Luke, what is sports trading?

Luke, what is sports trading?

I think it’s time for a FAQ type post. I’m often telling people what I do, I can tell that for the most part, its hard to grasp verbally. Maybe written with some pretty pictures will help people to get their heads around it. Hopefully I can dispel some some of the common beliefs that just aren’t right along the way too.

Q. What is sports trading? 

A. Sports trading is trading the fluctuations in prices before and during the event. Trading the movements of the odds allows you to build whats called “a book” or ledger. Much like a bookmaker builds a book in any of the events they take bets on, sports traders can build their book by backing or laying a particular runner in an event.

Q. What is lay betting?

A. When I “lay a bet”, I’m essentially playing bookmaker. This means someone has a bet with me on a particular runner in an event and if that runner wins, I need to pay out the person the worth of the bet. If the runner loses I keep the amount bet by the person, just like a bookmaker would.

What is lay betting?
Lay bet overview. You are playing bookmaker.


Q. Whats the difference between what you do and a bookmaker? 

A. There are subtle differences, but ultimately there are a lot of similarities to what we do. The biggest difference is obviously the volume, solo sports traders like myself have much smaller bankrolls than your big corporate bookies. As such, the size of the bets taken and placed are much smaller. I’m able to dictate from the get go, how much risk I have on any given trade. Like bookmakers though I can adjust that risk before and during the match.

Q. So you’re just gambling for a living?

A. Well, in short, yes. What makes the proposition different from a few mates having a bet on the footy each weekend though is the ability for me to hedge my position during the event. I often have a number of chances to limit my risk while the match is on, or, guarantee profits no matter the outcome of the event. Check out the screen grab from Betfair on a trade done in the 2011 French Open.

Betfair trading French Open 2011 on Rafael Nadal
Betfair trading French Open 2011 on Rafael Nadal


Q. Trading the stock market would be less risky, right? 

A. This is a massive myth. I’d say they carry equal risk, if you buy shares you are making a bet that the value of those shares will rise in value. No one knows, unless you’re insider trading, that would be like fixing in the sports trading world, but that topic is for another day. I’d go as far to say that any investment is a gamble, some bigger than others, but you think the people who had a total of $140 billion invested in their saving accounts during the great depression saw that investment as a “gamble”? Of course not, it was “as safe as houses”. Speaking of houses, do you think the people that bought “sub-prime” homes in the US before the property bubble bust in the mid 2000’s thought they were gambling? No, it was a sure thing, its property. There are no “sure things” when investing at any level.

Q. How do you know what will happen in an event?

A. I don’t, no one knows, but based on my knowledge of how prices move in the market and what might be “more likely” to happen I can take positions before or during a match. Let me give you an example, lets say you look at the form of a race and see that out of the 8 runners, one of the runners has lead in every one of its previous races, meanwhile, non of the other runners have ever lead. You could make a fair estimation that this runner will lead again and place a back bet on the runner, expecting it to shorten in price the further it goes along in front. At a certain time in the race you can place a lay bet on that horse either removing liability or creating a hedge across all of the runners (like the Nadal example earlier).

Q. Do you use any specific tools to trade with?

A. I use a program called Geeks Toy which is designed for sports trading. There is a number of these about, some good, some not. A bunch of guys I know just use the Betfair interface though and they are very successful traders. So you don’t need expensive kit to start off trading, just a smartphone/ computer, internet and maybe a calculator.

Q. Don’t you wish you had security of knowing what you make every week? 

A. I’d be lying if I said there isn’t a part of me that would love that. But at the same time, I don’t see employment or  your own business as anything that is 100% fail proof either. In fact, starting a business is a huge gamble in itself. I had coffee with a friend of mine recently that has gone balls out to start his own business, hes liquidated everything and I mean everything, houses, cars, the lot. On top of that hes in debt, this guy will likely make it happen because thats the kind of guy he is, but still, there are risks attached to what hes done, risks that will have serious financial ramifications if for what ever reason it doesn’t go his way. As for employee status, I hate working for someone else, first and foremost, secondly, just because you have a job that doesn’t mean you will have employment with that business forever. You wouldn’t have to travel far to find someone with a horrible story of being made redundant and depending on their age when made redundant, it can be very tough to get back into the work force.

