The Science of Betfair Graphs2017-09-22
Betfair graphs are one of the most important tools, to make a profitable trading investment. By using graphs, you have a strong indicator of where things are going and by studying Betfair graphs, we can find the most appropriate time period, to make our short time trading, during a football match, . In this article, we will define some main principles of Betfair’s graphs behaviour in Over / Under markets. What's more, we should work on real graphs, in ordrr to understand some specialized trading techniques and strategies. The reader has to be familiar of how to use Betfair exchange market and of course with the basic definitions of trading.
2. The idealized Behaviour of Betfair Graphs for Under Markets when there is no Goals
An Under goal market is a very strong and famous market for traders. The graphs of Under goals markets (Under 2.5 etc.) are usually very predictable in price movement during a football match. The fundamental law of an Under goal graph during a match with no goals scored is reduction of prices (odds), as the possibility of the event to happened increase. Figure 4.1 shows the above behaviour. When there is no scoring in the match the possibility of Under 2.5 market increase as it shown in Figure 4.1a. At the same time there is a reduction of the odds as it shown in Figure 4.1b.
Figure 1: Idealized behaviour of possibility & price movement during a live Football match
The idealized behaviour of odds movement as it shown in figure 4.1b starts from a value n0 when the football match begin and follow a smooth curve 1 until t1 time. Between t0 & tE time the inclination of the curve 2 are steeper than curve 1 and after tE close to the end of the game the curve is getting smoother (curve 3). The explanation of this behaviour is:
Curve 1 : From the beginning of the match until t1 time, which is usually t0=10-12min, the possibility of the event to occur does not change dramatically, because it is a very short time of the game and the two teams usually do not attack enough. Nevertheless, it is very interesting to learn that at the first 10min of a football match, there is a big possibility of scoring (www.betpractice.com, Trading Statistics & Research).
Curve 2 : The inclination of this curve is definitely steeper than the inclination of curve 1. This curve represents the main part of the match, from time t0=10-12min until tE=70-85min. As there is no goal during the match the possibility of the event (Under 2.5 or 1.5 etc) to occur increases (figure 4.1a) and because of that the odd prices reduce, as it shown in figure 4.1b.
Having in mind that curve 2 represented the idealized behaviour of average price movements. In real Betfair graphs (see paragraph………) curve 2 include many fluctuations or parts with different inclinations. About turning points the exact values of time t0 and tE are different among markets Under 1.5, Under 2.5, Under 3.5 and Under 4.5 and of course it depends of the type of the match. A generalized rule is that value of t0 is close to 10min and tE ranges between 70 to 85min.
Curve 3 : Represents the price movements for the last minutes of the match. At that time and because no goal were scored, the possibility of the event to occur (Under 2.5 etc) is already high. The odds price is already small (value ntE, figure 4.1b) and because of that the inclination of specific curve is smooth and until the end of the game.
2.1 Definition of Rating in Betfair Graphs
Trying to understand Betfair graphs is very useful to define the Rate of price movements. In figure 4.2 there is a typical section of a Betfair odds graph showing the inclination of the curve. To define the inclination of the curve we have to measure the number of ticks the price reduced in one minute. So the definition of the Rate is:
r= (tick reduction) / minute
Figure 4.2: Typical inclination of a Betfair Graph
At time t=10min the odd for Under 2.5 is n=1.80
At time t=11min the odd for Under 2.5 is n=1.78
The rate r of the curve is:
Price reduction (1.80-1.78)=0.02 that means 2 ticks (because between odds 1.01-2.00, one tick=0.01)
Time difference is 11-10=1min.
So r=2/1 that means r=2 tick/min
At time t=22min the odd for Under 2.5 is n=1.65
At time t=30min the odd for Under 2.5 is n=1.57
The rate r of the curve is:
Price reduction (1.65-1.57)=0.08 that means 8 ticks
Time difference is 30-22=8min.
So r=8/8 that means r=1 tick/min
Rate r is a very useful index because it shows the reduction of price movements. When r has a high value that means there is a good opportunity for trading. When r has a small value that means there is a small reduction of prices, so trading is not so profitable.
Table 4.1: Methodology of Rate measuring
In table 4.1 there is a framework of measuring rates in a football match. At the first 15min of the game, we record the back values every minute. In column (3) there is a calculation of price difference between minutes (etc. between 6 to 7min price difference is 1.76-1.75=0.01) and in column (4) there is a record of rates r. For example from 6 to 7 minutes of the game the rate is 1tick/min.
Looking the values of table 4.1 we can assume that until 10min of the game the rates are steady and small, but from 10 to 15min rates increased. Trying to estimate the average values there is:
Time Period 0 to 10min :
r=(0+1+1+0+2+0+1+1+1+1) / 10=8/10=0.8 tick/min
Time Period 10 to 15min :
r=(2+1+3+3+3) / (15-10)=12/5=2.4 tick/min
It is obvious that after 10min of the game the rate r increase and if you make trading at this period you will take more tick in one or two minutes. Of course, tick has no decimal value but an integer value. We cannot say 0.8 or 2.4 ticks. However, estimation of average value in column (5) has a theoretical meaning of tick reduction. Values of 0.8 ticks/min means, 0 or 1 tick movement and 2.4 ticks/min means, about 2 or 3 ticks in a minute.
Classification Chart of Rate
Steady 0 ticks
Smooth 0-1 ticks
Quick 1-2 ticks
Sharp >2 ticks
3. The idealized Behaviour of Betfair Graphs for Under Markets when there is Goal scoring
Figure 4.3 shown a typical idealized graph of a football match with two goals scored. Let’s have a look at the graph:
• Time t0
Until time t0 the curve has an average rate r0, which is usually a small rate due to the start of the game.
• Time t0 to tG1
After t0 curve is being steeper with rate r1 as it has been explained in previous paragraphs. At time tG1 a goal is scored and because the possibility of the event for etc Under 2.5 reduced, there is a sharp and perpendicular increase of the odd price. From now on we call this price movement as peak.
• Time tG1 to tG2
After the goal there is a period of time that the rate rG1 of the curve is steady to smooth, because many people sell and buy bets. After that period curve with rate rG1a is becoming quick and usually steeper than curve with rate r1. When the second goal comes at time tG2 another peak moves the price at high values.
• Time tG2 to End of the Game
After the second goal there is a period of time that the rate rG2 of the curve is steady to smooth. If, for example, you are in Under 2.5 market this period will be stayed a lot of minutes, more than the correspondence period of the first goal, because with an another third goal market is closed.
After that period curve with rate rG2a is becoming quick and sometimes sharp, usually steeper than curve with rate rG1a.
Figure 3: Idealized behaviour during a live Football match with two goals scored
4. Handle the Graphs (Scalping Windows)
The main reason to understand and exp