Diary of a Pro Trader – Issues 33 – 34
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– All his pre match analysis
– How and Why he selected the match
– The exact markets to trade
– When to ENTER and when to EXIT
….AND.. what to do when things go positively and when things don't go to plan
ProTrader started his career and fascination with the financial markets as an Index Analyst at FTSE. He has since consulted for 15 years for some of the top Financial Institutions and Investment Banks in the world, where he specialized in financial instruments, pricing data, trading platforms and risk management solutions. He first started trading sports markets in early 2000, after the introduction and discovery of Betfair. He now trades the financial markets whilst working on entrepreneurial ventures with a focus on sports trading apps and e-commerce. He lives with his wife and young daughter and enjoy travelling (when permitted). In his spare time, he is writing a series of books, enjoys outdoor pursuits with his family, and of course, trading football markets.
Diary of a Football Trader – Issues 33-34
This again is a larger than average Diary issue, because due to the International break (which included three ‘No Trade Days’), it incorporates last week’s football trading exploits. All in all, it includes eleven days of trading activity.
In the last issue, trades were looked at that can appear to be, or are going against analysis and the positions taken i.e. Trade Management – Negative Scenario.
Now we can look at some examples at where trades are in decent, profitable position, and also what actions to take. And don’t forget that this is Trading (not betting), and so there is usually always some action required. As stated previously, you will know that the main markets for my trading are: Match Odds, Goals Over / Under 2.5 and BTTS (both teams to score). The simple reason for this is that these markets are the most liquid i.e. have the most money and are less prone to sudden changes in price, which means that the spreads are tighter and trades can be closed quickly if need be. Therefore, a couple of examples from these trading markets are discussed below.
Trade Management – Positive Scenario
Trading – Over / Under 2.5 Goals
The first example here is from a match just this weekend between Liverpool and Aston Villa. It’s a good example, because it also shows the bumps in the road of a trade that can be encountered. Analysis indicated that this would be a tight, lower-scoring affair than markets (people’s opinions) were predicting. Hence why it was selected as a trade recommendation: because the price offered high-value (2.4). Indeed, right until just before half-time, this match was still 0-0 and the trade was showing a decent profit that could have been taken. However, Aston Villa scored in the 43rd minute, and so the profit level dropped.
However, since this trade is for under 2.5 goals, it’s still looking profitable. It should be remembered, that when trading under 2.5 goals (as I frequently do), we are not expecting a 0-0, and that panic should not set in if a goal is scored.
After the Villa goal, I then came out of the trade slightly to reduce risk (by about 30%). This of course also reduces potential profit, but protecting capital and profits is rule #1.
Timing here was also a detrimental factor, because if a goal had not been scored just before half-time, then the trade would have been much more comfortable, with both teams coming in to the second-half level. However, with the goal, this then puts more pressure on the other team to come out in the second-half to find an equalizer.
As it happens, Liverpool equalized just before the 60th minute. At this point, the risk level was increased since there was still 30 mins to go. However, initial analysis of why the trade was taken in the first place should be remembered. Both teams here now looked content with a draw in this instance, and so after another 15 minutes with no real goal-threat, the trade was closed to bank a profit. As it happens in this example, a third goal was scored in added time (90+ mins). However, if you have a trade for under 2.5 goals, always close it before 90 mins if the score is 2-0 or 1-1. A reduced profit is always better than a loss of any kind.
Trading – Match Odds
This is another example on a different market – Match Odds. It is taken from today’s trading, so it is still a fresh and relevant match that you may have watched or even traded on.
The match was between West Ham United and Leicester City. Again, following analysis, high-value was found in backing West Ham in the match odds market (3.4).
West Ham scored first, which at this point I lowered my risk exposure level by laying of West Ham slightly (at 1.74). This had the effect of reducing my risk on Leicester winning, whilst increasing profit in a draw scenario, at the expense of slightly less profit on a West Ham win. However, West Ham then followed up with a second goal, and now the profit margin was around 20% below the maximum, and so I closed the trade outright. This action may seem conservative, but it guarantees banked profit. This is one of the keys to successful trading: land decent profits when they are available; don’t let them swim away from you.
