Sebastian Larsson injured which is a loss, but overall I'd say Sweden's manager will be the happier of the two.
- Chart trend: The price on Switzerland has already moved from 2.72 -> 2.84 which is an indication that this trend may continue. See below for what appears to be the start of an upwards trend on Switzerland's price. If Switzerland's price continues to go up, Sweden's is likely to come down.
3rd July 20.00 CET: Colombia vs England
Selection: England (Match Odds) @ 2.16
Target price: 16 ticks @ 2.00
Stop-loss: 6 ticks @ 2.22
Risk-reward ratio: 2.67:1
Reasoning:
- Patriotic betting: Betting is a big part of English culture and the government doesn't tax winnings, while in Colombia online betting is illegal. Additionally, England's population is 5m greater than Colombia.
- Historic price movements: Historically, the price for England to win tends to steam, possibly due to the patriotic/cultural factor mentioned above.
- Group stage performances: According to InfoGol, England outperformed expectations for chances created by 2.3 goals, but conceded 0.9 more goals than expected. Colombia underperformed by scoring 0.9 goals less than expected and conceding 1.1 more goals than expected. I'm sure the red card in the 3rd minute against Japan didn't help, but even so, this is something that may count as a negative for them.
- Chart trend: The price on England has already moved from 2.3 -> 2.12 which is an indication that this trend may continue.
The table below is a great resource, which shows the performances of all World Cup group stage teams in the form of Expected Goals (xG):
[Source: https://twitter.com/InfoGolApp]
I hope this content was interesting to you! I believe it's the first pre-match sports trading post on Steemit? If not, please direct me to other similar posts as I'd love to connect with fellow sports traders :).
I'll post the results of these trades in the next couple days. Until then, happy trading, betting, or simply watching the World Cup :).
Adam (acelad)
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