In this article I shall attempt to explain how you can become a successful sports arbitrage trader as efficiently as possible. I’ll assume that by now you have gone through the introduction to sports arbitrage trading and that you are aware of our TraderZone professional sports arbitrage software, bookmakers and e-wallets. It’s here that I will start to connect the dots for you.

First let’s consider the basic resources that you’ll need:

• Computer - PC, Mac or Linux
• Broadband Internet Connection
• Phone
• Trading Capital

Computer

These days you can use any modern computer. Entry-level hardware will be powerful enough for trading purposes and you are not tied to any particular Operating System as you will use your browser for all of your trading operations.

Broadband Internet Connection

This is essential. In general, the faster the better, but 1MB is good enough for trading effectively.

Phone

It  useful to have a phone available as some bookmakers operate telephone accounts which offer different limits to their online versions.

Trading Capital

Your trading capital is the major factor which will influence your level of profitability. You can start learning how to trade with as little as £500. This will be enough to allow you to practice and you’ll also be able to take advantage of the bookmaker bonuses to increase your capital. However, your progress will be slow and to take this opportunity seriously, you will need at least £2500. The table below provides a realistic assessment of what will be possible with different levels of trading capital.

Trading Capital £2500 - £5,000 | Likely Profits/Month £250

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 TraderZone trial at this stage -  being able to see when and where live arbs appear is a great shortcut to gaining the significant knowledge.

Trading Capital £10,000 - £15,000 | Likely Profits/Month £1,500

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. The TraderZone will deliver live arbitrage information to your desktop when you need it and this will greatly enhance your trading productivity.

Trading Capital £25,000 - £30,000 | Likely Profits/Month £2,500 - £3,500

With this kind of money, you can set up as a full-time trader. As a ‘Full-time’ trader you won’t necessarily be trading 8 hours a day. The phrase refers more 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 the TraderZone consistently and making it pay handsomely each month.

Trading Capital £35,000 - £150,000 | Likely Profits/Month £5,000 - £15,000

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.

Once the initial setup has been established, you will need to open e-wallet accounts & register at some bookmakers.

E-wallet Accounts

E-wallet accounts are an important part of arbitrage trading, as they provide a fast and secure service enabling you to deposit & withdraw your funds to/from the bookmakers.

Two of the popular e-wallets are:

• Moneybookers (www.moneybookers.com) - Moneybookers is currently considered the best e-wallet for sports betting arbitrage. It is accepted by the majority of online sportsbooks as a method of deposit and withdrawal, often free from fees. Moneybookers accepts membership from every country in the world, except countries listed by the OECD. Moneybookers accept every major currency, and most other common currencies.

• Neteller (www.neteller.com) - Neteller is the close second contender for the best E-wallet for sports betting arbitrage. Neteller is accepted in approximately as many places as Moneybookers, perhaps even more, they accept 18 currencies but they have larger fees, and more limitations.

  The currencies offered by Neteller at this time are:
  AUD/BGN/CAD/DKK/EEK/EUR/GBP/HUF/INR
  JPY/LTL/LVL/MXN/NOK/PLN/RON/SEK/USD

It’s advisable to have accounts with both of these simply for the sake of flexibility.

There are other e-wallets, but only Moneybookers & Neteller are accepted by almost all bookmakers. You will have to open an account with any of these e-wallets and transfer your capital to the e-wallet account. Most of your trading capital will be managed in the e-wallet account.

After the capital is transferred to your e-wallet account, you’ll need to register at some bookmakers.

Bookmaker Accounts

An excellent site for choosing and researching your bookmakers is Bookmaker Reviews (www.bookmakerreviews.com)

Whilst the TraderZone is capable of scanning them all, you certainly don’t have to register with every bookmaker available to be successful with your sports arbitrage trading. In fact, early on in your career you will be better off limiting yourself to 30-40 accounts and adding to them gradually over time. Choose your initial account based on a combination of factors which include the bookmaker bonuses you are offered and the frequency with which they appear in arb trades

Paper Trading

The paper trading phase of your project should be brief. It’s an important but limited element of the learning curve. You don’t have to deposit any funds with the bookmakers to paper trade. The main purpose here is simply to get used to the layouts of the bookmaker sites and to practice finding the bets when they appear in an arb an the sports. The process is simple:

• Whenever you choose an arb in the TraderZone, you’ll have time to study the arb completely, and understand how the calculator has allocated the stakes to each bet.
• When you’re ready, press the button ‘Open Bookmakers’ and the sites involved in that trade will open in your browser. On each site, navigate to the correct page to access the relevant bet.
• Once you’ve found the bets, confirm the odds are correct and that the arb does indeed exist.
• If the trade is good, practice going as far as you can in the betting process with each site. Each bookmaker has a different method by which bets are placed, so it’s important to learn small details like which button to click and what to select to finalize a bet, especially if you have never used such sites before.