Q. How much can you make sports trading realistically?  

A. Realistically, its like any other industry, there are top earners and there are bottom earners. Starting out I wouldn’t have expectations too much higher than trying to make a few bucks on the side as you learn the ropes. I know guys quite well that are making between $250,000 – $500,000 P.A, in all likelihood there are likely solo operators making more, I just don’t know them. If you were able to start your own company in bookmaking down the track, the skies the limit.

If you have any other questions you would like to ask, please don’t hesitate to comment below or shoot me an email at lukeamacatyahoodotcomdotau.

Cheers Luke






Self sabotage 101

Self sabotage 101

I had another blow out. So disappointing, going away on holiday tomorrow and didn’t really need this. Up until then it was a low-key but profitable week; picking up about $600 of profit. I had picked up where I left off on my horse racing edge, working on getting my sample size bigger and things were going along nicely. Yesterday I attempted to trade some Australian races, but the liquidity was so terrible that the markets were far too volatile. I got stuck with one lay, the race jumped before I could hedge, you know what happens, the thing comes from 2nd last to win. Things went downhill from there.

I attempted to mug bet my way out of the hole, but the hole got deeper and deeper. In the end I busted a bank, giving back the money I had won during the week and more. It’s disappointing, these are mistakes I’ve made before and it certainly makes you second guess your ability to progress in this industry. Maybe I’m destined to fail like everyone seemingly expects me to.

I hate to admit that I could be so foolish as to do this, it’s embarrassing really, I was a complete whale punter yesterday, sad shit. It’s so embarrassing that I didn’t want to write this blog post about it. But when I set out to do this, it was going to be “warts and all”, no hiding the truth from people, besides, in the future these are the posts that may help someone on their journey and that’s half the reason I’m doing it.

There were positives to come out of it all. Yesterday was the first proper realisation that this is going to send me back to “the real world” if I don’t plug this leak. With my other blow outs I either blamed the market, the player, team or that fucking horse that came from 2nd last, (jokes, not it’s fault at all, this is on me). I would rationalise it by saying “I could afford to take a bit of an extra risk there”. But this is it, I’m making a stand on this sort of shit. No more, this loss will be a “watershed moment” for me and I will be making some changes to help stop this from happening again.

As I fuck shit up, rules are added to the list. I’ve added a safety net for these sorts of mishaps, I won’t be having any more than $500 in my Betfair account at any one time. Any additional winnings will be withdrawn, while I will top up the account if required after any losses. When I played poker full-time I had a session limit I was prepared to lose. Although in theory I shouldn’t digress from my most effective strategies when winning or losing, the fact is that when I lose a “significant amount”, my head get’s a little fucked up and I’m not thinking with complete clarity. The next rule is pretty simple; don’t, fucking, do that, again!

Leaving tomorrow at 9am for Vietnam. I’ll enjoy this holiday with my beautiful girl, eat great food, drink great beer, see great things and meet some great people. When I’m back I will be head down bum up on turning things around. I’m getting closer to getting this all together everyday, either that or I’m massively in denial. I’m sure this post will help all the haters, haha, fuck. It’s not the end of the road, nor the end of the world.

-$1750.06 on the week, account balance +$8176.94

Cheers Luke

Betfair trading profit and loss graph, down swinging.

Such a disappointing mistake towards the end of the week. Have to learn to stop this or the dream will be over before I know it.
Things were going along slowly and nicely this week before I had an absolute blow out. It’s so disappointing that I wasn’t even doing what I wanted to do, I was mug punting. Disappointing.


I am not a robot, I’m human.

I am not a robot, I’m human.

Well, I’ll say this much about myself; I’m consistent. In this case, the consistency wasn’t a great thing. Much like every other market I’ve tried (horse racing & tennis) mostly spring to mind I jumped into basketball with no idea what I was doing and started mashing big stake buttons to get myself out of early trouble. I didn’t get out of trouble, quite the opposite actually, it’s fair to say my first few forays into the NBA were bad, like really bad.

In retrospect, I shouldn’t have been anywhere near the ladders on the day I gave up a big bunch of cash. Last week I was shaken quite severely with a private family matter. The matter involved a domestic violence issue, it’s not until you are involved in something like that, that you realise how thin the help on the ground is. The support for woman who have been abused in these situations is not enough, I can only imagine how bad it was 10 or 15 years ago.

