Trading sports online may be a really profitable pastime and as increasingly more people get involved that suggests just one thing… liquidity. With the invention of the betting exchange as well as the rise and rise of the main one, Betfair, there is increasingly additional money being traded on sports events.

From horse racing to tennis and football to greyhound racing there are lots of markets to select from and concentrate on. There are even markets for financials and politics.

In-play betting as well as the ability to place “lay” bets have revolutionized our capability to make the most of these markets (for all those not in the know a lay bet is betting that an event will not occur ie a horse will not win a race). Just watch any in-play tennis match and see how the odds move. Making experience of these patterns and developing successful strategies to make regular profit will be the holy grail for many individuals.

The basic theory behind all this really is that you will need to back at a higher price than you lay. It’s the same as business all around the world, you buy a product at one price and source website you sell it at another, the real difference between the 2 being your net profit.

An example is I back a horse at 2/1 for Ł100. That is 3.00 in decimal odds. If it wins I win Ł200 and get my stake back. Ahead of the start of the race the odds come down to 6/4 or 2.50. I then lay it for Ł100 and in the event the horse wins I have to pay out Ł150. The difference between my back winnings and my lay liability is Ł50. Which is what I would win if this horse wins and if it doesn’t, I lose nothing! A zero cost bet. The really neat trick is to “hedge” your winnings out so you win the exact same amount regardless of what horse wins. In the above example I could lay the horse for Ł120 guaranteeing me a Ł20 profit.

The obvious problem is what happens if the odds rise? You’re left with a bet you cannot sell or get rid of without losing at least some of your stake. This is where the real difference between traders and gamblers comes in. A gambler takes risks to be able to possibly achieve a profit. A trader is happy to take a series of small losses safe in the knowledge that the wins will outweigh the losses.

There are several and varied approaches to trading although the most critical thing is discipline. As soon while you fail to close a trade which has gone against you you are no longer trading but gambling. Sure, you could get away with it but when it goes wrong you will certainly lose a whole lot more than you bargained for. The most effective way to focus your mind and stop the gambling tendency arising is to work to strict strategies with defined entry and exit points.