Another factor in this decision is that once a team is 1-0 up (especially when just the first-half), then their price will fall only very slightly over time in this market, or may even rise depending on the match. Therefore, if you believe that the opposing team could possibly score, then it is best to reduce risk, or close. If you close and the opposing team then equalize, you can always get back in on the trade at a higher price (and repeat).
Considering in West Ham’s most recent matches they have been 3-0 up against Wolves, and yet conceded two goals (ending 2-3 West Ham), and before that against Arsenal (ending 3-3), this was the best course of action.
As it turned out, West Ham did go 3-0 up, yet Leicester scored two goals in the second-half to make it a very nervy last few minutes (not because of the trade – that was already closed – I just wanted West Ham to win the match!).
At the time of writing the previous dairy issue, Trade of the Day recommendations had produced over a 116% return on capital so far this year. As I write this now (just before midnight on Sunday 11 April), this figure is now over 147%. The point of this is to highlight that with the right analysis, selection and trade management, then consistent, high returns are achievable on your own that most fund managers would be envious of. Perhaps in the next issue (time permitting), we can look at comparisons with other investments of interest, such as managed funds, commodities (perhaps gold) and crypto currencies (Bitcoin and Ethereum) for example. It will be interesting to see how they all compare.
Now let’s review the trade recommendations made these last two weeks, looking at how matches and markets were selected, and how the analysis fared in achieving the desired profitable results.
Saturday, 27th March, 2021
Czech Republic v Belgium (World Cup Qualifier)
Analysis of this match pointed to both a Belgium win, with both teams scoring. Therefore, the over 2.5 goals market was favoured at a fair price of 1.88.
Over 2.5 Goals
I took a back position on over 2.5 before the start for £100 at 1.91. As the match progressed goalless, I increased the exposure slightly by laying under 2.5 at 1.33. Czech Republic scored in the 50th minute, and 10 minutes later Belgium equalized. With over 30 mins still play, the trade was in a good position with a third goal likely, and so the trade remained open. However, this did not materialize and ended in a £116 loss.
Sunday, 28th March, 2021
Ukraine v Finland (World Cup Qualifier)
Ukraine go in to this match as favourites, currently priced at 1.72, Finland at 6.2, with the draw at 3.8.
I'm quite in favour of a Ukraine win here, but the price isn't good enough for a trade recommendation. However, given Finland's decent record of away scoring, a both teams to score scenario looks likely.
BTTS – Yes
Before kick-off, I took a back price on ‘Yes’ at 2.14 for £55. It was left late, but eventually both teams scored, with Finland being awarded a penalty, creating a £61 profit.
Monday, 29th March, 2021 – No Trade Day
Tuesday, 30th March, 2021 – No Trade Day
Wednesday, 31st March, 2021
England v Poland (World Cup Qualifier)
England go in to this match as favourites, currently priced at 1.36, Poland at 11, with the draw at 5.7.
Considering that England have only conceded in 1 match in their last 5, and that Poland are without Lewandowski, it's difficult seeing Poland scoring here. BTTS – ‘No' is considered, but the price is not appealing at just 1.67. ‘England to win to nil' is another option at 2.06, but this market is not very established at this point (just over £600 matched).
Depending on the defensiveness of the starting line-ups, under 2.5 goals holds decent value appeal at 2 (evens).
Under 2.5 Goals
I built-up a back position on under 2.5 at average odds of 2.13 for £302. A terrible start occurred for this trade with England being awarded and scoring a penalty in the 19th minute. However, half-time was reached with the score still just 1-0. At this point I began to reduce risk on this trade by laying unders at 1.96. Poland then equalized in the 58th minute (gifted by a terrible error by Stones). I decided to now simply close the trade rather than continue with the risk, which resulted in a £2 profit! However, the match continued late in to the second-half 1-1 until England scored a second in the 85th minute. More profit could clearly have been taken from this match, but with the penalty and defensive error, it was deemed better to just close.