I thought I was ok; I didn’t touch my computer the night of or the day after, I knew my head wasn’t right. But after that I thought I would be fine, I’d slept and I felt fine, I wasn’t. My thought processes were clearly irrational, I was trading sports I didn’t know, tennis matches I’ve got no data on, I was not being myself. In some ways, I was almost wanting to feel some success through trading to help me with some of the pain I had been through in the last 48 hours. My emotions got to me big time, this is an instance where I can openly admit that.

I was quickly down $900 to start the week. What a disaster, I was upset with what had happened and on top of that I had dumped $900, almost half of what I had made the week before. All the doubt comes rushing back so quickly; “can I do this”, “am I good enough”, “have I just been lucky”. These are not thoughts I’m unfamiliar with; when I started playing poker I also went through this. That makes it easier to deal with, but they still rattle you to an extent.

STOP, PUT DOWN THE MOUSE, STEP AWAY FROM THE COMPUTER! I did have the presence of mind to stop before too much damage was done, there’s a positive to take from that. I was also able to fight back later in the week to a manageable loss of something just under $600, again, another positive. Moving forward, I do need to be more mindful of how external pressures or personal matters can adversely effect my trading. I’m often told about “becoming a robot”, that’s just not me. For a long time I thought if I couldn’t do this I couldn’t be a successful poker player and in turn a successful trader, but I beg to differ. For me, when I say; “go and get fucked, shit pass” or “for fuck’s sake hit a winner”, I’m not so wildly filled with emotion that I’m throwing things around the room, I’m just releasing my thoughts, it’s mostly word vomit (those who know me, know I can spew some words). Emotion was what I felt when I found out about the abuse, the red I saw, the screaming of “FUCKKK I’m going to kill him”, that was emotion.

This was a tough week; physically, mentally, emotionally, financially. Time will only tell how the personal matter resolves itself, as for the trading, it’s onwards and upwards, international cricket season starts this week here in Australia and I’m really looking forward to that.

-$571 on the week, account balance +$7,001

Cheers Luke

Week 5 or 6 profit graph Betfair Trading

Weekly Profit and Loss Betfair Trading
Think this is week 5 or 6 now of my Betfair Trading experience. Making in roads, learning lots.
NBA betfair trading Utah v Pacers
Think this is week 5 or 6 now of my Betfair Trading experience. Making in roads, learning lots.


I’m a “LAG” I should be a “TAG”.

I’m a “LAG”  I should be a “TAG”.

“LAG” – Loose Aggressive (poker player definition); maniac players can turn a boring session of poker into a wild roller coaster ride. They are in many cases super aggressive, betting and raising with little concern about what their cards are. They have one of the good attributes of successful poker players, and that is aggression. They’ll win a lot of blinds and antes, steal many pots with nothing, and when they do hit good hands they almost always get paid off in a big way, since nobody believes they ever have a hand. Sounds fun? It is an unprofitable way to play, unfortunately.

“TAG” – Tight Aggressive (poker player definition); a tight aggressive player plays very few hands, relative to how many he is dealt, but when he does play a hand he is very aggressive, betting, raising and check raising. A typical tight aggressive player will only play about 20% of hands that are dealt to him. Tight aggressive players are the sharks in the poker ocean. The vast majority of long term profitable poker players fall under this tight aggressive category. Why is the tight aggressive style a winning style? Poker rewards two things above all else, and that is patience and aggression.

It’s only Thursday and I may not trade again this week. Last night was an absolute disaster, but it goes back a little further than just last night. The last 10 days or so have been really tough; net cords, framed balls floating in, wickets the ball after I red out, breaks of serve at the wrong times, hedging green and costing me money, hedging red and costing me green, it seems like what ever I touch turns to shit. A lot of variance going against me, but there has to be a reason for it, right? The sample is small (10 days) so I’m sure a good portion of it is unavoidable variance, but something is different in the way I’m going about it, there’s a difference from three weeks ago.

The unavoidable shit is getting to me, but fuck, I should be used to events going against me. For almost five months I went through a break even stretch in poker, the shit that was happening in that period was absurd. It wasn’t all the cards; It was a combination of me playing like a drooler, combined with the cards going against me. It’s like this horrible roller coaster that you can’t get off; unlucky outcome, go on tilt, make bad choice, lose money, unlucky outcome, make bad choice, lose money, etc.

