Start as you mean to go on.

The start of a New Year is often a perfect opportunity to wipe the slate clean, dust yourself down and hit the refresh button and that’s exactly how I am approaching 2010. So, like most things, my trading adventure is set to start from the beginning again, with the results from 2009 a distant memory although hopefully the lessons learned will remain stored.

The plan for 2010 is very simple. Just enjoy trading, look to improve wherever possible and move away from financial objectives. Hopefully this blog will document all that and any lessons I learn which I feel would be of interest or value to others.

I traded two events today. The first was the Cambridge v Stevenage game which was curiously in play despite not being televised. All I did whilst cleaning out rubbish from old cupboards which had accumulated dust over several years was look to trade the match odds market before the kick off.

Given that I knew nothing about the sides, or any team news, I looked to be as cautious as possible and eventually settled for a green book of around £9 on each possible outcome. With hindsight, I could have taken advantage of the swings slightly more but trading on an event you know little about is notoriously risky. For example, a key player may have been ruled out and therefore a 2 or 3 tick swing could be irrecoverable as opposed to being a traditional punting swing. Stevenage were the victors, and my account profited to the tune of £9.02 before commission; £8.60 afterwards. Obviously a small amount monetary, but it was a pleasing win to start 2010.

This is something that I may look to do more of going forward. It is not really suitable for Premier League matches given the volumes natched, but if you are confident in your trading skills, I would imagine that it could be a worthwhile endeavour if combined with other activities, although I would guess that you are prone to late breaking news creating a large swing which could counter two or three wins.

The other event that I traded was the Sale v Harlequins Rugby Union match. I consider my forte to be in Rugby League trading and there are clear parallels between trading the two sports. Trading Rugby Union was something that I considered looking into at the end of the Super League season but never got around to doing. I also need to state that whilst I am a huge Rugby League fan, I dislike Rugby Union as much and have never watched an entire match.

Before the game, I had accumulated a profit nearing the amount I achieved on the Stevenage v Cambridge game, through similar strategies. The market benefited from good liquidity, and could have been a trader’s dream as the Sale price wobbled between 1.51 and 1.57 for no reason other than incoming money.

I also looked to monitor the market in play whilst I did other things but without a knowledge of Rugby Union as a game and without watching it, it’s hard to accurately comment on the price swings. Nonetheless, there were some clear similarities between the market and that which you would expect in a RL game, although I was amazed to see the draw as low as it was early on but it was the end of the game which reminded me of a Super League game and provided the greatest draw parallels.

With twenty minutes to go, and a 12 point lead, Sale, who were the favourites pre match, could be laid for 1.06. Now, tries in Rugby Union are less common than in League but this seemed very much a RL price. It only ever takes one piece of random luck such as the bounce of a ball from a kick, an inexplicable knock on, a curious refereeing decision, a desperately poor attempt at a tackle or a moment of genius from the attacking side to score a try. And obviously if one is scored, the market then reacts to any second attack from the trailing side, knowing that another score could create a flip flop on the scoreboard which, late in the game, is difficult to overturn.

However, as I wasn’t following the game, I didn’t get involved and am not recommending that 1.06 shots with 20 minutes to go in RU are an automatic lay. Rather, I am using this situation as support for my general theory of laying 1.1 in Rugby League.

The ending of the game would also provide excellent support as to why I love to trade the draw and how profits can be made.

Firstly, and it should be acknowledged that only pennies were matched, the draw drifted out to 100+ with a 12 point lead which in RL terms is two tries and one goal. In such a situation, I find it preferable to back the draw as opposed to merely laying the favourites. Whilst you could have laid the favourites 1.06, backing the draw at anything over 70 would be better in my view.

Obviously the chance of the draw at this point is less than the trailing side winning, but would it really be three times less likely (To achieve a near 100% book at 1.06, the trailing side would be around 23 if the draw was at 70) and even if it is, if you are confident of a turnaround then you should also factor in the fact that a try scored would bring the draw down allowing you to trade out whilst an unconverted score would mean that one more score could only allow for a draw or a win to the leading side.

So that’s one advantage to backing the draw in this situation.

As it was, a converted try was scored which brought the gap to a try and the draw was still available in the 20s. However, at times like this, a further score can obviously kill the draw and as a result, the liquidity on the draw drops from poor to very poor which then allows for greater gaps between backs and lays and quite often people who for their own reasons are desperate to get matched will and do take prices that do not represent anywhere near value. I suppose that getting matched in such a situation is akin to gambling, but if you are doing it regularly over a season and look to subsequently trade out any red, then over the long term your risk is massively diluted.

As an example of this situation working, in the St Helens v Wakefield game from last year, I got matched at 40 in a 2 point game with 2 minutes to go for £10. A penalty was subsequently awarded and the draw priced caved to 2 whilst there was also opportunities before hand to still lay off at around 20 and eliminate your red on the teams. The kick was actually missed but by that point I was already nicely green on every outcome.

In this game, I got matched for £2 at 34 and 42 before trading out between 15 and 20 and split my green accordingly not having a clue what the true prices should have been, before walking away with £14.50 before commission.

Obviously, this is all very easy to say. The difficulty is in knowing and recognising the best opportunities and that is something you can only learn from watching the game and the market. Not every 1.06 favourite is a lay, and some 1.06s are more attractive than others and that is the split second judgement that a trader has to make.

Thankfully, I’m better in RL than I am at Rugby Union!

Nonetheless, I managed to profit £22.42 on a day when I didn’t sit down and trade. This time last year, I’d have been very happy to have made such a profit on a day’s trading without any Rugby League.