Support and Resistance Trading Pre-Race

Support and resistance

If you’re interested in pre-race trading on Betfair Australia it’s crucial you understand support and resistance.

In this article I’ve laid out the key details you must be aware of in order to trade successfully.

What is pre-race trading on Betfair?

As the name suggests, pre-race trading is a niche topic within Betfair’s racing markets. Many principles and ideas can be carried over to other sports and market types, although pre-race is quite unique.

Unlike many other sports, horse racing markets attract large betting volume before the start, offer a large range of selections and are extremely subjective. These conditions are perfect for day trading, even if you know very little about racing.

In short, pre-race trading is like the stock market for betting odds, just without the high commissions and tax. If you’re any good, it’s a lucrative game.

A fundamental factor within pre-race markets is support and resistance, hence the importance of this article…

Support and resistance points

Predicting support with certainty isn’t always an easy task. However, resistance points appear with extreme regularity.

In most cases, they’re created entirely by human perception, greed and fear.

Below is an example of a break at the 6.0 resistance. If you look to the traded volume bars (to the right of each price) you will see there was significant resistance on approach, once broken the price moved quickly.

Being on the wrong side of a resistance point can become painful quickly. Alternatively, being on the right side can enhance profit.
Some of the most reliable resistances can be found where price increments change, displayed below.

• 2.0
• 3.0
• 4.0
• 6.0
• 10.0
• 20.0
• 30.0
• 50.0

There’s a very good reason these price points create bias, as we’ll now discuss.

How to trade support and resistance

With the previously mentioned price points in mind, I want you to see my small trading position below.

Pay close attention to the profit and loss column on the right.

A lay bet has been matched at 3.85. This is why the profit and loss column is neutral at $0.00.

Initially, you will see that the potential returns either side of 3.85 are similar. However, once the price drifts beyond 4.0 each increment is worth almost double.

To re-iterate:

• difference between 3.95 and 4.0 is $2.44 profit
• difference between 4.0 and 4.1 is $4.70 profit

This is because price increments have changed from 0.05 to 0.1.

It’s easy to see why traders prefer to lay at these prices. The reward is firmly stacked in your favour. However, if a price is shortening through once of these price crossovers, it creates a temporary support point (while other traders exit their losing position).

Being selective about which resistances you choose to trade is important as it can become a psychological game against yourself.

To avoid getting lured in emotionally it’s best to refer to the live data available to us.

Using Betfair’s charts

Each exchange market has its own price/volume chart. You may have noticed the icon via the website.

The chart below highlights several points of resistance.

The blue lines show how regularly a previous point of resistance in the market soon becomes support once broken. Look to the bottom 3 blue lines, in particular, prices halted, turned or displayed additional indecision more than once. Unsurprisingly, the 2.0 price crossover was a point of resistance in this example.

Tip: Generally speaking, the 4.0, 6.0 and 10.0 crossovers present stronger support and resistance than elsewhere. Above and below this price they are still present, although the market is usually illiquid (high prices) or highly fluid (low prices).

Making good use of charting is the best way to avoid impulsive decisions because data is not subjective – it’s a fact!

Looking back at historic trends like this is great, although it’s trickier during the moment. This is why some of Betfair’s trading apps have extra charting, streaming live data.

Short-term support and resistance

Streaming short-term information is particularly useful pre-race as the prime trading window is late before post time. Typically 90% of exchange markets betting volume is staked inside the final 8 minutes.

This means support and resistance is also often visible over a far shorter period of time, sometimes as little as 30 seconds.

Here’s a quick visual to highlight what I mean:

This chart is available inside the Geeks Toy trading app.

To put things into perspective, this charts range is plotted over 3 minutes with a refresh rate of 0.25 seconds. Support and resistance is everywhere!