Betfair horse trading – Finding low risk markets – Volume vs Liquidity
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Betfair horse trading – Finding low risk markets – Volume vs Liquidity

August 13, 2019

volume is not liquidity what am I
talking about why am i focusing on two different things
it’s because people generally get the two confused and in this video I’m going
to talk to you about both of those things and how they work together and
how you can use your knowledge of either to make a much better trade if you want
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interested in learning more about boat and you’ll visit betangel calm today and
download a free trial so volume is not liquidity and what does that mean to
understand where we’re going here you need to look at both individually so the
first thing is volume when we meet when we say volume what do we mean about what
it could actually mean many things it could mean the amount of unmatched bets
the amount of volume that we have an unmatched bets it could be the amount of
matched bet volume that we have but basically when we talk about volume
generically we’re saying how much money is in the market you know where is that
money and so on and so forth and one of the things you have to be careful to
guard against is if you have significant volume in the market it doesn’t
necessarily mean that that market is more tradable so say for example you
know you have 50,000 pounds back in 50,000 pounds Lane sometimes you see
people saying all this market is liquid no it isn’t it’s got a lot of funny but
it’s not necessarily liquid so when exchanges have tried to compete with the
main exchanges they’ve often flooded the market with volume not with liquidity
with volume and what they’ve done is they’ve just put up enormous amounts of
money on both side and said although there’s plenty of money for you to play
with but that dovetails us in to liquidity and the most important thing
you can have in a market is liquidity as a trader and that is because say I go
into the market and I place a large trade and I’m thinking oh you know what
I’m not so sure about this trade any longer you want to get out so you want
to be able to have the ability to sell that your trade back to the market
fairly quickly because if you do it quickly you can typically avoid a loss
or make very small loss so you need to be able
to put an order in take the order out and put it back in again and be able to
change it and get your order matched as quickly as possible so that’s what we
mean by liquidity and typically when I refer to the quiddity I’m talking about
fill rate and fill rate because the ability to get in order match and how
quickly that order gets matched so when I’m looking at true liquidity I’m
looking at how quickly my order will get much so I can put some money in and if I
change my mind I put the order back into the market on the opposing side and then
I wait for it to fill if that happens really quickly that’s brilliant because
I can put mine in take it out move it around you know try all sorts of
different things and generally that would work pretty well that makes the
market very very liquid and I enjoy those markets but when you get a market
where your orders just are not filling the longer your orders in the market and
they’re and you’re not moving into profit or you’re trying to move into
profit and it’s not happening you increase your risk exponentially so in
an illiquid market you get into the situation where you take a position it
starts to go against you and you can’t get out so your losses multiply rapidly
and you don’t want that you you know you want a liquid market market that’s
moving money through really quickly much more than you want volume but of course
ideally you want both you want a very high volume market with loads of
liquidity because that’s where your best opportunity will come from unfortunately
you know you don’t necessarily get those markets all times but you would tend to
get them around you know major sports events that are televised and you know
where there’s lots of betting activity on them so you need to be aware that you
know if you have large amounts of money in the market that doesn’t mean good
liquidity it just means that there’s a lot of money in the market it could be
dead money and it may be somebody else’s money it could be somebody ceding an
exchange and as soon as you try and take that money may vanish or you may find
that you take the money and you only get filled when the market starts to move
against you and you can’t actually get out because nobody’s taking your
positions so yeah you know having a mixture of good volume and good
liquidity is great but you know one without the other
it doesn’t particularly work but if you had to have preference over the two I’d
quite happily take lower volume and higher liquidity because that enables
you to do much more with your particular trade at much lower
risk as well so yeah big difference between volume and liquidity and you
need to be aware of that to be able to find markets that are much more tradable
if you’re interested in learning more about that angel visit petit angel comm
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  1. With reference to your previous posting requesting ideas for videos, would it be possible to produce a video expanding on this topic of volume and liquidity with specific reference to market makers, traders and punters in horse racing markets. Personally I would be interested to understand your views on how each of these influence each market, how you read their impact and how you then act upon that reading. Thanks Peter.

  2. Thank you for trying to explain the difference between volume & liquidity. However, you didn't succeed. You simply confused me/us. What you didn't say is HOW do we recognise the difference?

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