Thursday, 1st April, 2021 – No Trade Day
Friday, 2nd April, 2021
Barnsley v Reading (English Championship)
Barnsley go in to this match as favourites, currently priced at 2.38, Reading at 3.5, with the draw at 3.3.
These teams are sitting in 5th and 6th in the table, with just 2 points between them. Both teams will want to win this in order for play-off positions, and both teams are more than capable of both scoring and conceding goals.
From this perspective, both teams to score looks a decent and profitable trade here at 2.06.
BTTS – Yes
I built-up a back position on ‘Yes’ at average odds of 2.14 for £107. Reading scored in the 34th minute, and Barnsley followed-up with a penalty goal in the 61st, closing the trade for a £119 profit.
Saturday, 3rd April, 2021
Leicester City v Manchester City
Manchester City go in to this match as favourites, currently priced at 1.71 (from a low of 1.51), Leicester at 5.7, with the draw at 4.1.
With both teams having good goal-scoring form, the markets of interest are ‘both teams to score – yes' and goals over 2.5. With BTTS Yes currently priced at 1.93 and over 2.5 at 1.96, the slightly higher priced (and more liquid) market is favoured.
Over 2.5 Goals
Before kick-off I took a back position on over at 1.98 for £102. The match actually reached half-time 0-0. Now in this scenario, there’s four main options available:
- Close the trade outright for a loss
- Partially close the trade to reduce risk
- Increase the position at a better available price
- Do Nothing
I decided that the second-half would see goals, and when in this trading scenario, you actually only need one or two goals early on to bring the trade back in to profit (if option 3 is taken). And so option 3 was taken, by laying unders at 1.41. The second goal came in the 74th minute, and so effectively there’s still 20 minutes of the match for a third goal. Analysis also showed that Leicester score 35% of their goals after the 75th minute. On this occasion, Leicester didn’t score and it remained 0-2, resulting in a £119 loss.
Sunday, 4th April, 2021
Manchester United v Brighton
Manchester United go in to this match as favourites, currently priced at 1.72 (from a low of 1.54), Brighton at 5.8, with the draw at 4.
The 1.72 on Man Utd to win at home is quite tempting, but still does not offer enough appeal for a trade recommendation, especially when upsets can so easily occur (look at Chelsea v West Brom yesterday). Instead, the both teams to score market looks decent value at 2, which has occurred in 4 of their last 5 Premier League matches.
BTTS – Yes
Before kick-off I took a back position on Yes at 2.04 for £50. Brighton scored first in the 13th minute, which is a good start for this trade, because the market already expects Manchester United to score. When they eventually equalized in the 62nd minute, the trade was closed and £51 profit was banked.
Monday, 5th April, 2021
Wolves v West Ham United
West Ham United go in to this match as slight favourites, currently priced at 2.84, Wolves at 2.92, with the draw at 3.2.
West Ham have a lot more at stake here than Wolves. A win would see them go 4th in the league table, pushing down Chelsea, Tottenham and Liverpool.
When comparing numbers with Wolverhampton, West Ham leads its opponent in all categories. West Ham have a respectable 40.3 xG and 33.8 xGA, resulting in a solid +6.5 xGDiff and +0.23 xGDiff/90 minutes.
West Ham are stronger in every area of the pitch, which is why they are currently 7th and Wolves are 14th. Therefore, backing ‘West Ham' offers decent-value for this match from a trading perspective at 2.82.
Before kick-off, opened a back position on West Ham at 2.79 for £300. West Ham got off to a good start and scored in the 6th minute. Just eight minutes later they followed up with a second goal, and so I immediately closed the trade to bank £372.
Tuesday, 6th April, 2021
Real Madrid v Liverpool (UEFA Champions League)
Liverpool go in to this match as favourites, currently priced at 2.54, Real Madrid at 3, with the draw at 3.6.
Now this pricing might be confusing, considering Real Madrid are at home. However, the English Premier League is a far more competitive league than the Spanish La Liga, where Real Madrid are currently 3rd. Considering that Liverpool have only conceded once in their last 5 away games, they should again look to put up a solid defensive display here.
