Last Saturday’s diabolical first attempt at trading on Betfair has obviously led me to rethink my plan of how I will make The Experiment work for me.
When I initially came up with this crazy idea, I planned to gamble on Betfair using my unique staking plan and by backing multiple horses in every race (Dutching). After learning more about Betfair and in particular trading, I then decided that I would like to learn how to trade on Betfair to enable me to earn enough from doing this instead of gambling. I still intended to use Dutching but only to supplement my income from trading.
Clearly, last Saturday showed that no matter how much you read about trading and watch tutorials or trading examples, trying to do it in real-time is more difficult than I thought it would be. Therefore, I am not going to be able to make enough from purely trading on Betfair over the next 12 months.
Therefore, I plan to go back to my original idea of using Dutching to earn money on Betfair. However, I will continue to trade on most races with very small stakes and then slowly build up my stakes as my knowledge increases. Ultimately, I will use trading to hopefully reduce my exposure and risk of Dutching.
So, what is Dutching?
As stated in an earlier post, Dutching is when you calculate an amount to back on a number of selections that will return a specified amount no matter which selection wins.
The main advantage of Dutching is that it allows you generate a very high strike rate. Past experience has shown that I can achieve a strike rate of around 70% from using Dutching.
Obviously, backing a number of selections in every race will mean that you are backing at very low odds. In most cases, you are backing at odds on, sometimes heavily odds on.
Some people try to say that laying horses to lose on Betfair is the same as Dutching a number of selections to win but I see these 2 things as vastly different. Dutching is better for me simply due to the fact that I choose the horses which I want to run for me.
One problem I have with laying horses to lose is that you end up getting other horses running for you which you think can’t beat the horse you are trying to lay. Hence, you miss out to some extent. Obviously, people will say you can lay the other horse also, but lots of times I don’t want to lay the other horse as it may win and cost me a fortune.
An example maybe illustrates this best. A four horse race may be taking place and the horses odds are as follows:
Horse 1 – 2 (Evs)
Horse 2 – 3.5 (5/2)
Horse 3 – 7 (6/1)
Horse 4 – 15 (14/1)
Say that I think that this race is between horses 1 and 3. I don’t like 2 and I think 4 should be a higher price.
So, I want to Dutch horses 1 and 3 for a profit of £10. I can quickly see that I need to place a bet of £15.18 on horse 1 and £4.42 on horse 3. Assuming a commission of 5%, if either of these horses wins, I would get a return of £29.59. Hence, I would get a profit of £10.
I did have the option of laying horse 2 and 4. However, I think 4 may pop up to win but I wouldn’t back it at that price.
So, I could lay 2. To win £10, I would lay 2 to lose £25 (ignoring commission). The issue with this is that I have horse 4 running for me at 14/1. I don’t want that horse running for me though, so by laying horse 2, I effectively get the other 3 running for me.
Another reason for me using Dutching is that I find it easier to work out how much to bet on horses rather than lay on horses. In addition, Bet Angel Pro has a Dutching function which I can use (although a minimum stake of £2 per horse still applies, so I can’t use this function until I increase my stakes later on during The Experiment.)
Another thing I like about Dutching is that you can use trading to offset the risk of Dutching. Once I have decided which horses I want to Dutch, I can then hopefully use my trading skills to generate risk free bets on the other horses which I would like to back but haven’t been able to. This will reduce my risk (as long as I can trade to generate a profit).
At first, I am going to begin Dutching trying to win £2 every race. I will also begin trading using £2 stakes. As I get more comfortable with Dutching and Trading, I will increase my stakes accordingly. One point that I should make is that Dutching usually means that I cover the favourite in most races as well as other runners I think have a decent chance. Therefore, my trading will be on horses which are higher prices, so my £2 stakes are not as low as they sound as I can still generate decent risk free bets even using £2 stakes.
My plan is therefore to bet on every single race. Even when I am unable to trade on races, I will be able to Dutch. Clearly, once I know how trade to effectively, I can then use this to reduce the risk of Dutching.
As stated previously, I will be using my own unique staking plan. I don’t want to go into any great depth at the moment about this plan as I have developed this plan over time and I haven’t shared this with anyone, but I have carried out extensive testing compared to other staking plans and it seems to work just as well. Like any decent staking plan, if you a very large number of consecutive losers, you will lose your bank. However, this risk should be reduced somewhat due to my knowledge of horseracing and my ability to read form and select winners on a consistent basis.