Betfair Tennis Trading - Applying Technical Analysis
The in-play match odds market in Tennis is another popular market for trading. There is a lot of liquidity and can have a good trading range which makes it ideal for getting in and out of positions. Tennis grand slams occur every few months (4 times per year) and are the main tournaments to trade. Here are their schedules (please check dates are they are subject to change):
- Australian Open: 17th - 30th January
- French Open: 22nd May - 5th June
- Wimbledon: 20th June - 3 July
- US Open: 29 August - 11th September
The tournaments above will be televised and if you live in the UK you can catch the action on BBC or Eurosport. Smaller tournaments (ATPs) are also sometimes televisied and may also be found on the BBC tennis page. If you are not using trading software, it is recommended that you do so as the match odds market moves quickly and you'll want to be looking at real-time graphs.
Technical Analysis and the Tennis Market
Two of the basic principles on technical analysis are support and resistance. These two types of areas in a graph are shown below and signal a potential price turning point:
There are many articles about support and resistance on the internet (along with other aspects of TA) but for the purpose of this article, there is no need to go into further detail as the application on Betfair is very simple. Here are two ways you can use support and resistance to trade tennis:
Trading breakouts or "going with momentum" is probably the safest way to trade Tennis and also my preferred method. A breakout will usually happen when a player is dominating the game and looks very likely to win the set. After breaking out of resistance the price will usually continue to rise:
The example above shows the price movement on Federer in the match odds market. As you can the price hovers around a clear range of support and resistance before breaking out. The first indication that the price could breakout was the peak at 1.79 and the recovery after the retrace to 1.3. From there, you could see that there was a clear upwards trend and a lay at any low point between 1.8 and 1.25 could have given you a nice exit above 3.
Swing trading is when you are speculating in a bounce in prices when it hits resistance. Swing trades work best when the prices are in a clearly defined range - a near symmetrical pattern of peaks and troughs. This technique is used in stock trading and also forex, however, the application of it on Betfair can sometimes be a little tricky. Unlike the stock market where prices can be driven by market sentiment (i.e. The share price of a company can be 18p one day and the next day it could fall to 16p without any news), the prices on tennis markets are usually a result of a shift in fundamentals i.e. Federer has just won a point or set against Nadal.
Be careful when the fundamentals have changed. The prices on Betfair may have been moving in clearly defined range but the fact is that Nadal is now behind in points means that no amount of support or resistance on a Betfair graph can stop him from losing the match. Due to this, it is usually safer to do swing trades during the earlier stages of the match rather than too near to the end. The only reason why you would swing trade near the end of a match is if you were laying very short odds and trading out on a small bounce. Here is an example of a swing trade in the Djokovic vs Federer match odds market:
In the example above you can see a clear down trend in price with a couple of decreasing peaks. Backing at the peaks would have been good value and you would have been able to lay at a much lower price. I would not trade the first peak but by the second and third peak, a clear pattern can been seen even if you cover the rest the graph (which would be the view you would have had when the match was in-play). In the example above, you could have backed at around 5 and successfully layed at under 3.
Examples of Sucessful Strategies
Watch from the beginning and go with momentum until turning point or end of set. Look out for serves being broken as they signal a turning point in the match. First person serving has more chance of winning the game.
For more detail and to learn more about tennis trading take a look at Tennis Trader which explains a variety of different ways to trade tennis markets.