I’m the only one that can break the chain, the variance will always be there, in fact, in part it is how money is made in trading and poker alike. No matter how much of a control freak you are, you can never change that, the variance will always be there “doing it’s thing”, “fisting you”. What can be changed is the “go on tilt”, “make bad choice” part, I need to channel my inner “LAG”, I know I can do it because I’m a LAG on the felt.

It was only three weeks ago that I was being much more selective in my entries, so what changed? The biggest change I noticed was in my head, it started after my first decent profit week. The next week I started to become concerned with having another good week to back it up. As a result, I started taking unnecessary risks, second guessing the data I use and it cost me early. I fought back to book a nice win, but these weird seeds were planted in my mind. Being down early in the last two weeks took me away from my standard line of strategy, in short, I went on tilt.

I still wish to recognise that I’m doing a lot right. It isn’t all doom and gloom, I’m still in front, it won’t take me long to turn this around, I just have to get back to what was working. I’ve been able to identify the issues, now it’s important I resolve them.

P.s. obviously I traded again before the week was out. I managed to get myself into a really nice little position with a $225 free bet on one player. I have a general rule that I don’t hedge for less than half of what ever my initial liability was. In this case I needed around $115 (honestly I would have hedged at any 3 figure number) but I only hit $88 at my peak. This is two or three missed hedges now for sizeable amounts. If anyone that reads this has any suggestions on how they tackles this, I know there is not rule book but there must be some thinking around it, any advice is appreciated.

Cheers Luke

Gambling joke
Funny little gambling joke.

Quick update from me this week.

Quick update from me this week.

Just a quick update this week, was a tough week. I ended up with a small profit on the week, which is something to smile about. I started the week out giving up a sizeable loss in NFL market which sucks (just happened again this week also). Starting the week out with a deficit for the first time was a testing time for me.

I had to remove that from my psyche and really focus on making good decisions. Early on in the week I didn’t do that, I let what had happened in the NFL affect my decisions. I kept looking for the “big play” that was going to “get me out of the hole”. I actually gave up 3 $50+ profits that became losses, hoping that they would give me a big win. That hurt me, turning green to red is the worst.

Bunch of bad variance; I certainly had a good chunk of that this week too. It ebbs and flows and it’s important to not lose your head or your cool. It was only 3 or 4 weeks ago that I would have lost my shit and upped the stakes, so I’m proud that I haven’t fallen into that trap this week just gone.

+$110 on the week, account balance $5,762.

Cheers Luke

profit loss chart

betfair profit loss
Picked up around 2% profit from my initial $5,000 starting balance.

Back to back profitable weeks, interesting head space.

Woohoo! Best feeling! I’ve just had my first consistent, back-to-back weeks, of what I would say is ‘considerable profit’ over a ‘decent sample’. I’ve had longer runs of profit in the past, but never with a decent amount of plays like the last two weeks. I’ve also never felt as in control as I have in the last two weeks, feeling good, feeling great!

I have that feeling now that the week is over. During the week though my mind ranged between; this is easy, I’m all over this, to, I really don’t want to fuck this up, booking back to back sizeable profit’s mean’s a lot to me. I’m starting to understand why many talk about the psychology of trading being equally, if not, more important than the other required skills.

“This is easy now, I know it all”. Most people have heard of the term “tilt” when talking about poker. For those that haven’t, it mean’s; playing the game with a suboptimal strategy due to emotional factors. This mostly happens when people are losing money or become impatient. However, people also go on “winners tilt”, which is; when people use a suboptimal strategy due to the emotion created from winning. The card’s are falling their way, they’re bluffing players out of pots, everything they do seems to be working. You’ll often hear people at the table that are having a session like this; say something like; “I’m hitting my flushes today, that’s why I had to call” or “I’m running hot today, I have to call”.

This thinking is totally flawed. The cards have no memory, they don’t know your name let alone whether you’re “running hot”. The chance of hitting a flush draw on the turn or river never changes. It’s the same 13 suited cards in a 52 card deck, every time. So letting your emotions tell you to call because; “I’m running hot”, makes no sense. You’ll begin to take unnecessary risks, which leads to -EV positions. On Tuesday, my first session back on the ladders, this was my mind set. I thought I was God’s gift to trading. DANGER WILL ROBINSON!

