www.sportsarbitrageworld.com - the Professional's Choice
This minicourse has been written to provide you with an introduction to the principles involved in sports arbitrage. Log into the TraderZone to purchase your Trader Pack which includes the Hardback Version of Sports Arbitrage - How To Place Riskless Bets and Create Tax-Free Investments by Rajeev Shah
This minicourse has been written to provide you with an introduction to the principles involved in sports arbitrage. Log into the TraderZone to purchase your Trader Pack which includes the Hardback Version of Sports Arbitrage - How To Place Riskless Bets and Create Tax-Free Investments by Rajeev Shah
HOW DO I GET STARTED AS A TRADER?
If you are excited by what you have learned so far about sports-arbitrage, that's an excellent start. However, if you want to be assured of success in your project, you must make certain preparations before diving in:
Computer
Minimum Spec: 1Ghz Processor, 1GB RAM 80GB Hardrive, Windows XP
You can also use just about any modern Mac, although you will probably want to run helper software that allows you to use Windows programs on your Mac.
Internet connection
Broadband internet is essential - the faster the better. A back-up dial-up account will also be useful both for emergencies and those occasions where you may require a different IP Address
Software
- ArbSurfer Pro (specialised internet browser)
- ArbAlarm (arbitrage trade notification)
- Microsoft Money or Intuit Quicken (accounting)
- An email program (eg Windows Mail)
- Skype (instant message & internet phone)*
* Many traders work in teams and Skype is an excellent free way to keep in touch instantly. Coupled with a headset or mic & speakers it's also a very convenient way to call bookmakers whilst keeping your hands free to place bets online.
Capital
The amount of trading capital you require will depend largely upon your goals.
| Just starting out Trading capital £2500 - £5,000 | Part-time trading Trading capital £10,000 - £15,000 | Full-time trading £25,000 - £30,000 |
Professional trading £35,000 - £150,000 |
| Since
all of your bets should be low value at this stage, £5000 is enough to
allow you to place funds with 30-40 bookmakers and get the ball
rolling. Your profits will be very low but your goal here should be
gaining experience. You are bound to make some mistakes so it's better
to lose
small stakes which can easily be made up later on. You should be using
your ArbAlarm trial at this stage - being able to see when and
where live arbs appear is a great shortcut to gaining the significant
knowledge. | If
you have other commitments and plan to trade for a couple of hours
during the evenings and perhaps over the weekends, once you are
confident in your processes, you are going to need to increase your
capital in order to ensure that the time you spend generates a
worthwhile extra income. Your stakes will be larger now and it's going
to be important to make sure that the periods during which you are
trading are used as effectively as possible and a big part of this will
be having funds on account so that you are able to execute your trades
with minimum delay. ArbAlarm will deliver live arbitrage information to
your desktop when you need it and this will greatly enhance your
trading productivity. | 'Full-time' doesn't actually mean trading 8 hours a day. It really refers to the
level of commitment and goals associated with your trading. At this
level, you are almost certainly working from home and willing and able
to trade 3 to 4 hours each day, and more during certain busy periods of
the year. You should be using ArbAlarm consistently
and making it pay handsomely each month. | At this level, sports-arbitrage and other techniques such as Middles trading are your main occupations. 6-8 hours of trading each day - research and execution - will not be uncommon. |
| Likely profit per month: £300 - £400 |
Likely profit per month: £1000 - £1,500 |
Likely profit per month: £2,500 - £3500 | Likely profit per month: £5,000 - £15,000 |
Banking
Although you can trade from many different places in the world it is easier and cost-effective if you are able to set up bank and credit card accounts in the UK. This is because all UK bookmakers and some non-UK bookmakers allow free deposits and withdrawal from UK debit cards (and some UK credit cards). If you are not based in the UK, you might want to consider opening a UK bank account the next time you are here and then do all of your trading in British Pounds. If this is not possible, don't worry too much - all it means is that you will face slightly higher transaction costs at the start of your business. As long as you trade frequently your profits will overshadow your costs considerably.
In any case, you should set up separate accounts (bank and credit card) for your trading form your personal day-to-day accounts. Mixing arbitrage transactions with shopping bills and mortgage payments will lead to complications and possible accounting errors once your trading takes off.
You will need a bank account which will give you easy online access. You want to be able to check your balances and make transfers conveniently and doing all of this online is the most convenient. Telephone-banking is a distant second and you should completely forget about trying to trade whilst using an account with no such facilities.
The best account to get is the one offered by Citibank because with it you get not only a Sterling-based current account but one denominated in Euros and one denominated in US Dollars. Transfers between the different accounts are instant and performed at very good rates of exchange.
If you cannot open an account with Citibank then try First Direct. They also offer US Dollar accounts although transfers between your Sterling and Dollar accounts will not be quite as smooth as with Citibank. However, they have exceptional customer service and very convenient online facilities.
Banks' requirements for opening accounts vary from time to time so you should check their websites for the latest terms. However, when you apply, don't mention that you intend to use the accounts to facilitate sports-arbitrage trading. It's usually best not to mention anything related to gambling when dealing with financial institutions!
Credit Cards
You will also require at least one credit card. For the purposes of trading, only Visa credit cards will do. Mastercard has taken a stance against gaming and you will not be able to use a Mastercard at most bookmakers.