It is worth paper-trading at least 40-50 arbs before ending this phase of your training. Remember, a lesson learned at this stage may save you hundreds of pounds later on when you are trading for real.

Free Bets and Bonus Hunting

This is the first stage in which you will start using and making real money. Quite a lot of it.

Start making deposits at all of the bookmakers which offer you deposit bonuses. If your funds allow, deposit what you need to in order to gain the full bonus amounts. These will typically be in the range £20 - £200

In exchange for giving you a bonus, the bookmakers require that you bet with it and your initial deposit a number of times before you can withdraw any of it. Of course, most gamblers lose it all so the bookmaker ends up giving away nothing and keeping the initial deposit. However, traditional bonus sport arbitraging is a form of sports arbitrage trading where you hedge or back your bets as usual, but since you received the bonus, a small loss can be allowed on each wager (2-5 %), in order to facilitate the trade. This way the bookmaker’s wager requirements are met and you can withdraw the entire initial deposit and most of (90%) the sign up bonus.

The TraderZone offers an improvement over the traditional method of bonus scalping or trading. When you set up your accounts in its bonus-trading module, it will find for you all arbitrage and break-even trades that use those bookmakers, in any combination. This means that instead of incurring small, and up to now, acceptable losses, each of your trades will now capture at least 100% of the bonus, with a chance for a greater profit if the trade happens to be an arb. It also means that you can turn bonus-trading into a regular and systematic element of your portfolio, since bookmakers offer other bonuses throughout the year.

Trading With Small Stakes

Having made some significant profits with your bonus-trading, your next challenge is to go back into training-mode. This may prove psychologically difficult after enjoying the rush of making risk free profits from the bookmakers but it’s extremely important.

During this phase, you’ll actually be executing full arbitrage trades but you’ll be doing so with very small stakes. The point of this exercise is to get you accustomed to trading under pressure without exposing you to the financial and emotional damage that a large loss might wreak in the event that you make a trading error.

After executing 100 of these trades, you will be an experienced trader. FACT.

Impatient novice traders who skip this step often sustain losses which prevent them from becoming successful - don’t make this mistake yourself.

Managing Your Bankroll

Successful sports arbitrage traders accumulate profits by rapidly turning over their trading funds. The more frequent the turnover, the higher the overall profits. This is why efficient bankroll management is important.

You should aim for your bankroll to provide you with maximum liquidity. In practical terms, this means that the amount of funds on hold (i.e in no-man’s-land between your bookmaker and credit crd/bank account) should be kept as low as possible, ensuring funds are always available at the right bookmaker at the right time to place all of the good arbs.

A common mistake made by novice arb traders is to distribute all of their funds into their bookmaker accounts. This effectively locks up those funds and reduces the trader’s ability to add more funds to a bookmaker account that has been emptied as a result of trading.

The most effective way to manage the bankroll is to keep about 50% of your capital in your e-wallet account whilst depositing the balance among the bookmakers you wish to use. However, not all of your bookmakers should receive advanced funding as some of them will offer ‘Instant bet’ accounts which will debit your credit card at the instant that funds are required for a bet.

The ratio in which you distribute the rest of the funds
amongst your bookmakers may be influenced by
how often they have recently been appearing in arbs.

If you manage your bankroll as suggested, whenever you run out of funds in a particular bookmaker account, you can transfer funds from the e-wallet account. Depositing funds from an e-wallet account is free and instant with most bookmakers.

Using a Betting Exchange

Using a betting exchange is an integral part of any sports arbitrage betting strategy. The most popular and, therefore, most liquid betting exchanges are Betfair and BetDaq.

Traditionally sports arbitrage betting involves placing bets with different bookmakers to exploit the difference in odds to return a guaranteed profit. Exchanges allow the same thing but provide and should form part of every sports arbitrage trader’s arsenal. They can also be useful for damage limitation in cases where you need to hedge an exposure after missing a price with a bookmaker.

Conclusion

As a novice Sports Arbitrage Trader you face a steep learning-curve. However, the benefits are clear - as a legitimate opportunity to work at home independently and make significant and consistent profits, it is hard to beat.  As long as you invest time in your training at the early stages, you will find that the processes become second-nature to you within a couple of months. During those two months, you’ll have the ability to extract several thousand pounds of bonuses from the bookmakers so you will, effectively, be getting paid to train!

Tags: bonuses, learning to trade, Sports Arbitrage

This entry was posted on Thursday, June 25th, 2009 at 8:38 am and is filed under Bookmakers, Sports Arbitrage. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.