trading

What is a Structure, Stop, and Selection on Betfair?

Introduction

Betfair is one of the most popular betting exchanges on the planet. It has a lot of sports markets to choose from and you can get wealthy if you have a very solid investment plans.

That being said, there are three terms that you need to know first before you can really participate in this activity without losing a lot of your capital. These terms are the structure, stop, and selection. I will further discuss these terms down below, so please read further.

What is a ‘Structure’?

There are some traders who have been actively trading on Betfair for quite a while that will say that “you can be successful if you have some proven strategies. First of all, there are no strategies. What they refer to as strategies are simply some structures that are in place so that you will not be losing a lot of your initial capital.

The market is only concerned about two things: mean reversion or continuation. The former talks about price equilibrium, given a certain time period and the latter are concerned about price movements trending forward (either up or down).

People call it as strategies probably because they’re accustomed to it. But, since we’re now using more automated means of trading, calling it a strategy is not really suited to this. That is because if you’re setting up an automated trading program, you will find that there are certain parameters like “if A is there, then do B”. That is why calling it structure is much more appropriate in these situations.

What is Selection?

Selection is simply the art of choosing. For instance, when you fire up Betfair trading program, it will ask you which sport you’re willing to trade on. For me personally, I trade on horseracing because there are a lot of people in the space and it is quite exhilarating to trade on the platform.

Choosing the right trades, placing the correct bets, and so on will ultimately decide your fate on Betfair. It is not from any ‘strategy’ or from any set structure; it actually comes from observation, experience, and by looking at the present.

You can best choose which options to take by looking at the screen and looking for different markers. Your next steps will be crucial. Should you place a lay or should you back on a bet? Should you hedge or should you create stops? The decision is up to  you.

What are Stops?

In the stock market and on the betting exchange, a stop (also known as a limit order) is where you buy or sell a stock at a certain price, provided that the market reaches a certain threshold.

In other words, you continue on with a trade and you will lose only a small portion of your profit when you do so (compared when you do not make a stop at all). It is important for you to know that stops have their uses as well, but you also have to know that its use is for a “case-to-case” basis only and should be well thought out before doing so.