The bank you use for your trading account will probably be able to offer you a credit card as well. Take them up on this with as high a credit limit as they will give you. It is useful to have at least one spare credit card but most traders have a collection of 3 or more. You may not use them often but it's better to have them available than to be left high and dry in the middle of a trading scenario.
Online Wallets
In addition to a bank account and credit card, you will require accounts with a number of online wallets. These are accounts into which you can place deposits and which will act as a "central holding account? for a number of bookmakers. The largest and most widely-used online wallets are currently www.neteller.com and www.moneybookers.com and you should set up accounts with each of them.
Bookmakers
Before you can begin to trade, you will need to set up accounts with a large number of bookmakers. It is a very good idea to set up your accounts well before you start to trade - attempting to set up accounts as and when you need them will result in a lot of wasted time and opportunities for you later on.
You'll find a coprehensive list of boomakers, ratings & reviews at www.bookmakerreviews.com
In most cases, you will be able to open accounts without depositing any funds. This is advantageous as it allows you to make your preparations even if your trading capital is not yet fully at your disposal.
Both ArbSurfer Starter and ArbSurfer Pro contain a comprehensive list of bookmakers and this list is synchronised with the list of bookmakers scanned by ArbAlarm.
Setting up such a large number of accounts can be a daunting and time-consuming task; using ArbSurfer to open your accounts is the most efficient method possible as the software auto-completes the majority of each form for you. Once you have downloaded and installed the software, you will be taken through a set-up wizard. Follow this through and set up a Profile. After this, you can use the links provided in the software to visit each bookmaker site's sign-up page and the software will automatically fill out the forms with the data you have provided in your Profile. In some cases, you may be required to type in a verification code or other data not contained within the Profile, and then you simply submit the form.
Some of the bookmakers will set up your account with the username and password combination you placed in your Profile. Others will assign random log-in codes for you and email them to you. In any case, whenever you set up a new bookmaker account, take the time to write down the bookmaker's address and the log-in codes so that you have a record of them. If you choose to upgrade to ArbSurfer Pro then the software will remember all of your codes for you and even log you into the sites automatically when you visit them.
Distribution of Funds
As you set up your accounts, a question about how to spread your funds amongst them will come to mind. Do you keep the money in the bank and wait for an arb or do you put the money with the bookmakers in anticipation? This usually seems like a catch-22 situation to new traders. If you don't have your money ready at the bookmakers, then you waste too much time depositing and miss the prices when you need to bet. But if you start putting your money with the bookmakers, it gets spread thinly and you still may get an arb with a bookmaker where you don't have enough funds. . .
The solution is to combine the approaches intelligently and place funds with bookmakers selectively:
1. Select the bookmakers you will use. As mentioned previously, good starting points are www.bookmakerreviews.com and/or the built-in lists of ArbSurfer
2. Provide the bookmakers with all required documentation in advance. For example, in order to make your first deposit with an Australian bookmaker you will need to send them a fax or scan of your ID and credit card. If you do not do this in advance, the process will seriously hinder your ability to successfully place a bet with them on the first occasion that they are involved in a sports-arbitrage trade. Look through the sites you plan to use and see which ones need more information from you.
3. Some bookmakers provide Instant-Bet accounts which will debit your card automatically at the time you place a bet. Any accounts which offer Instant-Bet facilities can immediately be taken off your short-list of accounts which require advanced funding.
4. Look for bookmakers which will accept deposits via your online wallets. Deposits made this way are usually instant - this means that you can keep relatively large central balances in your online wallets ready to be used with any of the bookmakers rather than holding smaller individual balances at the bookmakers themselves.
5. Decide which accounts are going to be used most frequently: This is obviously quite difficult because it seems to require a lot of foresight. However, the data provided here now makes this task much simpler:
This site processes a number of very large database of expired arbs and displays exactly which bookmakers were involved heavily with which sports during any given time-period. This is an extremely useful tool which you will probably refer back to frequently as it gives you a great idea of where money needs to be placed each month.
Following steps 1-5, you will produce two lists - accounts which need advanced funding and accounts which do not.
Like many things which seem complex, sports-arbitrage trading can be simplified by considering & mastering the individual actions that make up the entire process. Avoid the mistake of assuming that it will be better to pick things up as you go along instead of investing some time beforehand to really think about what's involved.
In most cases, the people who complain on forums that "arbitrage didn't work for me" or "it's too risky" or "all of my accounts were limited within weeks" are people who ignored the inherent folly of going live on their trading project without sufficient preparation.
Preparation & Organisation are the two aspects of the way you operate which will determine your degree of success.
Before you begin trading, having chosen your bookmaker accounts and decided how they will be funded, the next step is to familiarise yourself with the bookmaker sites. Place a few 10 pence bets at the sites which confuse you. Make sure that you fully understand how to place bets at the sites you will be using. If you place 50 bets of 10 pence each, you will have a thorough understanding of the way the bookmaker sites work and the most it will have cost you is ?5 - this small investment will pay dividends later on when you are trading under pressure.
So, now you know what groundwork you have to lay, let's take a look at your options for finding arbitrage trades...
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