Before one can implement their own trading style on a market, it's very important to identify what type of trading suits that particular type of market. In the least granulated format there are really two styles of trading Betfair; to swing & to scalp. To start, the type of market that is being traded should be the big give away. For example, the pre-match 'Match Odds' market in the premier league is likely to be a place to scalp and the direction of the market is unlikely to be that predominant. In Horse Racing, whilst it should be visible from looking at the charts whether the horse is trending or ranging, sometimes it's a bit more ambiguous than not.
Thankfully, there is a solution that can help (when used correctly). The 'Woodies CCI' indicator can be of great assistance when trying to identify whether a market is trending (for swing trading) or ranging (for scalping). Actually, the Woodies CCI indicator has three signals; Trending (Buy & Sell), Flat & Normal. As a swing trader, you would look to trade when the CCI indicator gave a 'Trending' indication. If however you prefer scalping (primarily on a favourite), you would instead try and take advantage of the 'Flat' period. The CCI indicator makes these predictions by measuring the speed of the price (fast) against the speed of the moving average (slow) and hence finds the divergence of the two.
So, except following the 'Trending', 'Normal' & 'Flat' signals, how does one trade the Woodies CCI indicator?
As with any indicator, there are numerous ways to interpret the signals. There are 5 Levels in the CCI indicator, -200<-100<0<100<200. Simply speaking, these levels represent how far the price is from the moving average. I was looking for a system of trading WoodiesCCI a while back and found a lot of solid resources on his website. A great example of a trade is looking for where the CCI has been bouncing from it's -100<0<100 level for about a minute (6 bars on a 10 second chart). What we then wait for is a time when the price breaks out of either the 100 or -100. I've attached a screen shot below from a horse in the 14:30 @ Pontefract.
As you can see in the screenshot below, in both the trades signalled here the CCI has been bouncing under the 100 channel for at least a minute (indicated by the red box). When it breaks out of the 100 channel, signalling a Buy (the green dotted line) we would place a Lay Bet. When the CCI then changes to a Sell (red) signal we then hedge out our position with a back bet (the red dotted line).
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