Trading the unexpected - how to react when your preferred outcome does not happen - Lets

Twelve months since Liverpool played Chelsea at Anfield.  Most pundits where calling the game a done deal for Liverpool to win.  This seemed reasonable considering Chelsea’s form and recent poor performance.  As far as trading the draw result on Betfair the preferred result would have been for Liverpool to score early in the first half.

BANG, Chelsea scored in the 45th minute, totally not expected. Stephen Gerrard slipped and allowed Demba Ba to steal the goal.  So, decisions decisions, how should a trader react to this scenario?

A trader’s strategy, in part, will depend on the caliber of the teams playing.  Also it can help to watch the match on TV if you have a working knowledge of the beautiful game.  In the previous post it was mentioned that the game was quite equally matched, even though, Liverpool where priced as favourites and Chelsea the underdogs.  So how did the odds react?  At first the draw odds increased slightly making the trade profitable but only just .  This is because Chelsea are a good team and they have a good record of defending after scoring.  If is was an inferior team the draw odds would have decreased because it is likely that the favourites will score the next goal to make it 1 – 1.

Observers of the game will know that Chelsea should never be under estimated.  In case of traders who don’t really follow Premiership football Chelsea’s caliber can be seen from their league position.  Trading odds on Betfair doesn’t require us to be football experts.

When to exit?

Should I exit the trade or hang on to see what happens? Really this depends on your style.  There is no hard and fast rule.  Knowing Chelsea are a good team and can defend well, personally, I would want to hold tight and see what happens.  Preferably watching the match.  Mentally setting myself a time limit for exiting the trade which I would stick too rigidly.

That’s all there is too it really.  For risk conscious traders or people not watching the match, it would be safer to exit more quickly.  In case of other scenarios, e.g. where the odds do shorten making the trade negative, a trader can exit according to their risk management strategy, which should be decided upon in advance, for this sort of scenario.  For instance, if the loss is more than a certain percentage of the trading bank, or, over a certain figure, you could hang on until it is more acceptable.  The downside is if the unexpected is compounded by, well, more bad luck and the other side score making it a draw.

For more Betfair trading strategies and advice on trading the draw in particular sign up to the right hand side and you will receive a email explaining the basics of a trade through to more detailed techniques.  Well worth it because it’s free.

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