We are continually being asked for advice on the best indicators to use and what they tell us. In-fact, the reason that the software became free in mid-2010 was because we weren't able to keep on top of the demand for information relating to successful trading using QuantSports. As a result, we feel obliged to make you aware of a new group called Interactive Sports Investor. This is a business run by experienced traders whose mission is to make their members successful traders.

Unlike other services they are both very affordable and very transparent. The basic membership is free and for only £15 you can subscribe to a premium membership that will help you profit from using QuantSports. This includes weekly live trading sessions, Trader Q&A, 7 days a week support, video demonstrations and full access to all of their recorded live sessions. They really are a breath of fresh air in a market place that is saturated with over priced courses and poor support.

They trade, and teach people how to trade, on the Betfair markets in a number of sports including Horse Racing, Tennis and Football and the service is as the name suggests, interactive; so if you want to be a successful trader and learn how to use the power of QuantSports to your advantage, why not check them out:

http://www.interactivesportsinvestor.com

To start, simply open up a chart as below (You can see I was trading Imperial Breeze in the 14:20 at Carlisle): 

Right-click on the chart and select "Properties" or alternatively hold CTRL+T:

A box will appear with a whole host of different settings including the colours of the bars, signals, outlines, markers, grid and many more. Scroll down to the bottom of the properties section and select the drop down menu from the "Colour for background" setting in the "Window" section. If you choose a darker background you may also have to adjust the outlines of the bars, price marker and cross-hair accordingly so that they are still visible:

Click "Apply" and you will have a chart something like that below (although it will be to your own personal taste). If you want to save this as your default layout you will have to then right-click and select "Templates" > "Save As". I called mine "Whizzy Template". Then when opening the chart set the new "Whizzy Template" as your default:

Add your indicators and bingo, you have your new more aesthetically pleasing chart (reminiscent of the Bloomberg platform anyone?):

If you really wanted to spice up your chart, you could set everything to transparent! However in the concerns of financial safety this isn't recommended.

There's also a volume histogram included that has a VOLMA included. If you are trading big swings then this come in very handy!

Below is an example screenshot of a trend that picked up in the 16:40 @ Nottingham:

You can download the indicator directly from:

http://www.ninjatrader.com/support/forum/showthread.php?t=12908

If you are interested in this form of trading and I know many are, in particular Betfair traders most of which do trade 'naked', then there are some very impressive indicators available here:

http://fin-alg.com/marketbalance.html

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).

What on earth could that number represent? ……

My profit from Betfair this year? I wish!

No, it is in fact an answer to a question that I get asked quite a lot in response to justifying technical analysis (although I'm not often that specific). The most common reason traders are put off Technical Analysis is because they fear that they will be following the same trades as all other traders. I can understand that for someone who is unfamiliar with Technical Indicators it would be easy to be sceptical of using the same analysis that is used by other traders as well. This is the point where technical analysis is massively misjudged. The number above is actually the different about of indicator set-ups that a trader could have using only the default indicators included in the Ninjatrader package (I've assume 80, but there are actually a few more). This is of-course ignoring the use of the additional ones available freely through the file-sharing forums or elsewhere online.

Now I accept that it isn't an entirely accurate representation because it assumes that one might have a chart with 80 indicators, something that would be impossible (that is unless you are reading this post on a 1km² screen). So let's make the more realistic assumption that you are trading with 4 indicators on a chart. That still leaves us with 1,581,580 set-up variations. What's more, for every additional indicator you download that figure increases by about 100,000.

My point in all of this is that there is an almost impossible chance that you will have the same chart set-up as someone else. If you consider as well that each indicator can have 100s of different individual settings and the fact that there are different time-frames and chart settings, this number spirals into something uncomprehendable. What this also means is that you've never tried them all! So, considering there are 30 races a day, and that you trade every single one with a different chart set-up using 4 indicators, you'll finish reviewing the various chart set-ups, ooh, sometime after the year 2150.

Every market behaves differently, so you will never see two markets the same. However, in the words of Mark Twain, whilst "History doesn't repeat itself, it does like to rhyme". So today I set about trying to identify which race I was happy to trade.  At around 10am I started plotting the data for that race.

I chose the 17:05 at Haydock because there were 3 horses all vying for favouritism. It's very infrequent that a market will not favour at least one of these horses because with the nature of the Betfair markets everyone trades every race and therefore the price needs to fluctuate. There are two ways to trade a race like this, you can either trade all day (I use a 3min chart) with an indicator like ParabolicSAR (creating a parabolic curve around the price with a trailing stop as the dot). You can also, like in the screenshots below, create a set-up for when trading starts about a half an hour prior to the race.

Below I will try and take you through the race from a very long swing trading perspective. The reason I've been able to do this is because it is trading over 3 minute intervals. The first screen I took was half an hour before the race:

1) All horses have moved in price quite significantly. King Zeal & Strategic Moon both have shortened and Dream Of Olwyn has drifted. King Zeal is slowing in it's shorten so I have used a fibonacci retracement drawing (I will explain how these are used for scalping in another post). This basically means that I am not looking for a swing trade on King Zeal. Strategic Moon is trending and Dream Of Olwyn has broken the support line and is ranging, although the ParabolicSAR is signalling a back. You will notice that I have not used Andrew's pitchfork on Dream Of Olwyn as is done in general practive, but it helps to show where the price has broken a support level:

2) I've drawn a resistance line under the price of Dream Of Owyne. This is simply the bottom of the bar that it broke the support. Also the ParabolicSAR has swapped to a sell signal in this instance. Now the MACD is signalling a sell in all cases, however DOO has met resistance and KZ is retracing. You're probably wondering why I knew KZ was retracing; it's all to do with the ratios in fibonacci.