Luckily, having experienced this in poker before, I was able to identify the shift in my mindset and reign it in. Then I went to the other end of the spectrum, extreme opposite. I started realising I really wanted to back up last weeks profit with another good week. This made me start to feel a little timid and nervous while I was watching the market, looking for an entry. I started second guessing myself, missing spots I’d usually take and missing winning trades. Again, I identified my mindset in an objective manner and chin checked it, neck up you Parrot!

I came to the conclusion that; although too much of the latter (procrastination, timid, etc.) was obviously harmful to my trading success, I’d rather err on the side of caution and miss some winning plays than be an overconfident fish in the market with “winner’s tilt”.

+$591 on the week, account balance $5,652.

Cheers Luke

Week 2 trading graph for Betfair trading

Week 2 - Tennis trading Betfair
Week 2 of my trading graph. Was great to get back to back decent profits.
Week 2 - NFL trading on Betfair
Week 2 of my trading graph. Was great to get back to back decent profits.
Mattek-Sands Muguruza Betfair Trading
Week 2 of my trading graph. Was great to get back to back decent profits.
Betfair tennis trading
Week 2 of my trading graph. Was great to get back to back decent profits.
Wang v Wozniacki Betfair tennis trading
Week 2 of my trading graph. Was great to get back to back decent profits.
Indianapolis v Houston NFL Betfair trading
Week 2 of my trading graph. Was great to get back to back decent profits.
Bacsinszky v Errani Betfair Tennis Trading
Week 2 of my trading graph. Was great to get back to back decent profits.

What a difference a week makes.

Usually, I’ve posted my weekly update by now.  This weekend, however, was overtaken by Grand Final weekend here in Australia. No surprises in the AFL final with Hawthorn winning their third premiership in a row. I was lucky enough to travel the one hour plane flight to Sydney to watch the NRL grand final. The match is being  touted as the greatest grand final in history and I’m glad to say I was a part of the 82,000 strong crowd. The game and atmosphere were both electric. I also got absolutely fucking written off on Sunday night, so no trading over the weekend.

Getting to the trading from last week, WHAT, A, DIFFERENCE, A, WEEK, MAKES! Incredible stuff last week for me, a complete turnaround. I don’t just mean from a financial stand point, I mean mostly in my decision making. What’s hard to get your head around with trading is; you can do something technically right then lose money, same with doing something wrong, money lost. So how does one know when they are making the right decisions? For me, it’s numbers, I like to use statistics with good relevant sample sizes to make entries and and exits. Then I know, no matter the result I made a +EV play. This last week I’ve found just what I need.

I’ve said it before in my blog, “if you are doing this alone, you’re doing it wrong”. You should be connecting with other traders, statisticians, odd’s compliers, punter’s. We have a Skype chat room with 16 traders of all levels. It’s great to be able to bounce idea’s and learn about other markets you may not be currently trading. In the group I’ve been working mostly with @AdamChernoff as he trades the markets I’m mostly interested. We both bought a subscription with Tennis Ratings is run by Dan Weston & Matt ‘H’, these guys build brilliant tennis models. Since having these numbers, I’ve been able to save myself time in collating data and be much more efficient with my entry/exits in the market. Some really exciting things to come with that service in the near future I’m told, stay tuned for more information on that.

All in all, this was my most profitable week and it’s not even close. I ended up with a total profit of $726.25 on the week. It’s fair to say I am really stoked with that result. But now I’m back, just finished trading my first NFL game for the week actually, it’s heads down, bums up to lock in a solid back to back weeks of trading.

+$726 on the week, account balance $5,061.

Cheers Luke

Betfair Trading Graph

NFL trading profit/loss on Betfair.
NFL trading profit/loss on Betfair.
WTA tennis trading on Betfair
NFL trading profit/loss on Betfair.
Betfair WTA tennis trading
NFL trading profit/loss on Betfair.
WTA tennis trading on Betfair, Caroline Wozniacki
NFL trading profit/loss on Betfair.
Betfair trading WTA tennis
NFL trading profit/loss on Betfair.
Betfair trading WTA tennis, 3 matches at once
NFL trading profit/loss on Betfair.
NFL trading on Betfair
NFL trading profit/loss on Betfair.