I write my own trading software for a variety of reasons. The most important reason being that I create my own trading rules and use metrics that third party vendors don't utilise. For me to ask a third party vendor to code this into their software would mean losing my edge.
Another reason for not using third party vendors is trust. Can we really trust the software that we are using? The trading software acts as an intermediary between you and the betting exchange. Whenever you enter your username and password you open up a route for a hacker or malicious vendor to access your account.
There have been many cases of security breeches on Betfair. There is not a lot you can do if someone hacks into Betfair though two factor authentication can help. Attacks through third party software are probably easier because you are sharing your password with someone other than Betfair. And Betfair aren't going to refund you a penny if you lose your money through a third party application. Not that Betfair is keen on giving you your money back any way, no matter what the circumstances of your loss.
Another way third party software may take advantage of you is through monitoring your actions as you trade. What better way is there to build the perfect trading system than by monitoring successful traders. Can you be sure that your trading is not being data mined by the software provider? This has happened in the financial markets where brokerages provide software to clients and then front run the clients through high-frequency trading techniques. You can read about these activities in books such as Flash Boys and Dark Pools.
If you can write your own software or design and get someone else to program your software then I encourage you to do so. No third party will get to see your password. Security is very important when your money is involved.