.

3) DOO has begun to break the resistance line and SM it pushing the support level. What I am looking for here is a reversal for SM and a breakout from DOO.

4.) The Relative Strength Indicator on SM is verging on a retracement over the resistance level. If the bar breaks the support level cleanly then it will be a signal to lay SM and back DOO.

5.) As it happens the price doesn't break the support line on SM, so no trade is triggered. The trend on SM continues and DOO continues to fluctuate closely around the resistance line. My attention now turns to the MACD indicator on the favourite KZ. It begins to appear as if it might signal a buy (lay). Because the price has been fluctuating between the fib ratio levels I take the opinion that it has finished shortening and now begin to look for a reversal. You'll also see the price getting beginning to meet the ParabolicSAR (the yellow dots) signalling that the indicator is likely to switch to a lay signal.

6.) The price on KZ does reverse, but we are still keeping in mind that the retracement drawing predicts that the price will range between the fib levels. You'll also begin to see (as we enter the last 10 minutes) that the volumes increase dramatically.

7.) KZ begins to fluctuate between the fib levels again, even breaking the 0% support level. However it is clear that SM is still shortening in the channel and that DOO has broken the resistance line. You'll notice a delay between screenshots 6 & 7 and this is because I took a back position on DOO.

8.) The trend on SM continues. DOO continues to break and KZ continues to range.

9.) The race comes close to it's start and as DOO begins to level I exit the position. You can see that KZ retraces after what is clearly frantic trading in the last minute. It hits the 100% fib level which signals that, assuming it stays within the levels it should retrace, though it's too late to take a position.

10.) KZ finally retraces slightly prior to the race start after hitting resistance at the 100% level. I've also drawn on (rather belatedly) where I would draw the next pitchfork.

In case you are wondering why charting two or more outcomes in an event is important, it is all to do with the fact that the markets are tied by the book price. So whilst there are many different outcomes making up a book price, somewhere in the region of 100%, they are all instrinsically linked. So, everytime prior to entering a swing trade I might consider the following:

• If the favourite is drifting, is the second favourite steaming (and vs)?
• If the favourite and second favourite are steaming, what effect is this having on the 3rd favourite?

This can all help to strengthen any indications that the charts are giving. For example, in the screenshot below you will see a perfect opportunity to hop on a trend. At around 16:05, both the favourite and second favourite strongly pivoted. If you look at the BuySell histogram, you will notice that at the points of reversal the supply:demand volume bars are almost direct opposites.

In my usual set-up I would have resistance indicators running on this sort of chart, although in this case I was actually trying to get some information on the WOM style indicators and in the process found a slightly different opportunity.

In financials the idea is that the bluff will try to mimick a large fund trying to enter or exit a position, let's say in a particular equity, and as a result the market will try and manipulate the available price. This is because funds won't be as sensitive to the spread as a day trader and so the scalpers in the market will try and squeeze them from a few more pips. However all that in fact happens, in the case of a bluff, is that traders get caught in their own trap. It's exactly the same on the betting exchanges, here the bluff is over a gambler (or bookmaker) who, much like a fund, is believed to not be as concerned about a few ticks. So the idea behind this blog post is to shed some light on indicators which help visualize weight of money.

There are two indicators that I was using today that help to measure the pressure in unmatched volumes. They are "BuySellPressure" and "BuySellVolumes". I'm pretty sure these are available in the default Ninjatrader 6.5 download. You do need sufficient data for them to work off (I recommend a 10 second+ chart), but it will pay off towards the start of a race (i,e 1-2 minutes prior). The pressure indicator measures the % unmatched volumes that are on either side of the book. So the sum of the green and red (bid and ask) points will be 100(%). The volumes indicator is based around the same unmatched volumes, except this time it is displayed in a volumes histogram where the bid and ask are weighted.

This is can be useful in a) tracking the market weighting if you are a scalper and b) finding an entry and exit point if you prefer swing trading.

I accidently left one of my trades in-play and was stunned at how accurately these pressure signals predicted the price, unfortunately it's too blisteringly quick to capitalize. This is also why towards the end of the screenshot below the BuySell indicators go in-play.the market went in-play (which is why it goes all red)

The software has been made free because I am convinced there is a large lack of guidance in trading sports markets; just over priced courses that don't deliver. So, here's a free alternative that provides you with the same analysis that billions are traded as a result of each day. I am sure the success that I and tens of thousands of others have had using it can be replicated across all betting exchange markets. I also hope to update the blog and forum with a few more resources as well as any user posts.

Here’ a direct link to the channel:
http://www.youtube.com/quantsportscouk

One of the videos uploaded recently:

I’ll be looking to test as many systems as possible over the next couple of months.

On an additional note, I will be away for the next fortnight with minimal internet access and so it is likely that new membership will be suspended briefly.