You've all seen them. Take any third party sports trading software and you will find a myriad of indicators. From candelsticks to moving averages, to the odd sounding Bollinger Bands and stochastic oscillator. The novice with no idea of how to trade sports markets will open up a trading ladder and see the prices jump from one place to another and wonder what to do next. They will then open up a chart and see the time series snaking up and down. Again, they will wonder what it has to do with profiting from sports trading.
Finally, the novice will open up the indicators list on the chart and wonder which of the many indicators will divine untold riches. Everyday, I see these novices in the online forums. They have heard that some people get rich from sports trading and they want the short-cut route to joining them.
Sports betting is usually done on the day of the event. In that respect it is like financial day trading. Yes, there are sports markets that open before the start date. For example, horse racing markets usually open the night before but volume is thin and volatile. The classic flat races, The Grand National or The Gold Cup markets will open far in advance. However, in the main, the window for trading a sports market is pretty small. Sports trading in the temporal aspect is very different to financial trading. In financial day trading there is always tomorrow. A stock, a currency pair, option or futures contract will still be around tomorrow even when you stop trading today. In sports trading you get one day in which to profit from the event.
When trading sports markets things happen that much more quickly. Financial indicators are usually used on a day by day basis rather than second by second. Also, financial assets are priced to the penny. Sports betting markets are priced by odds and the jumps between the odds are not continuous. An indicator such as a moving average is just that, an average, used to smooth out a time series. Such indicators don't work so well when they are working with discrete prices such as the range 2.98, 3.0, 3.05 and 3.10. Range indicators such as Bollinger bands are easily broken through and may offer a false signal.
Sports trading is as different to financial trading as it is the same. The buying and selling, supply and demand is the same in any market. However, the underlying structure of the markets is very different. The similarities between sports and financial markets are only superficial and because of that I have thrown out all financial indicators and developed my own sports trading indicators. As I have said before, third party trading software can force the unwary to be trapped into a trading regime dictated by the software they use. I started trading using 3rd-party software but now I code my own trading software. Doing that has freed my mind to appreciate the differences between sports and financial trading markets.
