The 5 top reasons why people new to Scalping on Betfair fail.
Over the years there has been a lot of talk about “scalping” the exchange markets like Betfair.
There have also been a number of popular video’s where a scalper will sit at a screen for a few hours and make a few hundred £’s profit.
But for everyone that seems to succeed at scalping 100’s don’t.
Why is that?
I mean scalping is just about getting into the market making 1 or 2 ticks and getting out again…
…How hard can it be?
Well, it seems a lot more difficult than many “Scalper” pros would like you to believe.
Myself I am a mixed trader.
I don’t necessarily go into a market to Scalp, but I will if I feel that is the best option.
After many years of trading and showing people how to do both I have come to the conclusion that most people fail at scalping for these 4 main reasons.
1) Not exiting a bad trade quickly enough.
I have written about this in a separate article (here) as well because this is a "Biggy" for all traders...
...But especially scalpers because they are only making 1 or 2 ticks profit most of the time so they can not afford a 10 tick loss.
I think this effects people new to scalping more because they get demoralised when they start losing bigger chunks of their stakes.
To win at scalping you must keep your losses as low as possible and so it is imperative you learn to get out quickly and take the smallest hit you can.
Practice exiting fast and accepting that a market has gone against you because you were wrong in your assumptions.
Try not to let emotions rule your trading.
If you got it wrong that is fine. Just try to learn something from the trade going against you and move onto the next one.
2) Not planning.
I think it is because of those videos that have been doing the rounds for years.
Showing that you can just get into any market, make a couple of ticks, then get out again…
(By the way, this wasn't a dig at Peter Webb (I use Bet Angel myself) it was just to show an example of some of those videos that try to make scalping look easy when it isn't always that easy!)
…That many people new to scalping think that it is the normal way to do it.
Anything to do with trading should be planned.
Pre-trade research is paramount to be a successful trader of any type.
With experience you will probably be able to spot potential scalps without a lot of research but when you are beginning you need to have a plan.
Strong favourites are probably a good place to start.
Even though the tick values are small they tend to be a little more predictable (Most of the time) than runners trading at 3.00 or 4.00.
3) Not having a clear understanding of the numbers.
To be a good scalper you are going to have to have a good understanding of what is happening in the market and why.
Although you can scalp with many different types of interfaces the “Ladder” is probably the best because it can be set up with a lot of information on what is happening at a glance.
Seeing things like “Matched Volume”, “Weight of Money” (WOM) can help you read how the market is reacting…
…And seeing how the price is moving up and down in short-term graphs all helps you make better decisions.
This leads us on to another to another very important reason why I think newbies fail…
4) Not enough practice.
I don’t care what type of trading you are doing you are not going to make money without practice…
…And a lot of it.
It’s probably one of the hardest points to get across to people new to trading.
The saying “Practice makes perfect” is no truer than with trading.
If you come at scalping with the attitude that you are going to “Paper Trade” or use very small stakes until you get to a 90% success rate then you will probably make a good trader.
Even in the BFscalper course Stuart spends a lot of time just re-stating that it is practice that makes you a good trader.
I must agree.
The more you practice the better you get.
One thing on “live Betfair trading” and “paper mode”:
Betfair seems to dislike paper mode traders and if that’s all you do without placing live bets you could get your account limited or even closed.
Also, (although I am not saying for a moment you should “Live Trade”) even if you trade with 50p it does give you a more realistic feel for how trading works.
That said any practice is better than none.
5) Increasing your stakes too quickly.
The worst thing about scalping is it seems to be small profits for large stakes.
This normally leads to newbies increasing their stakes too quickly and they end up making a mistake that leads to them losing a lot more than they were expecting.
Although trading with £2 is in theory no different than trading with £1000.
There is a difference that can be caused by “Liquidity” in the market.
If you gradually build up your stakes you will then learn the difference as you go through the gradual increase in stake sizes.
Start slowly and build slowly and you will have a much better chance to become a profitable scalper.
So there you have my 5 reasons why I think newbie scalpers fail.
To become a good scalper needs practice because I think it is the experience of watching one market after another that allows you to make better decisions.
You're soon start to get a feel for how the markets move and react and when is the best time to enter and leave a market.
Until next time.