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

From horse racing to tennis and football to greyhound racing there are several markets to pick from and specialize in. There are even markets for financials and politics.

In-play betting and the capability to place “lay” bets have revolutionized our ability to cash in on these markets (for 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 feeling of these patterns and developing successful strategies to make regular profit will be the holy grail for lots of people.

The fundamental theory behind all this really is that you’ll need to back at a greater price than you lay. It is the exact same as business all around the world, you buy a product at one price and 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. Prior to the start of the race the odds come down to 6/4 or 2.50. I then lay it for Ł100 and if the horse wins I have to pay out Ł150. The real difference between my back winnings and my lay liability is Ł50. Which is what I would win if this horse wins and if it will not, I lose nothing! A zero cost bet. The really neat trick is to “hedge” your winnings out so you win the 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 in the event the odds rise? You are left with a bet you can not sell or get rid of without losing at least several of your stake. This really is where the difference between traders and gamblers comes in. A gambler takes risks so that you can 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 plenty of and varied approaches to trading although the most significant thing is discipline. As soon when you fail to close a trade that has gone against you you are no longer trading but gambling. Sure, you might get away with it but when it goes wrong you will definitely lose a whole lot more than you bargained for. The best way to focus your thoughts and prevent the gambling tendency arising is to work to strict strategies with defined entry and exit points.