Under 2.5 Goals
Backing ‘Under' offers decent-value for this match from a trading perspective at 2.1.
Due to other commitments I wasn’t able to trade this match. However, with Real Madrid scoring twice in the first-half, and then going on to win 3-1, it was clear that faith in Liverpool to keep things tight were wide of the mark on this occasion. The second-leg on Wednesday is set to be an entertaining tie at Anfield, where once again, Liverpool are priced as favourites at just 2.06.
Wednesday, 7th April, 2021
Porto v Chelsea (UEFA Champions League)
Before kick-off I took a back position on Chelsea at 1.8 for £150. Chelsea scored in the 32nd minute, and 10 minutes in to the second-half it was still 0-1. Therefore to avoid the risk to the trade of a porto equalizer, the trade was closed for a £52 profit.
Thursday, 8th March, 2021
Dinamo Zagreb v Villarreal (UEFA Europa League)
Villarreal go in to this match as favourites, priced at 1.94, Dinamo Zagreb at 4.8, with the draw at 3.6.
It's difficult to see past an experienced Villarreal side here, and with the price available of 1.94, this offers good value on the superior team. Villarreal look undervalued, given their recent form, experience in this competition and the differences between the domestic leagues of Croatia and Spain, that places Villarreal a full 30 positions above Dinamo Zagreb (Euroclub Index).
Before kick-off I took a back position on Villarreal at 1.94 for £150. Villarreal were awarded and scored from a penalty just before half-time. At this point, I decreased the trade risk by laying Villarreal at 1.32. Later in the second-half with the score still 0-1, I closed the trade for an £82 profit.
Friday, 9th April, 2021
Fulham v Wolves
Fulham go in to this match as favourites, currently priced at 2.6, Wolves at 3.35, with the draw at 3.1.
Fulham lead the Premier league in the amount of draws they've had, and looking at the recent form of both sides, another draw here looks quite likely, with 1-1 the favourite score-line (at 7).
From this perspective, the both teams to score market looks most appealing at 2.2.
BTTS – Yes
I took a back position on ‘Yes’ at average odds of 2.34 for £99. An early Wolves goal was ruled out by VAR once again, which frustrated this trade somewhat, since if given it would have made for a more open game from early on. Still confident Fulham would score to help their survival, I increased the position slightly by laying ‘No’ at average odds of 1.09. As it happened, although Fulham had 17 shots at goal, Wolves scored a late winner with the match ending 0-1, creating a £107 loss.
Again, it’s been a busy last two weeks of matches, with Premier League, Championship, UEFA European competitions as well as World Cup Qualification matches all featuring in daily trades.
Overall, the recommendations for the last two weeks produced just under 10 points profit, which includes three no trade days, with average odds still above 2.
Currently, the return on a starting balance from the beginning of the year is over 147%.
High-Light of the Week
It has to be West Ham beating Wolves at 2.86. But please can they stop conceding late goals when 3-0 up!
Low-Light of the Week
A disappointing Fulham that still can’t seem to score even though their Premier League status hangs in the balance. I did think they would push on with some urgency and stay up, but now it looks increasingly doubtful.
Next week we are back to more normality, since the Internationals are out of the way for the time being. UEFA Champions League matches will be covered on Tuesday and Wednesday, followed by Europa League matches on Thursday, before an interesting Premier League match on Friday between Everton and Tottenham.
Enjoy the matches this coming week, stay safe, and stay profitable.
ProTrader started his career and fascination with the financial markets as an Index Analyst at FTSE. He has since consulted for 15 years for some of the top Financial Institutions and Investment Banks in the world, where he specialized in financial instruments, pricing data, trading platforms and risk management solutions. He first started trading sports markets in early 2000, after the introduction and discovery of Betfair. He now trades the financial markets whilst working on entrepreneurial ventures with a focus on sports trading apps and e-commerce. In his spare time, he is writing a series of books soon to be published, enjoys outdoor pursuits with his family, learning Russian and of course, trading football markets.